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EXHIBIT 4.2
COM21, INC.
AMENDED AND RESTATED INFORMATION
AND REGISTRATION RIGHTS AGREEMENT
July 22, 1997
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TABLE OF CONTENTS
Page
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1. Certain Definitions......................................................... 1
2. Financial Statements and Reports to Stockholders............................ 2
3. Additional Information...................................................... 2
4. Inspection; Investor Representation at Board Meetings....................... 3
4.1 Inspection........................................................... 3
4.2 Investor Representation at Board Meetings............................ 3
5. Termination of Covenants.................................................... 4
6. Demand Registration......................................................... 4
6.1 Request for Registration on Form Other Than Form S-3................. 4
6.2 Right of Deferral of Registration on Form Other Than Form S-3........ 4
6.3 Request for Registration on Form S-3................................. 5
6.4 Registration of Other Securities in Demand Registration.............. 5
6.5 Underwriting in Demand Registration.................................. 6
6.5.1 Notice of Underwriting........................................ 6
6.5.2 Inclusion of Other Holders in Demand Registration............. 6
6.5.3 Selection of Underwriter in Demand Registration............... 6
6.5.4 Marketing Limitation in Demand Registration................... 6
6.5.5 Right of Withdrawal in Demand Registration.................... 7
6.6 Blue Sky in Demand Registration...................................... 7
7. Piggyback Registration...................................................... 7
7.1 Notice of Piggyback Registration and Inclusion of Registrable
Securities........................................................... 7
7.2 Underwriting in Piggyback Registration............................... 7
7.2.1 Notice of Underwriting in Piggyback Registration.............. 7
7.2.2 Marketing Limitation in Piggyback Registration................ 8
7.2.3 Allocation of Shares in Piggyback Registration................ 8
7.2.4 Withdrawal in Piggyback Registration.......................... 8
7.3 Blue Sky in Piggyback Registration................................... 9
8. Expenses of Registration.................................................... 9
9. Reports Under Securities Exchange Act of 1934............................... 9
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10. Termination of Registration Rights.......................................... 10
11. Registration Procedures and Obligations..................................... 10
12. Information Furnished by Holder............................................. 11
13. Indemnification............................................................. 11
13.1 Company's Indemnification of Holders................................. 11
13.2 Holder's Indemnification of Company.................................. 12
13.3 Indemnification Procedure............................................ 13
13.4 Contribution......................................................... 13
13.5 Conflicts............................................................ 13
14. Limitations on Registration Rights Granted to Other Securities.............. 14
15. Transfer of Rights.......................................................... 14
16. Market Stand-off............................................................ 14
17. No-Action Letter or Opinion of Counsel in Lieu of Registration;
Conversion of Preferred Stock............................................... 15
18. Miscellaneous............................................................... 15
18.1 Entire Agreement; Successors and Assigns............................. 15
18.2 Governing Law........................................................ 15
18.3 Counterparts......................................................... 15
18.4 Headings............................................................. 15
18.5 Notices.............................................................. 16
18.6 Amendment of Agreement............................................... 16
18.7 Transfer to Fund Participants........................................ 16
Schedule I - Schedule of Investors
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AMENDED AND RESTATED INFORMATION
AND REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INFORMATION AND REGISTRATION RIGHTS
AGREEMENT (the "Agreement") is made as of July 22, 1997, by and among COM21,
INC., a Delaware corporation (the "Company") and the investors listed on the
attached Schedule I who become signatories to this Agreement (collectively, the
"Investors").
R E C I T A L S
A. The Company and the Investors have entered into agreements for
sale by the Company and purchase by the Investors of the Company's securities.
B. In connection with the purchase and sale of the Company's
securities, the Company and the Investors desire to provide for the rights of
the Investors with respect to information about the Company, registration of the
Common Stock issued upon conversion or exercise of the securities according to
the terms of this Agreement, and certain other rights.
THE PARTIES AGREE AS FOLLOWS:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
(a) "Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time of Registration administering the
Securities Act.
(b) "Convertible Securities" shall mean securities of the Company
convertible into or exchangeable for Common Stock of the Company or into other
securities that are convertible into or exchangeable for Common Stock.
(c) "Form S-3" shall mean Form S-3 issued by the Commission or any
substantially similar form then in effect.
(d) "Holder" shall mean any holder of outstanding Registrable
Securities which have not been sold to the public, but only if such holder is
one of the Investors or an assignee or transferee of Registration rights as
permitted by Section 15.
(e) "Initiating Holders" shall mean Holders who in the aggregate
hold at least thirty-three percent (33%) of the Registrable Securities.
