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EXHIBIT 10.9
THIRD AMENDED INVESTORS' RIGHTS AGREEMENT
This Third Amended Investors' Rights Agreement (this "AGREEMENT") is made
and entered into as of October 16, 1999 by and among Chaparral Network Storage,
Inc., a Delaware corporation (the "COMPANY"), and the individuals and entities
listed on Exhibit A attached hereto (the "INVESTORS").
A. Certain of the Investors are party to that certain First Amended
Investors' Rights Agreement dated as of March 31, 1999 (the "FIRST AMENDED
AGREEMENT") and that certain Second Amended Investors' Rights Agreement dated as
of August 13, 1999 (the "SECOND AMENDED AGREEMENT").
B. The Company has sold to certain other of the Investors (the "NEW
INVESTORS") shares of the Company's Series A Preferred Stock and/or Series C
Preferred Stock on the terms and conditions set forth in purchase agreements
between the Company and each New Investor (the "PURCHASE AGREEMENTS").
C. It is a condition to the New Investors' obligations to enter into the
Purchase Agreements that this Agreement be executed by the parties hereto.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
1. INFORMATION RIGHTS.
1.1 Financial Information. The Company covenants and agrees that,
commencing on the date of this Agreement, for so long as any Investor holds
shares of Series A Preferred Stock, Series B Preferred Stock or Series C
Preferred Stock and/or shares of Common Stock of the Company ("COMMON
STOCK") issued upon the conversion of such shares of Series A Preferred
Stock or Series B Preferred Stock or Series C Preferred Stock ("CONVERSION
STOCK") the Company will:
(a) Annual Reports. Furnish to such Investor, as soon as practicable
and in any event within 120 days after the end of each fiscal year of
the Company, a consolidated Balance Sheet as of the end of such fiscal
year, a consolidated Statement of Income and a consolidated Statement of
Cash Flows of the Company and its subsidiaries for such year, setting
forth in each case in comparative form the figures from the Company's
previous fiscal year (if any), all prepared in accordance with generally
accepted accounting principles and practices and audited by an
independent certified public accounting firm; and
(b) Quarterly Reports. Furnish to such Investor as soon as
practicable, and in any case within forty-five (45) days after the end
of each fiscal quarter of the Company (except the last quarter of the
Company's fiscal year), quarterly unaudited financial statements,
including an unaudited Balance Sheet, an unaudited Statement of Income
and an unaudited Statement of Cash Flows, together with a comparison to
the Company's operating plan and budget and statements of the Chief
Financial Officer of the Company explaining any significant differences
in the statements from the Company's operating plan and budget for the
period and stating that such statements fairly present the consolidated
financial position and consolidated financial results of the Company for
the fiscal quarter covered.
Each Investor agrees to hold all information received pursuant to
this Section in confidence, and not to use or disclose any of such
information to any third party, except to the extent such information may
be made publicly available by the Company.
1.2 Inspection Rights. The Company shall permit each Investor holding
shares of Series A Preferred Stock, Series B Preferred Stock or Series C
Preferred Stock and/or shares of Conversion Stock, or any combination
thereof, at such Investor's expense, to visit and inspect the Company's
properties, to examine its books of account and records and to discuss the
Company's affairs, finances and accounts with its officers, all at such
reasonable times as may be requested by such Investor. Each Investor agrees
to hold all information received from such inspections in confidence, and
not to use or disclose any of such information to any third party, except
to the extent such information may be made publicly available by the
Company.
1.3 Board Rights. The Company shall permit Adaptec to have one (1)
representative attend all meetings of the Company's Board of Directors in a
non-voting observer capacity and to receive any communications directed to
members of the Board of Directors in their capacity as such. The Investors
agree to hold all information received from such meetings in confidence,
and not to use or disclose any of such information to any third party,
except to the extent such information may be made publicly available by the
Company.
1.4 Termination of Certain Rights. The Company's obligations under
Sections 1.1, 1.2 and 1.3 above will terminate upon the closing of the
Company's initial public offering of Common Stock pursuant to an
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effective registration statement filed under the U.S. Securities Act of
1933, as amended (the "SECURITIES ACT"), in which the gross proceeds raised
for the Company's account (calculated before deduction of underwriters'
discounts and omissions) exceeds $15,000,000 at a price greater than $2.20
per share of Common Stock (such price to be proportionally adjusted to
reflect stock splits, stock dividends and the like).
2. REGISTRATION RIGHTS.
2.1 Definitions. For purposes of this Section 2:
(a) Registration. The terms "REGISTER," "REGISTRATION" and
"REGISTERED" and refer to a registration effected by preparing and
filing a registration statement in compliance with the Securities Act,
and the declaration or ordering of effectiveness of such registration
statement.
(b) Registrable Securities. The term "REGISTRABLE SECURITIES" means:
(i) all the shares of Common Stock of the Company issued or issuable
upon the conversion of any shares of Series A Preferred Stock, Series B
Preferred Stock or Series C Preferred Stock that are now owned or may
hereafter be acquired by the Investors or the Investors' permitted
successors and assigns and (ii) any shares of Common Stock of the
Company issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of,
all such shares of Common Stock described in clause (i) of this
subsection (b); excluding in all cases, however, any Registrable
Securities sold by a person in a transaction in which rights under this
Section 2 are not assigned in accordance with this Agreement or any
Registrable Securities sold to the public or sold pursuant to Rule 144
promulgated under the Securities Act.