(f) "Material Adverse Event" shall mean an occurrence having a
consequence that either (a) is materially adverse as to the business,
properties, or financial condition of the Company or (b) is reasonably
foreseeable, has a reasonable likelihood of occurring, and if it were
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to occur might materially adversely affect the business, properties, prospects,
or financial condition of the Company.
(g) "1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
(h) The terms "Register", "Registered", and "Registration" refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act ("Registration Statement"), and the
declaration or ordering of the effectiveness of such Registration Statement.
(i) "Registrable Securities" shall mean all Common Stock not
previously sold to the public and issued or issuable upon conversion or exercise
of any of the Company's Convertible Securities purchased by or issued to the
Investors, including Common Stock issued pursuant to stock splits, stock
dividends and similar distributions, and any securities of the Company granted
registration rights pursuant to Section 14 of this Agreement.
(j) "Registration Expenses" shall mean all expenses incurred by
the Company in complying with Sections 7 or 8 of this Agreement, including,
without limitation, all federal and state registration, qualification, and
filing fees, printing expenses, fees and disbursements of counsel for the
Company and one special counsel for Holders (if different from the Company),
blue sky fees and expenses, and the expense of any special audits incident to or
required by any such registration.
(k) "Securities Act" shall mean the Securities Act of 1933, as
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.
(l) "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities pursuant to
this Agreement.
2. Financial Statements and Reports to Stockholders. The Company shall
deliver to each Investor as soon as practicable after the end of each fiscal
year of the Company and its subsidiaries (if any), and in any event within 90
days thereafter, an audited consolidated balance sheet of the Company and its
subsidiaries (if any) as of the end of such year and audited consolidated
statements of income, stockholders' equity and cash flow for such year, which
year-end financial reports shall be in reasonable detail and shall be prepared
in accordance with generally accepted accounting principles and accompanied by
the opinion of independent public accountants of recognized standing selected by
the Company. In addition, the Company shall deliver to the Investors: (a)
contemporaneously with delivery to holders of Common Stock, a copy of each
periodic report of the Company delivered to holders of Common Stock and (b) an
annual capitalization summary.
3. Additional Information. As long as an Investor (together with any
affiliate) or its transferee holds the lesser of (i) all of the Convertible
Securities purchased by such Investor, and
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(ii) not less than 100,000 shares of Convertible Securities of the Company (or
an equivalent number of shares consisting of Registrable Securities issued upon
conversion or exercise of the Convertible Securities of the Company or a
combination of such Registrable Securities and such Convertible Securities), as
adjusted for recapitalizations, stock splits, stock dividends and the like, the
Company will deliver to such Investor:
(a) As soon as practicable after the end of each month, and in any
event within 30 days thereafter, unaudited consolidated balance sheets of the
Company and its subsidiaries, if any, as of the end of such month, and
consolidated statements of income and cash flow for such month and for the
current fiscal year to date, prepared in accordance with generally accepted
accounting principles (other than for accompanying notes and subject to changes
resulting from year-end audit adjustment).
(b) As soon as practicable following submission to and approval by
the Board of Directors of the Company, but in no event later than 90 days after
the end of each fiscal year, an operating budget and plan (the "Plan")
respecting the next fiscal year prepared on a monthly basis, including balance
sheets and statements of cash flows for such months, and a summary of such Plan
together with any update of the Plan as such update is prepared.
4. Inspection; Investor Representation at Board Meetings
4.1 Inspection. The Company shall permit each Investor, at such
Investor's expense and upon reasonable notice to the Company, 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 each such Investor;
provided, however, that the Company shall not be obligated pursuant to this
Section 4.1 to provide any information which it reasonably and in good faith
considers to be a trade secret or similar confidential information that is too
sensitive to disclose to such Investor. Subject to Section 15, the rights of an
Investor under this Section 4.1 may not be assigned as part of such Investor's
sale of any of the Registrable Securities or Convertible Securities except with
the consent of the Company, which consent shall not be unreasonably withheld.
4.2 Investor Representation at Board Meetings. Each Investor
holding at least 200,000 shares of Convertible Securities of the Company, shall
have the right to receive notices (except with respect to previously unscheduled
telephonic meetings) and minutes of each meeting of the Board as if such
Investor were a director, and to designate a representative to attend all Board
meetings, and to speak at or otherwise participate in such meetings to the
extent permitted by the Board; provided, however, that such person may disclose
or use any information made known by virtue of such notice, minutes, or
attendance only to the extent consistent with the fiduciary obligations of a
director of the Company, whether or not such person actually is a director. The
rights of an Investor under this Section 4.2 are not assignable.
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5. Termination of Covenants. The covenants of the Company set forth in
Sections 2, 3 and 4 shall be terminated and be of no further force or effect
upon the earlier of (a) immediately prior to the closing of the first public
offering of the Common Stock of the Company that is effected pursuant to a
Registration Statement filed with, and declared effective by, the Commission
under the Securities Act (other than either a public offering limited solely to
employees of the Company or an offering pursuant to Rule 145 under the
Securities Act) and (b) the date the Company registers any securities under the
Securities and Exchange Act of 1934, and such covenants shall terminate as to
any Investor as of the date such Investor no longer holds any shares of the
capital stock of the Company.
6. Demand Registration.
6.1 Request for Registration on Form Other Than Form S-3. Subject
to the terms of this Agreement, in the event that the Company shall receive from
the Initiating Holders at any time after (subject to Section 16) three months
after the Company's initial public offering of shares of Common Stock under a
Registration Statement, a written request that the Company effect any
Registration with respect to all or a part of the Registrable Securities on a
Form other than Form S-3 for an offering with a reasonably anticipated aggregate
offering price to the public of at least $7,500,000, the Company shall (i)
promptly give written notice of the proposed Registration to all other Holders
and shall (ii) as soon as practicable, use its best efforts to effect
Registration of the Registrable Securities specified in such request, together
with any Registrable Securities of any Holder joining in such request as are
specified in a written request given within 20 days after written notice from
the Company. The Company shall not be obligated to take any action to effect any
such registration pursuant to this Section 6.1 (i) during the period starting
with the date sixty (60) days prior to the Company's estimated date of filing,
and ending on the date six (6) months immediately following the effective date
of a Registration pertaining to securities of the Company (other than a
registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan) provided that the Company is employing all reasonable
efforts in good faith to cause such Registration to become effective and that
the Company's estimate of the date of filing such Registration is made in good
faith or (ii) after the Company has effected two such Registrations pursuant to
this Section 6.1 and such Registrations have been declared effective.
6.2 Right of Deferral of Registration on Form Other Than Form S-3.
If the Company shall furnish to all such Holders who joined in the request a
certificate signed by the President 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 for any Registration to be effected as requested
under Section 6.1, the Company shall have the right, exercisable not more than
once in any twelve-month period, to defer the filing of a Registration Statement
with respect to such offering for a period of not more than 120 days from
delivery of the request of the Initiating Holders.
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6.3 Request for Registration on Form S-3.
(a) If a Holder or Holders of the outstanding Registrable
Securities request that the Company file a Registration Statement on Form S-3
(or any successor form to Form S-3) for a public offering of shares of
Registrable Securities and the Company is a registrant entitled to use Form S-3
to Register the Registrable Securities for such an offering, the Company shall
use all reasonable efforts to cause such Registrable Securities to be Registered
for the offering on such form and to cause such Registrable Securities to be
qualified in such jurisdictions as the Holder or Holders may reasonably request;
provided, however, that the Company shall not be required to effect more than
two Registrations pursuant to this Section 6.3 in any twelve (12) month period.
The substantive provisions of Section 6.5 shall be applicable to each
Registration initiated under this Section 6.3.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to file a Registration Statement pursuant to this Section 6.3:
(i) in any particular jurisdiction in which the
Company would be required to execute a general consent to service of process in
effecting such Registration, qualification, or compliance unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(ii) If the Company, within ten (10) days of the
receipt of the request of the initiating Holders, gives notice of its bona fide
intention to effect the filing of a Registration Statement with the Commission
within sixty (60) days of receipt of such request (other than with respect to a
registration statement relating to a Rule 145 transaction or an offering solely
to employees), provided that the Company is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective;
(iii) within six months immediately following the
effective date of any registration statement pertaining to the securities of the
Company (other than a registration of securities in a Rule 145 transaction or
with respect to an employee benefit plan); or
(iv) if the Company shall furnish to such Holders a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company or its stockholders for a registration statement to be filed in the
near future, then the Company's obligation to use its best efforts to file a
registration statement shall be deferred for a period not to exceed 120 days
from the receipt of the request to file such registration by such Holder
provided that the Company shall not exercise the right contained in this
paragraph (iv) more than once in any twelve (12) month period.
6.4 Registration of Other Securities in Demand Registration. Any
Registration Statement filed pursuant to the request of the Initiating Holders
under this Section 6 may, subject
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to the provisions of Section 6.5, include securities of the Company other than
Registrable Securities.