(c) Registrable Securities Then Outstanding. The number of shares of
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall mean the number of
shares of Common Stock which are Registrable Securities and (i) are then
issued and outstanding or (ii) are then issuable pursuant to the
exercise or conversion of then outstanding and then exercisable options,
warrants or convertible securities.
(d) Holder. For purposes of this Section 2 and Sections 3 and 4
hereof, the term "HOLDER" means any person owning of record Registrable
Securities that have not been sold to the public or pursuant to Rule 144
promulgated under the Securities Act or any assignee of record of such
Registrable Securities to whom rights under such Sections have been duly
assigned in accordance with this Agreement; provided, however, that for
purposes of this Agreement, a record holder of the Warrant or shares of
Series A Stock, Series B Stock or Series C Stock convertible into such
Registrable Securities shall be deemed to be the Holder of such
Registrable Securities; and provided, further, that the Company shall in
no event be obligated to register the Warrant or shares of Series A
Stock, Series B Stock, or Series C Stock and that Holders of Registrable
Securities will not be required to convert the Warrant or their shares
of Series A Stock, Series B Stock or Series C Stock into Common Stock in
order to exercise the registration rights granted hereunder, until
immediately before the closing of the offering to which the registration
relates.
(e) Form S-3. The term "FORM S-3" means such form under the
Securities Act as is in effect on the date hereof or any successor
registration form under the Securities Act subsequently adopted by the
SEC which permits inclusion or incorporation of substantial information
by reference to other documents filed by the Company with the SEC.
(f) SEC. The term "SEC" or "COMMISSION" means the U.S. Securities
and Exchange Commission.
(g) Series A Stock. The term "SERIES A STOCK" shall mean the
Company's Series A Preferred Stock, par value $0.001 per share.
(h) Series B Stock. The term "SERIES B STOCK" shall mean the
Company's Series B Preferred Stock, par value $0.001 per share.
(i) Series C Stock. The term "SERIES C STOCK" shall mean the
Company's Series C Preferred Stock, par value $0.001 per share.
2.2 Demand Registration.
(a) Request by Holders. If the Company shall receive at any time
after six (6) months after the effective date of the Company's initial
public offering of its securities pursuant to a registration filed under
the Securities Act, a written request from the Holders of at least
two-thirds of the Registrable Securities then outstanding that the
Company file a registration statement under the Securities Act covering
the registration of Registrable Securities pursuant to this Section 2.2,
then the
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Company shall, within twenty (20) days after the receipt of such written
request, give written notice of such request ("REQUEST NOTICE") to all
Holders, and effect, as soon as practicable, the registration under the
Securities Act of all Registrable Securities which Holders request to be
registered and included in such registration by written notice given by
such Holders to the Company within twenty (20) days after receipt of the
Request Notice, subject only to the limitations of this Section 2;
provided that the Registrable Securities requested by all Holders to be
registered pursuant to such request must be at least twenty-five percent
(25%) of all Registrable Securities then outstanding.
(b) Underwriting. If the Holders initiating the registration request
under this Section 2.2 ("INITIATING HOLDERS") intend to distribute the
Registrable Securities covered by their request by means of an
underwriting, then they shall so advise the Company as a part of their
request made pursuant to this Section 2.2 and the Company shall include
such information in the written notice referred to in subsection 2.2(a).
In such event, the right of any Holder to include his Registrable
Securities in such registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such
Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall enter into
an underwriting agreement in customary form with the managing
underwriter or underwriters selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 2.2, if the
underwriter(s) advise(s) the Company in writing that marketing factors
require a limitation of the number of securities to be underwritten then
the Company shall so advise all Holders of Registrable Securities that
would otherwise be registered and underwritten pursuant hereto, and the
number of Registrable Securities that may be included in the
underwriting shall be reduced as required by the underwriter(s) and
allocated among the Holders of Registrable Securities on a pro rata
basis according to the number of Registrable Securities then outstanding
held by each Holder requesting registration (including the Initiating
Holders); provided, however, that the number of shares of Registrable
Securities to be included in such underwriting and registration shall
not be reduced unless all other securities of the Company are first
entirely excluded from the underwriting and registration. Any
Registrable Securities excluded and withdrawn from such underwriting
shall be withdrawn from the registration.
(c) Maximum Number of Demand Registrations. The Company is obligated
to effect only two (2) such registrations pursuant to this Section 2.2.
(d) Deferral. Notwithstanding the foregoing, if the Company shall
furnish to Holders requesting the filing of a registration statement
pursuant to this Section 2.2, a certificate signed by the President or
Chief Executive Officer of the Company stating that in the good faith
judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such registration
statement to be filed and it is therefore essential to defer the filing
of such registration statement, then the Company shall have the right to
defer such filing for a period of not more than one hundred twenty (120)
days after receipt of the request of the Initiating Holders; provided,
however, that the Company may not utilize this right more than once in
any twelve (12) month period.
(e) Expenses. All expenses incurred in connection with a
registration pursuant to this Section 2.2, including without limitation
all registration and qualification fees, printers' and accounting fees,
fees and disbursements of counsel for the Company, and the reasonable
fees and disbursements of one counsel for the selling Holders (but
excluding underwriters' discounts and commissions), shall be borne by
the Company. Each Holder participating in a registration pursuant to
this Section 2.2 shall bear such Holder's proportionate share (based on
the total number of shares sold in such registration other than for the
account of the Company) of all discounts, commissions or other amounts
payable to underwriters or brokers in connection with such offering.