6.5 Underwriting in Demand Registration.
6.5.1 Notice of Underwriting. If the Initiating Holders intend
to distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to this Section 6, and the Company shall include such information in
the written notice referred to in Section 6.1 or 6.3. The right of any Holder to
Registration pursuant to Section 6 shall be conditioned upon such Holder's
agreement to participate in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting.
6.5.2 Inclusion of Other Holders in Demand Registration. If
the Company, officers or directors of the Company holding Common Stock other
than Registrable Securities, or holders of securities other than Registrable
Securities, request inclusion in such Registration, the Initiating Holders, to
the extent they deem advisable and consistent with the goals of such
Registration, may, on behalf of all Holders, offer to any or all of the Company,
such officers or directors, and such holders of securities other than
Registrable Securities that such securities other than Registrable Securities be
included in the underwriting and may condition such offer on the acceptance by
such persons of the terms of this Section 6. In the event, however, that the
number of shares so included exceeds the number of shares of Registrable
Securities included by all Holders, such Registration shall be treated as
governed by Section 7 hereof rather than Section 6, and it shall not count as a
Registration for purposes of Section 6.1 hereof.
6.5.3 Selection of Underwriter in Demand Registration. The
Company shall (together with all Holders proposing to distribute their
securities through such underwriting) enter into an underwriting agreement with
the representative ("Underwriter's Representative") of the underwriter or
underwriters selected for such underwriting by the Holders of a majority of the
Registrable Securities being registered by the Initiating Holders and agreed to
by the Company.
6.5.4 Marketing Limitation in Demand Registration. In the
event the Underwriter's Representative advises the Initiating Holders in writing
that market factors (including, without limitation, the aggregate number of
shares of Common Stock requested to be Registered, the general condition of the
market, and the status of the persons proposing to sell securities pursuant to
the Registration) require a limitation of the number of shares to be
underwritten, then (i) first the Common Stock (other than Registrable
Securities) held by officers or directors of the Company, (ii) next the
securities other than Registrable Securities, and (iii) last the securities
requested to be Registered by the Company, shall be excluded from such
Registration to the extent required by such limitation. If a limitation of the
number of shares is still required, the Initiating Holders shall so advise all
Holders and the number of shares of Registrable Securities that may be included
in the Registration and underwriting shall be allocated
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among all Holders in proportion, as nearly as practicable, to the respective
amounts of Registrable Securities entitled to inclusion in such Registration
held by such Holders at the time of filing the Registration Statement. No
Registrable Securities or other securities excluded from the underwriting by
reason of this Section 6.5.4 shall be included in such Registration Statement.
6.5.5 Right of Withdrawal in Demand Registration. If any
Holder of Registrable Securities, or a holder of other securities entitled (upon
request) to be included in such Registration, disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the underwriter and the Initiating Holders delivered at least seven
days prior to the effective date of the Registration Statement. The securities
so withdrawn shall also be withdrawn from the Registration Statement.
6.6 Blue Sky in Demand Registration. In the event of any
Registration pursuant to Section 6, the Company will exercise its best efforts
to Register and qualify the securities covered by the Registration Statement
under such other securities or Blue Sky laws of such jurisdictions as shall be
reasonably appropriate for the distribution of such securities; provided,
however, that (i) the Company shall not be required to qualify to do business or
to file a general consent to service of process in any such states or
jurisdictions, and (ii) notwithstanding anything in this Agreement to the
contrary, in the event any jurisdiction in which the securities shall be
qualified imposes a non-waivable requirement that expenses incurred in
connection with the qualification of the securities be borne by selling
stockholders, such expenses shall be payable pro rata by selling stockholders.
7. Piggyback Registration.
7.1 Notice of Piggyback Registration and Inclusion of Registrable
Securities. Subject to the terms of this Agreement, in the event the Company
decides to Register any of its Common Stock (either for its own account or the
account of a security holder or holders exercising their respective demand
registration rights) on a form that would be suitable for a registration
involving solely Registrable Securities, the Company will: (i) promptly give
each Holder written notice thereof (which shall include a list of the
jurisdictions in which the Company intends to attempt to qualify such securities
under the applicable Blue Sky or other state securities laws) 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 delivered to the Company by any Holder
within 15 days after delivery of such written notice from the Company.
7.2 Underwriting in Piggyback Registration.
7.2.1 Notice of Underwriting in Piggyback Registration. 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 7.1. In such event, the
right of any Holder to Registration shall be conditioned upon such underwriting
and the inclusion of such Holder's Registrable Securities in
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such underwriting to the extent provided in this Section 7. 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 with the
Underwriter's Representative for such offering. The Holders shall have no right
to participate in the selection of the underwriters for an offering pursuant to
this Section 7.