Notwithstanding the foregoing, the Company shall not be required to pay
for any expenses of any registration proceeding
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begun pursuant to this Section 2.2 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of
the Registrable Securities to be registered, unless the Holders of a
majority of the Registrable Securities then outstanding agree to forfeit
their right to one (1) demand registration pursuant to this Section 2.2
(in which case such right shall be forfeited by all Holders of
Registrable Securities); provided, further, however, that if at the time
of such withdrawal, the Holders have learned of a material adverse
change in the condition, business, or prospects of the Company not known
to the Holders at the time of their request for such registration and
have withdrawn their request for registration with reasonable promptness
after learning of such material adverse change, then the Holders shall
not be required to pay any of such expenses and shall retain their
rights pursuant to this Section 2.2.
2.3 Piggyback Registrations. The Company shall notify all Holders of
Registrable Securities in writing at least thirty (30) days prior to filing
any registration statement under the Securities Act for purposes of
effecting a public offering of securities of the Company (including, but
not limited to, registration statements relating to secondary offerings of
securities of the Company, but excluding registration statements relating
to any registration under Section 2.2 or Section 2.4 of this Agreement or
to any employee benefit plan or a corporate reorganization) and will afford
each such Holder an opportunity to include in such registration statement
all or any part of the Registrable Securities then held by such Holder.
Each Holder desiring to include in any such registration statement all or
any part of the Registrable Securities held by such Holder shall, within
twenty (20) days after receipt of the above-described notice from the
Company, so notify the Company in writing, and in such notice shall inform
the Company of the number of Registrable Securities such Holder wishes to
include in such registration statement. If a Holder decides not to include
all of its Registrable Securities in any registration statement thereafter
filed by the Company, such Holder shall nevertheless continue to have the
right to include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the Company with
respect to offerings of its securities, all upon the terms and conditions
set forth herein.
(a) Underwriting. If a registration statement under which the
Company gives notice under this Section 2.3 is for an underwritten
offering, then the Company shall so advise the Holders of Registrable
Securities. In such event, the right of any such Holder's Registrable
Securities to be included in a registration pursuant to this Section 2.3
shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities
in the underwriting to the extent provided herein. All Holders proposing
to distribute their Registrable Securities through such underwriting
shall enter into an underwriting agreement in customary form with the
managing underwriter or underwriter(s) selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the managing
underwriter determine(s) in good faith that marketing factors require a
limitation of the number of shares to be underwritten, then the managing
underwriter(s) may exclude shares (including Registrable Securities)
from the registration and the underwriting, and the number of shares
that may be included in the registration and the underwriting shall be
allocated, first, to stockholders exercising any demand registration
rights, second to the Company, and third, to each of the Holders
requesting inclusion of their Registrable Securities in such
registration statement on a pro rata basis based on the total number of
Registrable Securities then held by each such Holder; provided however,
that the right of the underwriters to exclude shares (including
Registrable Securities) from the registration and underwriting as
described above shall be restricted so that: (i) the number of
Registrable Securities included in any such registration is not reduced
below twenty-five percent (25%) of the shares included in the
registration, except for a registration relating to the Company's
initial public offering or an offering solely by stockholders of the
Company exercising demand registration rights, from which all
Registrable Securities may be excluded, and (ii) all shares that are not
Registrable Securities and are held by persons who are employees or
directors of the Company (or any subsidiary of the Company) shall first
be excluded from such registration and underwriting before any
Registrable Securities are so excluded. If any Holder disapproves of the
terms of any such underwriting, such Holder may elect to withdraw
therefrom by written notice to the Company and the underwriter,
delivered at least twenty (20) days prior to the effective date of the
registration statement. Any Registrable Securities excluded or withdrawn
from such underwriting shall be excluded and withdrawn from the
registration. For any Holder that is a partnership or corporation, the
partners, retired partners and stockholders of such Holder, or the
estates and family members of any such partners and retired partners and
any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single "Holder," and any pro rata reduction with respect
to such "Holder" shall be based upon the aggregate amount of shares
carrying registration rights owned by all entities and individuals
included in such "Holder," as defined in this sentence.
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(b) Expenses. All expenses incurred in connection with a
registration pursuant to this Section 2.3 (excluding underwriters' and
brokers' discounts and commissions), including, without limitation all
federal and "blue sky" registration and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company
and reasonable fees and disbursements of one counsel for the selling
Holders shall be borne by the Company.