7.2.2 Marketing Limitation in Piggyback Registration. In the
event the Underwriter's Representative advises the Holders seeking Registration
of Registrable Securities pursuant to Section 7 in writing that market factors
(including, without limitation, the aggregate number of shares of Common Stock
requested to be Registered, the general condition of the market, and the status
of the persons proposing to sell securities pursuant to the Registration)
require a limitation of the number of shares to be underwritten, the
Underwriter's Representative (subject to the allocation priority set forth in
Section 7.2.3) may:
(a) in the case of the Company's initial Registered
public offering, exclude some or all Registrable Securities from such
registration and underwriting; and
(b) in the case of any Registered public offering
subsequent to the initial public offering, limit the number of shares of
Registrable Securities to be included in such Registration and underwriting to
not less than thirty percent (30%) of the securities included in such
Registration (based on aggregate market values).
7.2.3 Allocation of Shares in Piggyback Registration. In the
event that the Underwriter's Representative limits the number of shares to be
included in a Registration pursuant to Section 7.2.2, the number of shares to be
included in such Registration shall be allocated (subject to Section 7.2.2) in
the following manner: The shares (other than Registrable Securities) held by
officers or directors of the Company shall be excluded from such Registration
and underwriting to the extent required by such limitation. If a limitation of
the number of shares is still required after such exclusion, the number of
shares that may be included in the Registration and underwriting by selling
stockholders shall be allocated among all other Holders thereof and other
holders of securities other than Registrable Securities requesting and legally
entitled to include shares in such Registration, in proportion, as nearly as
practicable, to the respective amounts of securities (including Registrable
Securities) which such Holders and such other holders would otherwise be
entitled to include in such Registration. No Registrable Securities or other
securities excluded from the underwriting by reason of this Section 7.2.3 shall
be included in the Registration Statement.
7.2.4 Withdrawal in Piggyback Registration. If any Holder
disapproves of the terms of any such underwriting, such person may elect to
withdraw therefrom by written notice to the Company and the underwriter
delivered at least seven days prior to the effective date of the Registration
Statement. Any Registrable Securities or other securities excluded or withdrawn
from such underwriting shall be withdrawn from such Registration.
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7.3 Blue Sky in Piggyback Registration. In the event of any
Registration of Registrable Securities pursuant to this Section 7, the Company
will exercise its best efforts to Register and qualify the securities covered by
the Registration Statement under such other securities or Blue Sky laws of such
jurisdictions (not exceeding 20 unless otherwise agreed to by the Company) as
shall be reasonably appropriate for the distribution of such securities;
provided, however, that (i) the Company shall not be required to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions, and (ii) notwithstanding anything in this Agreement to the
contrary, in the event any jurisdiction in which the securities shall be
qualified imposes a non-waivable requirement that expenses incurred in
connection with the qualification of the securities be borne by selling
stockholders, such expenses shall be payable pro rata by selling stockholders.
8. Expenses of Registration. All Registration Expenses incurred in
connection with two Registrations pursuant to Section 6 (other than a
Registration on Form S-3), two Registrations pursuant to Section 6.3 and
unlimited Registrations pursuant to Section 7, shall be borne by the Company.
All Registration Expenses incurred in connection with any other registration,
qualification, or compliance, shall be apportioned among the Holders and other
holders of the securities so registered on the basis of the number of shares so
registered. Notwithstanding the above, the Company shall not be required to pay
for any expenses of any registration proceeding begun pursuant to Section 6 if
the registration request is subsequently withdrawn at the request of the Holders
of a majority of the Registrable Securities to be registered (which Holders
shall bear such expenses), unless the Holders of a majority of the Registrable
Securities agree to forfeit their right to one demand registration pursuant to
Section 6; provided further, however, that if at the time of such withdrawal,
the Holders have learned of a Material Adverse Event with respect to the
condition, business, or prospects of the Company not known to the Holders at the
time of their request, then the Holders shall not be required to pay any of such
expenses and shall retain their rights pursuant to Section 6. All Selling
Expenses shall be borne by the holders of the securities Registered pro rata on
the basis of the number of shares Registered.
9. Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the Commission that may at
any time permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:
(a) use its best efforts to make and keep public information
available, as those terms are understood and defined in Commission Rule 144, at
all times after ninety (90) days after the effective date of the first
Registration Statement under the Securities Act filed by the Company for the
offering of its securities to the general public;
(b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the 1934 Act as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as practicable after the end
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of the fiscal year in which the first Registration Statement filed by the
Company for the offering of its securities to the general public is declared
effective;
(c) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the Act and
the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Commission 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), the Securities Act and the 1934 Act (at any time after it
has become subject to such reporting requirements), or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3 (at any time
after it so qualifies), (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested by a
Holder in availing itself of any rule or regulation of the Commission which
permits a Holder to sell any such securities without Registration or pursuant to
such form.
10. Termination of Registration Rights. The rights to cause the Company
to Register securities granted under Sections 6 and 7 of this Agreement shall
terminate, with respect to each Holder, on the earlier of (i) the date five
years after the closing date of the Company's initial public offering, (ii) upon
such Holder holding less than 1% of the outstanding Registrable Securities
provided such Holder's Registrable Securities can be sold pursuant to Rule 144
within a three-month period without compliance with the registration
requirements of the Securities Act.
11. Registration Procedures and Obligations. Whenever required under
this Agreement to effect the Registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the Commission a Registration Statement
with respect to such Registrable Securities and use its best efforts to cause
such Registration Statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such Registration Statement effective for up to one hundred twenty (120) days.
(b) Prepare and file with the Commission 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 numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
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(d) Use its best efforts to register and qualify the securities
covered by such Registration Statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. 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) Provide a transfer agent and registrar for all Registrable
Securities Registered pursuant to such Registration Statement and a CUSIP number
for all such Registrable Securities, in each case not later than the effective
date of such Registration.
(h) Furnish, at the request of any Holder requesting Registration
of Registrable Securities pursuant to this Agreement, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a Registration pursuant to this Agreement, (i) an opinion, dated such date,
of the counsel representing the Company for the purposes of such Registration,
in form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders, and
(ii) a letter dated such date, from the independent certified public accountants
of the Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the underwriters.
12. Information Furnished by Holder. It shall be a condition precedent
of the Company's obligations under this Agreement that each Holder of
Registrable Securities included in any Registration furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
or Holders as the Company may reasonably request.
13. Indemnification.
13.1 Company's Indemnification of Holders. To the extent permitted
by law, the Company will indemnify each Holder, each of its officers, directors,
and constituent partners, legal counsel for the Holders, and each person
controlling such Holder, with respect to which Registration, qualification, or
compliance of Registrable Securities has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls any
underwriter
11.
15
against all claims, losses, damages, or liabilities (or actions in respect
thereof) to the extent such claims, losses, damages, or liabilities arise out of
or are based upon any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus or other document (including any
related Registration Statement) incident to any such Registration,
qualification, or compliance, or are 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 not misleading, or any violation or alleged
violation by the Company of the Securities Act, the 1934 Act, any state
securities law, or any rule or regulation promulgated under the Securities Act,
the 1934 Act or any state securities law applicable to the Company and relating
to action or inaction required of the Company in connection with any such
Registration, qualification, or compliance; and the Company will pay as incurred
to each such Holder, each such underwriter, and each person who controls any
such Holder or underwriter, any legal and any other expenses reasonably incurred
in connection with investigating or defending any such claim, loss, damage,
liability, or action; provided, however, that the indemnity contained in this
Section 13.1 shall not apply to amounts paid in settlement of any such claim,
loss, damage, liability, or action if settlement is effected without the consent
of the Company (which consent shall not unreasonably be withheld); and provided,
further, 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
upon any untrue statement or omission based upon written information furnished
to the Company by such Holder, underwriter, or controlling person and stated to
be for use in connection with the offering of securities of the Company.
13.2 Holder's Indemnification of Company. To the extent permitted
by law, 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 pursuant to this Agreement, indemnify the Company,
each of its directors and officers, each legal counsel and independent
accountant of the Company, 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 the Act, and each other such Holder,
each of its officers, directors, and constituent partners, and each person
controlling such other Holder, against all claims, losses, damages, and
liabilities (or actions in respect thereof) arising out of or based upon any
untrue statement (or alleged untrue statement) of a material fact contained in
any such Registration Statement, prospectus, offering circular, or other
document, or any 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 any violation or alleged violation by such Holder of the
Securities Act, the 1934 Act, any state securities law, or any rule or
regulation promulgated under the Securities Act, the 1934 Act or any state
securities law applicable to such Holder and relating to action or inaction
required of such Holder in connection with any such Registration, qualification,
or compliance, and will pay as incurred to the Company, such Holders, such
directors, officers, partners, persons, law and accounting firms, underwriters
or control persons, any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability, or action, in each case 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
12.