2.4 Form S-3 Registration. In case the Company shall receive from any
Holder or Holders of at least twenty-five percent (25%) of all Registrable
Securities then outstanding a written request or requests that the Company
effect a registration on Form S-3 and any related qualification or
compliance with respect to all or a part of the Registrable Securities
owned by such Holder or Holders, then the Company will:
(a) Notice. Promptly give written notice of the proposed
registration and the Holder's or Holders' request therefor, and any
related qualification or compliance, to all other Holders of Registrable
Securities; and
(b) Registration. As soon as practicable, effect such registration
and all such qualifications and compliances as may be so requested and
as would permit or facilitate the sale and distribution of all or such
portion of such Holder's or Holders' Registrable Securities as are
specified in such request, together with all or such portion of the
Registrable Securities of any other Holder or Holders joining in such
request as are specified in a written request given within twenty (20)
days after receipt of such written notice from the Company; provided,
however, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 2.4:
(i) if Form S-3 is not available for such offering;
(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
$1,000,000;
(iii) if the Company shall furnish to the Holders a certificate
signed by the President or Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of
the Company, it would be seriously detrimental to the Company and
its stockholders for such Form S-3 Registration to be effected at
such time, in which event the Company shall have the right to defer
the filing of the Form S-3 registration statement no more than once
during any twelve month period for a period of not more than 120
days after receipt of the request of the Holder or Holders under
this Section 2.4;
(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) Expenses. Subject to the foregoing, the Company shall file a
Form S-3 registration statement covering the Registrable Securities and
other securities so requested to be registered pursuant to this Section
2.4 as soon as practicable after receipt of the request or requests of
the Holders for such registration. The Company shall pay all expenses
incurred in connection with each registration requested pursuant to this
Section 2.4, (excluding underwriters' or brokers' discounts and
commissions), including without limitation all filing, registration and
qualification, printers' and accounting fees and the reasonable fees and
disbursements of one counsel for the selling Holder or Holders and
counsel for the Company.
(d) Not Demand Registration. Form S-3 registrations shall not be
deemed to be demand registrations as described in Section 2.2 above.
2.5 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities under this Agreement, the
Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use reasonable, diligent
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.
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(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with
such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements
of the Securities Act, and such other documents as they may reasonably
request in order to facilitate the disposition of the Registrable
Securities owned by them that are included in such registration.
(d) Use reasonable, diligent 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.
(g) Furnish, at the request of any Holder requesting registration of
Registrable Securities, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being
sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with
respect to such securities becomes effective, (i) an opinion, dated as
of such date, of the counsel representing the Company for the purposes
of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably
satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities and (ii) a "comfort"
letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering and reasonably satisfactory to a majority
in interest of the Holders requesting registration, addressed to the
underwriters, if any, and to the Holders requesting registration of
Registrable Securities.
2.6 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 2.2, 2.3
or 2.4 that the selling Holders shall furnish to the Company such
information regarding themselves, the Registrable Securities held by them,
and the intended method of disposition of such securities as shall be
required to timely effect the registration of their Registrable Securities.
2.7 Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration
as the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 2.
2.8 Indemnification. In the event any Registrable Securities are
included in a registration statement under Sections 2.2, 2.3 or 2.4:
(a) By the Company. To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners, officers and
directors of each Holder, any underwriter (as defined in the Securities
Act) for such Holder and each person, if any, who controls such Holder
or underwriter within the meaning of the Securities Act or the
Securities Exchange Act of 1934, as amended, (the "1934 ACT"), against
any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Securities Act, the l934 Act or other
federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based
upon any of the following statements, omissions or violations
(collectively, "VIOLATIONS" and, individually, a "VIOLATION"):
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(i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto;
(ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make
the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the
Securities Act, the 1934 Act, any federal or state securities law or
any rule or regulation promulgated under the Securities Act, the
1934 Act or any federal or state securities law in connection with
the offering covered by such registration statement; and the Company
will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses
reasonably incurred by them, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability
or action; provided however, that the indemnity agreement contained
in this subsection 2.8(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if
such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based
upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director,
underwriter or controlling person of such Holder.
(b) By Selling Holders. To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration
statement, each person, if any, who controls the Company within the
meaning of the Securities Act, any underwriter and any other Holder
selling securities under such registration statement or any of such
other Holder's partners, directors or officers or any person who
controls such Holder within the meaning of the Securities Act or the
1934 Act, against any losses, claims, damages or liabilities (joint or
several) to which the Company or any such director, officer, controlling
person, underwriter or other such Holder, partner or director, officer
or controlling person of such other Holder may become subject under the
Securities Act, the 1934 Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by
such Holder expressly for use in connection with such registration; and
each such Holder will reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, controlling
person, underwriter or other Holder, partner, officer, director or
controlling person of such other Holder in connection with investigating
or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this
subsection 2.8(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Holder, which consent shall not be
unreasonably withheld; and provided further, that the total amounts
payable in indemnity by a Holder under this Section 2.8(b) in respect of
any Violation shall not exceed the net proceeds received by such Holder
in the registered offering out of which such Violation arises.
(c) Notice. Promptly after receipt by an indemnified party under
this Section 2.8 of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this
Section 2.8, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party shall have the right to
retain its own counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential conflict of interests between such indemnified party
and any other party represented by such counsel in such proceeding. The
failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying
party of any liability to the indemnified party under this Section 2.8,
but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 2.8.
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(d) Defect Eliminated in Final Prospectus. The foregoing indemnity
agreements of the Company and Holders are subject to the condition that,
insofar as they relate to any Violation made in a preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the
SEC at the time the registration statement in question becomes effective
or the amended prospectus filed with the SEC pursuant to SEC Rule 424(b)
(the "FINAL PROSPECTUS"), such indemnity agreement shall not inure to
the benefit of any person if a copy of the Final Prospectus was
furnished to the indemnified party and was not furnished to the person
asserting the loss, liability, claim or damage at or prior to the time
such action is required by the Securities Act.