16
in conformity with written information furnished to the Company by such Holder
and stated to be specifically for use in connection with the offering of
securities of the Company; provided, however, that the indemnity contained in
this Section 13.2 shall not apply to amounts paid in settlement of any such
claim, loss, damage, liability, or action if settlement is effected without the
consent of such Holder (which consent shall not unreasonably be withheld);
provided, further, that such Holder's liability under this Section 13.2 shall
not exceed such Holder's proceeds from the offering of securities made in
connection with such Registration.
13.3 Indemnification Procedure. Promptly after receipt by an
indemnified party under this Section 13 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 13, notify the indemnifying
party in writing of the commencement thereof and generally summarize such
action. The indemnifying party shall have the right to participate in and to
assume the defense of such claim; provided, however, that the indemnifying party
shall be entitled to select counsel for the defense of such claim with the
approval of any parties entitled to indemnification, which approval shall not be
unreasonably withheld; provided further, however, that if either party
reasonably determines that there may be a conflict between the position of the
Company and the Investors in conducting the defense of such action, suit, or
proceeding by reason of recognized claims for indemnity under this Section 13,
then counsel for such party shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interest of such party. The failure to notify an indemnifying party promptly of
the commencement of any such action, if prejudicial to the ability of the
indemnifying party to defend such action, shall relieve such indemnifying party,
to the extent so prejudiced, of any liability to the indemnified party under
this Section 13, but the omission so to notify the indemnifying party will not
relieve such party of any liability that such party may have to any indemnified
party otherwise other than under this Section 13.
13.4 Contribution. If the indemnification provided for in this
Section 13 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
13.5 Conflicts. Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in the underwriting
agreement entered into in
13.
17
connection with the underwritten public offering are in conflict with the
foregoing provisions, the provisions in the underwriting agreement shall
control.
The obligations of the Company and Holders under this Section 13
shall survive the completion of any offering of Registrable Securities in a
Registration Statement under this Agreement or otherwise.
14. Limitations on Registration Rights Granted to Other Securities. From
and after the date of this Agreement, the Company shall not enter into any
agreement with any holder or prospective holder of any securities of the Company
providing for the granting to such holder of any information or Registration
rights, except that, with the consent of the Holders of a majority of the
aggregate of the Convertible Securities and Registrable Securities then
outstanding, additional holders may be added as parties to this Agreement with
regard to any or all securities of the Company held by them. Each such
additional party shall execute a counterpart of this Agreement, and upon
execution by such additional party and by the Company, shall be considered an
Investor for all purposes of this Agreement. The additional parties and the
additional Registrable Securities shall be identified in an amendment to
Schedule I hereto.
15. Transfer of Rights. The rights to information under Sections 2, 3,
and 4 and the right to cause the Company to Register securities granted by the
Company to the Investors under this Agreement may be assigned by any Holder to a
transferee or assignee of any Convertible Securities or Registrable Securities
not sold to the public acquiring at least 10,000 shares of such Holder's
Registrable Securities (equitably adjusted for any stock splits, subdivisions,
stock dividends, changes, combinations or the like); provided, however, that (i)
the shares of Convertible Securities or Registrable Securities acquired by said
transferee must constitute at least 20% of Holder's aggregate of Convertible
Securities and Registrable Securities immediately prior to the transfer, (ii)
the Company must receive written notice prior to the time of said transfer,
stating the name and address of said transferee or assignee and identifying the
securities with respect to which such information and Registration rights are
being assigned, and (iii) the transferee or assignee of such rights must not be
a person deemed by the Board of Directors of the Company, in its best judgment,
to be a competitor or potential competitor of the Company. Notwithstanding the
limitation set forth in the foregoing sentence respecting the minimum number of
shares which must be transferred, any Holder which is a partnership may transfer
such Holder's Registration rights to such Holder's constituent partners without
restriction as to the number or percentage of shares acquired by any such
constituent partner.
16. Market Stand-off. Each Holder hereby agrees that, if so requested by
the Underwriter's Representative (if any) in connection with the Company's
initial public offering, such Holder shall not sell, make any short sale of,
loan, grant any option for the purchase of, or otherwise transfer or dispose of
(or demand the registration pursuant to Section 6.1 of) any Registrable
Securities or other securities of the Company without the prior written consent
of the Company and the Underwriter's Representative for such period of time (not
to exceed 180 days) following the effective date of a Registration Statement of
the Company filed under the Securities Act as may be requested by the
Underwriter's Representative. The obligations of Holders under
14.
18
this Section 16 shall be conditioned upon similar agreements being in effect
with each other stockholder who is an officer, director, or selling stockholder.