(e) Contribution. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in
which either (i) any Holder exercising rights under this Agreement, or
any controlling person of any such Holder, makes a claim for
indemnification pursuant to this Section 2.8 but it is judicially
determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 2.8
provides for indemnification in such case, or (ii) contribution under
the Securities Act may be required on the part of any such selling
Holder or any such controlling person in circumstances for which
indemnification is provided under this Section 2.8; then, and in each
such case, the Company and such Holder will contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that such Holder
is responsible for the portion represented by the percentage that the
public offering price of its Registrable Securities offered by and sold
under the registration statement bears to the public offering price of
all securities offered by and sold under such registration statement,
and the Company and other selling Holders are responsible for the
remaining portion; provided, however, that, in any such case, (A) no
such Holder will be required to contribute any amount in excess of the
public offering price of all such Registrable Securities offered and
sold by such Holder pursuant to such registration statement; and (B) no
person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
(f) Survival. The obligations of the Company and Holders under this
Section 2.8 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.
2.9 "Market Stand-Off" Agreement. Each Holder hereby agrees that it
shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell or otherwise transfer or dispose of any
Registrable Securities or other shares of stock of the Company then owned
by such Holder (other than to donees or partners of the Holder who agree to
be similarly bound) for up to one hundred eighty (180) days following the
effective date of a registration statement of the Company filed under the
Securities Act; provided, however, that:
(a) such agreement shall be applicable only to the first such
registration statement of the Company which covers securities to be sold
on its behalf to the public in an underwritten offering but not to
Registrable Securities sold pursuant to such registration statement; and
(b) all officers and directors of the Company then holding Common
Stock of the Company enter into similar agreements.
In order to enforce the foregoing covenant, the Company shall have the
right to place restrictive legends on the certificates representing the
shares subject to this Section and to impose stop transfer instructions
with respect to the Registrable Securities and such other shares of stock
of each Holder (and the shares or securities of every other person subject
to the foregoing restriction) until the end of such period.
2.10 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time
permit the sale of the Registrable Securities to the public without
registration, after such time as a public market exists for the Common
Stock of the Company, the Company agrees to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all
times after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to
the general public;
(b) Use reasonable, diligent efforts to file with the Commission in
a timely manner all reports and other documents required of the Company
under the Securities Act and the 1934 Act (at any time after it has
become subject to such reporting requirements); and
CONFIDENTIAL Page 8 of 14
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(c) So long as a Holder owns any Registrable Securities, to furnish
to the Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144
(at any time after 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 the Securities Act and the
1934 Act (at any time after it has become subject to the reporting
requirements of the 1934 Act), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of
the Company as a Holder may reasonably request in availing itself of any
rule or regulation of the Commission allowing a Holder to sell any such
securities without registration (at any time after the Company has
become subject to the reporting requirements of the 1934 Act).
2.11 Termination of the Company's Obligations. The Company shall have no
obligations pursuant to Sections 2.2 through 2.4 with respect to any
request or requests for registration made by any Holder on a date more than
five (5) years after the closing date of the Company's initial public
offering. Notwithstanding anything to the contrary contained in Section 2.2
or 2.4, if any Holder is eligible to sell Registrable Securities pursuant
Rule 144(k) or any successor provision under the Securities Act (an
"Excluded Holder"), the Registrable Securities of such Excluded Holder
shall be disregarded in determining the requisite percentage of Registrable
Securities that are required to initiate a registration pursuant to Section
2.2 or 2.4 (i.e., a registration under Section 2.2 must be initiated by
persons holding at least two-thirds of the Registrable Securities held by
all Holders who are not Excluded Holders and a registration under Section
2.4 must be initiated by persons holding at least 25% of the Registrable
Securities held by all Holders who are not Excluded Holders). After a
registration has been requested pursuant to Section 2.2 or 2.4, as the case
may be, by the requisite percentage of shares held by Holders who are not
Excluded Holders, all Holders (including Excluded Holders) shall be
entitled to include their Registrable Securities in such registration
subject to the terms and conditions of this Agreement.
2.12 Limitations on Subsequent Registration Rights. From and after the
date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the Registrable Securities then
outstanding, enter into any agreement with any holder or prospective holder
of any securities of the Company which would allow such holder or
prospective holder (a) to include such securities in any registration filed
under Section 2.2 hereof, unless under the terms of such agreement, such
holder or prospective holder may include such securities in any such
registration only to the extent that the inclusion of his securities will
not reduce the amount of the Registrable Securities of the Holders which is
included, or (b) to make a demand registration which could result in such
registration statement being declared effective prior to the earlier of
either of the dates set forth in subsection 2.2(a), or within one hundred
twenty (120) days of the effective date of any registration effected
pursuant to Section 2.2.
3. PRE-EMPTIVE RIGHTS.
3.1 General. Each Holder (as defined in Section 2.1(d)) and any party to
whom such Holder's rights under this Section 3 have been duly assigned in
accordance with Section 4.1(b) (each such Holder or assignee being
hereinafter referred to as a "RIGHTS HOLDER") has the right of first
refusal to purchase such Rights Holder's Pro Rata Share (as defined below),
of all (or any part) of any "New Securities" (as defined in Section 3.2)
that the Company may from time to time issue after the date of this
Agreement. A Rights Holder's "PRO RATA SHARE" for purposes of this right of
first refusal is the ratio of (a) the number of Registrable Securities as
to which such Rights Holder is the Holder (and/or is deemed to be the
Holder under Section 2.1(d)), to (b) a number of shares of Common Stock of
the Company equal to the sum of (i) the total number of shares of Common
Stock of the Company then outstanding plus (ii) the total number of shares
of Common Stock of the Company into which all then outstanding shares of
Preferred Stock of the Company are then convertible.
3.2 New Securities. "NEW SECURITIES" shall mean any Common Stock or
Preferred Stock of the Company, whether now authorized or not, and rights,
options or warrants to purchase such Common Stock or Preferred Stock, and
securities of any type whatsoever that are, or may become, convertible or
exchangeable into such Common Stock or Preferred Stock; provided, however,
that the term "New Securities" does not include:
(a) up to 5,000,000 shares of the Company's Common Stock (and/or
options or warrants therefor) issued to employees, officers, directors,
contractors, advisors or consultants of the Company pursuant to
incentive agreements or plans approved by the Board of Directors of the
Company;
(b) any shares of Series A Stock, Series B Preferred Stock or
Series C Preferred Stock set forth in Exhibit A hereto (the "ISSUED
PREFERRED STOCK");
(c) any securities issuable upon conversion of or with respect to
any then outstanding shares of Series A Stock, Series B Stock or Series
C Stock of the Company or Common Stock or other securities issuable upon
conversion thereof;
CONFIDENTIAL Page 9 of 14
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(d) any securities issuable upon exercise of any options, warrants
or rights to purchase any securities of the Company outstanding on the
date of this Agreement ("WARRANT SECURITIES") and any securities
issuable upon the conversion of any Warrant Securities or upon the
exercise or conversion of any securities, if such securities were first
offered to the Rights Holders hereunder;
(e) shares of the Company's Common Stock or Preferred Stock issued
in connection with any stock split or stock dividend;
(f) securities offered by the Company to the public pursuant to a
registration statement filed under the Securities Act;
(g) up to 125,000 shares of the Company's Common Stock or Preferred
Stock (and/or options or warrants therefor) issued or issuable to
parties providing the Company with equipment leases, real property
leases, loans, credit lines, guaranties of indebtedness, cash price
reductions or similar financing such number of shares being subject to
proportional adjustment to reflect subdivisions, combinations and stock
dividends affecting the number of outstanding shares of such stock; or
(h) securities issued pursuant to the acquisition of another
corporation or entity by the Company by consolidation, merger, purchase
of all or substantially all of the assets, or other reorganization in
which the Company acquires, in a single transaction or series of related
transactions, all or substantially all of the assets of such other
corporation or entity or fifty percent (50%) or more of the voting power
of such other corporation or entity or fifty percent (50%) or more of
the equity ownership of such other entity.
3.3 Procedures. In the event that the Company proposes to undertake an
issuance of New Securities, it shall give to each Rights Holder written
notice of its intention to issue New Securities (the "NOTICE"), describing
the type of New Securities and the price and the general terms upon which
the Company proposes to issue such New Securities. Each Rights Holder shall
have ten (10) days from the date of mailing of any such Notice to agree in
writing to purchase such Rights Holder's Pro Rata Share of such New
Securities for the price and upon the general terms specified in the Notice
by giving written notice to the Company and stating therein the quantity of
New Securities to be purchased (not to exceed such Rights Holder's Pro Rata
Share). If any Rights Holder fails to so agree in writing within such ten
(10) day period to purchase such Rights Holder's full Pro Rata Share of an
offering of New Securities (a "NONPURCHASING HOLDER"), then such
Nonpurchasing Holder shall forfeit the right hereunder to purchase that
part of his Pro Rata Share of such New Securities that he did not so agree
to purchase and the Company shall promptly give each Rights Holder who has
timely agreed to purchase his full Pro Rata Share of such offering of New
Securities (a "PURCHASING HOLDER") written notice of the failure of any
Nonpurchasing Holder to purchase such Nonpurchasing Rights Holder's full
Pro Rata Share of such offering of New Securities (the "OVERALLOTMENT
NOTICE"). Each Purchasing Holder shall have a right of overallotment such
that such Purchasing Holder may agree to purchase a portion of the
Nonpurchasing Holders' unpurchased Pro Rata Shares of such offering on a
pro rata basis according to the relative Pro Rata Shares of the Purchasing
Rights Holders, at any time within five (5) days after receiving the
Overallotment Notice.
3.4 Failure to Exercise. In the event that the Rights Holders fail to
exercise in full the right of first refusal within such ten (10) plus five
(5) day period, then the Company shall have 120 days thereafter to sell the
New Securities with respect to which the Rights Holders' rights of first
refusal hereunder were not exercised, at a price and upon general terms not
materially more favorable to the purchasers thereof than specified in the
Company's Notice to the Rights Holders. In the event that the Company has
not issued and sold the New Securities within such 120-day period, then the
Company shall not thereafter issue or sell any New Securities without again
first offering such New Securities to the Rights Holders pursuant to this
Section 3.
3.5 Termination. This right of first refusal shall terminate (a)
immediately before the closing of the first underwritten sale of Common
Stock of the Company to the public pursuant to a registration statement
filed with, and declared effective by, the SEC under the Securities Act,
covering the offer and sale of Common Stock to the public at an offering
price of at least $2.20 per share (such offering price being subject to
proportional adjustment to reflect subdivisions, combinations, stock
dividends and similar transactions affecting the number of outstanding
shares of Common Stock) for an aggregate gross public offering price
(calculated before deduction of underwriters' discounts and commissions) of
at least $15,000,000 or (b) upon (i) the acquisition of all or
substantially all the assets of the Company or (ii) an acquisition of the
Company by another corporation or
CONFIDENTIAL Page 10 of 14
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entity by consolidation, merger or other reorganization in which the
holders of the Company's outstanding voting stock immediately prior to such
transaction own, immediately after such transaction, securities
representing less than fifty percent (50%) or more of the voting power of
the corporation or other entity surviving such transaction.
3.6 Waiver. Each Rights Holder hereby confirms its waiver of any right
of first refusal it may have had to purchase such Rights Holder's Pro Rata
Share of the Issued Preferred Stock.
4. ASSIGNMENT AND AMENDMENT.
4.1 Assignment. Notwithstanding anything herein to the contrary:
(a) Information Rights. The rights of an Investor under Section 1.1
or 1.2 or 1.4 hereof may be assigned only to (i) a party who acquires
from an Investor (or an Investor's permitted assigns) at least 500,000
shares of Series A Stock, Series B Stock or Series C Stock subject to
this Agreement and/or 250,000 shares (on an as-converted basis) of
Registrable Securities issued upon conversion thereof or (ii) a partner,
member or stockholder of an Investor who acquires at least 100,000
shares of Series A Stock, Series B Stock, or Series C Stock subject to
this Agreement and/or 50,000 shares (on an as-converted basis) of
Registrable Securities issued upon conversion.
(b) Registration Rights; Refusal Rights. The registration rights of
a Holder under Section 2 hereof and the rights of first refusal of a
Rights Holder under Section 3 hereof may be assigned only to (i) a party
who acquires at least 500,000 shares of Series A Stock, Series B Stock
or Series C Stock subject to this Agreement and/or 250,000 shares (on an
as-converted basis) of Registrable Securities issued upon conversion
thereof or (ii) any partner, member or shareholder of an Investor or
permitted transferee thereof; provided, however that no party may be
assigned any of the foregoing rights unless the Company is given written
notice by the assigning party at the time of such assignment stating the
name and address of the assignee and identifying the securities of the
Company as to which the rights in question are being assigned; and
provided further that any such assignee shall receive such assigned
rights subject to all the terms and conditions of this Agreement,
including without limitation the provisions of this Section 4.
4.2 Amendment of Rights. Any provision of this Agreement may be amended
and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with
the written consent of the Company and Investors (and/or any of their
permitted successors or assigns) holding shares of Series A Stock, Series B
Stock, Series C Stock and/or Conversion Stock representing and/or
convertible into a majority of all the Investors' Shares (as defined
below). As used herein, the term "INVESTORS' SHARES" shall mean the shares
of Common Stock then issuable upon conversion of all then outstanding
shares of Series A Stock, Series B Stock and Series C Stock subject to this
Agreement plus all then outstanding shares of Conversion Stock that were
issued upon the conversion of any shares of Series A Stock, Series B Stock
or Series C Stock subject to this Agreement. Any amendment or waiver
effected in accordance with this Section 4.2 shall be binding upon each
Investor, each Holder, each permitted successor or assignee of such
Investor or Holder and the Company.
5. GENERAL PROVISIONS.
5.1 Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered or if deposited in the U.S. mail by
registered or certified mail, return receipt requested, postage prepaid, as
follows:
(a) if to the Investors, at the addresses set forth on Exhibit A.
(b) if to the Company, at ββββ β. βββββββ ββββββ, ββββββββ, ββββββββ
βββββ.
Any party hereto (and such party's permitted assigns) may by notice so
given change its address for future notices hereunder. Notice shall
conclusively be deemed to have been given when personally delivered or when
deposited in the mail in the manner set forth above.
5.2 Entire Agreement. This Agreement, together with all the Exhibits
hereto, constitutes and contains the entire agreement and understanding of
the parties with respect to the subject matter hereof and supersedes any
and all prior negotiations, correspondence, agreements, understandings,
duties or obligations between the parties respecting the subject matter
hereof.
5.3 Governing Law. This Agreement shall be governed by and construed
exclusively in accordance with the internal laws of the State of Colorado
as applied to agreements among Colorado residents entered into and to be
performed entirely within Colorado, excluding that body of law relating to
conflict of laws and choice of law.
CONFIDENTIAL Page 11 of 14
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5.4 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, then such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision(s) were so excluded and shall be
enforceable in accordance with its terms.
5.5 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.
5.6 Successors And Assigns. Subject to the provisions of Section 4.1,
the provisions of this Agreement shall inure to the benefit of, and shall
be binding upon, the successors and permitted assigns of the parties
hereto.
5.7 Captions. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be
used to construe or interpret this Agreement.
5.8 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
5.9 Costs And Attorneys' Fees. In the event that any action, suit or
other proceeding is instituted concerning or arising out of this Agreement
or any transaction contemplated hereunder, the prevailing party shall
recover all of such party's costs and attorneys' fees incurred in each such
action, suit or other proceeding, including any and all appeals or
petitions therefrom.
5.10 Adjustments for Stock Splits, Etc. Wherever in this Agreement there
is a reference to a specific number of shares of Common Stock or Preferred
Stock of the Company of any class or series, then, upon the occurrence of
any subdivision, combination or stock dividend of such class or series of
stock, the specific number of shares so referenced in this Agreement shall
automatically be proportionally adjusted to reflect the affect on the
outstanding shares of such class or series of stock by such subdivision,
combination or stock dividend.
5.11 Aggregation of Stock. All shares held or acquired by affiliated
entities or persons shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement.
5.12 Arbitration Any disputes between the Company and the Investors with
respect to this Agreement shall be settled by binding, final arbitration in
accordance with the commercial arbitration rules of the American
Arbitration Association then in effect (the "AAA Rules"). Any arbitration
proceeding shall be conducted in Denver, CO. The following arbitration
provisions shall govern over any conflicting rules which may now or
hereafter be contained in the AAA Rules. Any judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
over the subject matter thereof. The arbitrator shall have the authority to
grant any equitable and legal remedies that would be available.
(a) Any such arbitration shall be conducted before a single
arbitrator who shall be compensated for his or her services at a rate to
be determined by the parties or by the American Arbitration Association,
but based upon reasonable hourly or daily consulting rates for the
arbitrator in the event the parties are not able to agree upon his or
her rate of compensation.
(b) The AAA Rules for the selection of the arbitrator shall be
followed.
(c) Each party to such arbitration shall each advance an equal
portion of the initial compensation to be paid to the arbitrator in any
such arbitration and an equal portion of the costs of transcripts and
other normal and regular expenses of the arbitration proceedings;
provided, however, that the arbitrator shall have the discretion to
grant to the prevailing party in any arbitration an award of attorneys'
fees and costs, and all costs of arbitration.
(d) The parties shall be entitled to conduct discovery proceedings
in accordance with the provisions of the Federal Rules of Civil
Procedure, subject to any limitation imposed by the arbitrator.
(e) For any claim submitted to arbitration, the burden of proof
shall be as it would be if the claim were litigated in a judicial
proceedings.
(f) Upon the conclusion of any arbitration proceeding hereunder,
the arbitrator shall render findings of fact and conclusions of law and
a written opinion setting forth the basis and reasons for any decision
reached by him or her and shall deliver such documents to each party to
this Agreement along with a signed copy of the award.
CONFIDENTIAL Page 12 of 14
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(g) The arbitrator chosen in accordance with these provisions shall
not have the power to alter, amend or otherwise affect the terms of
these arbitration provisions or the provisions of this Agreement.
(h) The parties acknowledge that, except as specifically provided
in this Agreement, no other action need be taken by either party before
proceeding directly in accordance with the provisions of this Section.
(i) The arbitration provisions set forth in this Section 5.12 are
intended by the parties to be exclusive for all purposes and applicable
to each and every controversy, dispute and/or claim in any manner
arising out of or relating to this Agreement, the meaning, application
and/or interpretation of this Agreement, any breach hereof and/or any
voluntary or involuntary termination of this Agreement with or without
cause, including, without limitation, any such controversy, dispute
and/or claim which, if pursued through any state or federal court or
administrative agency, would arise at law, in equity and/or pursuant to
statutory, regulatory and/or common law rules, regardless of whether any
such dispute, controversy and/or claim would arise in and/or from
contract, tort or any other legal and/or equitable theory or basis. The
prevailing party in any action instituted pursuant to this Section
5.13(i), or in any appeal from any arbitration conducted pursuant to
this Section 5.13, shall be entitled to recover from the other party its
reasonable attorneys' fees and other expenses incurred in such
litigation.
5.13 Effectiveness; Termination of the Original Agreement This Agreement
shall become effective upon its execution by (a) holders of at least a
majority of the Registrable Securities as defined in the Second Amended
Agreement, (b) the Company and (c) the New Investors. Upon effectiveness of
this Agreement, the First Amended Agreement and the Second Amended
Agreement shall be terminated and shall be of no further force or effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
THE COMPANY:
CHAPARRAL NETWORK STORAGE, INC.,
a Delaware corporation
/s/ ββββ β. βββββββ
-----------------------------------------
ββββ β. βββββββ, Chairman & CEO
THE INVESTORS:
Adaptec, Inc.,
a Delaware corporation
By: /s/ ββββββ ββββββ
--------------------------------------
Name
Title:
/s/ ββββ β. βββββββ
-----------------------------------------
ββββ β. βββββββ
/s/ βββββββ β. Childs
-----------------------------------------
βββββββ β. Childs
/s/ ββββ βββββ
-----------------------------------------
ββββ βββββ
/s/ F. βββββ βββββββ
-----------------------------------------
F. βββββ βββββββ
/s/ ββββββ ββββββ
-----------------------------------------
ββββββ ββββββ
CONFIDENTIAL Page 13 of 14
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Harvest Storage Technology Partners LLC,
a Delaware limited liability company
By: /s/ ββββββ ββββββ
--------------------------------------
Name ββββββ ββββββ
Title: Manager
Woodcarvers LLC,
a Delaware limited liability company
By: /s/ ββββββ ββββββ
--------------------------------------
Name ββββββ ββββββ
Title: Manager
/s/ βββ βββββββ
-----------------------------------------
βββ βββββββ
/s/ βββββ βββββββ
-----------------------------------------
βββββ βββββββ
The Linde Company
By: /s/ βββ βββββ
--------------------------------------
Name βββ βββββ
Title: Partner
Ohio Valley Venture Fund L.P.
OSF Ltd, its general partner
By: /s/ ββββ ββββββββ
--------------------------------------
Name:ββββ ββββββββ
Title: President
-----------------------------------------
ββββ ββββββ
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