17. No-Action Letter or Opinion of Counsel in Lieu of Registration;
Conversion of Preferred Stock. Notwithstanding anything else in this Agreement,
if the Company shall have obtained from the Commission a "no-action" letter in
which the Commission has indicated that it will take no action if, without
Registration under the Securities Act, any Holder disposes of Registrable
Securities covered by any request for Registration made under this Agreement in
the specific manner in which such Holder proposes to dispose of the Registrable
Securities included in such request (such as including, without limitation,
inclusion of such Registrable Securities in an underwriting initiated by either
the Company or the Holders), or if in the opinion of counsel for the Company
concurred in by counsel for such Holder, which concurrence shall not be
unreasonably withheld, no Registration under the Securities Act is required in
connection with such disposition, the Registrable Securities included in such
request shall not be eligible for Registration under this Agreement; provided,
however, that any Registrable Securities not so disposed of shall be eligible
for Registration in accordance with the terms of this Agreement with respect to
other proposed dispositions to which this Section 17 does not apply. The
Registration rights set forth in this Agreement of the Holders of the
Registrable Securities are conditioned upon the conversion of the Registrable
Securities with respect to which registration is sought into Common Stock prior
to the effective date of the Registration Statement.
18. Miscellaneous.
18.1 Entire Agreement; Successors and Assigns. This Agreement
constitutes the entire contract between the Company and the Investors relative
to the subject matter hereof. Any previous agreements between the Company and
any Investor concerning Registration rights (including, without limitation, the
Amended and Restated Information and Registration Rights Agreement dated April
4, 1996) are superseded by this Agreement. Subject to the exceptions
specifically set forth in this Agreement, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
executors, administrators, heirs, successor, and assigns of the parties.
18.2 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California excluding
those laws that direct the application of the laws of another jurisdiction.
18.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18.4 Headings. The headings of the Sections of this Agreement are
for convenience and shall not by themselves determine the interpretation of this
Agreement.
15.
19
18.5 Notices. Any notice required or permitted hereunder shall be
given in writing and shall be conclusively deemed effectively given upon
personal delivery, or five days after deposit in the United States mail, by
registered or certified mail, postage prepaid, addressed (i) if to the Company,
as set forth below the Company's name on the signature page of this Agreement,
and (ii) if to an Investor, at such Investor's address as set forth on Schedule
A, or at such other address as the Company or such Investor may designate by ten
(10) days' advance written notice to the Investors or the Company, respectively.
18.6 Amendment of Agreement. Any provision of this Agreement may be
amended only by a written instrument signed by the Company and by persons
holding at least sixty percent (60%) of the Registrable Securities as defined in
Section 1 of this Agreement.
18.7 Transfer to Fund Participants. Notwithstanding any other
provision of this Agreement to the contrary, if any Investor makes a
distribution of Registrable Securities pro rata to its limited or general
partners, the parties agree that such partners shall receive the rights set
forth in this Agreement (other than the rights set forth at Section 4.2) to the
extent such Investor was entitled at the time of such distribution. For purposes
of determining share ownership requirements in this Agreement, shares owned by
an Investor and all affiliated entities shall be aggregated.
16.
20
IN WITNESS WHEREOF, the parties hereto have executed this Amended
and Restated Information and Registration Rights Agreement as of the day and
year first above written.
The Company: COM21, INC.,
a Delaware corporation
By: ____________________________________
βββββ β. ββββββ, President
and Chief Executive Officer
INVESTORS:
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
21
ββββ βββββ CAPITAL VENTURES, L.P.
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
FARNIL INVESTMENTS N.V.
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
___________________________________
ββββββ βββββββββ
___________________________________
βββ β. Last
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
22
βββββββββ COMPANY, N.V.
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
___________________________________
ββββββββ βββββββββ
ββββββββββ ASSOCIATES
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
23
NEXUS GROUP, LLC
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
PORCELAIN PARTNERS LP
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
SIEMENS AG
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
24
βββ βββββββ CAPITAL MANAGEMENT
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
XYLAN
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
ANDREESSEN CHARITABLE REMAINDER 1996
TRUST DATED FEBRUARY 2, 1996
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
25
BAYVIEW INVESTORS, L.P.
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
________________________________________
ββββββ β. ββββ, ββ.
βββββββ INVESTMENT COMPANY V L.P.
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
26
CHARTER VENTURES II L.P.
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
COMDISCO, INC.
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
CROSSPOINT VENTURE PARTNERS
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
________________________________________
βββββ βββββββββ
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
27
________________________________________
βββββ βββββ
EUROLINK
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
ββββββββ ASSOCIATES, INC.
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
________________________________________
ββββββ β. ββββ
________________________________________
βββββββ β. βββββββ
________________________________________
βββββββ β. ββββββ
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
28
________________________________________
βββββ βββββ
JAPAN ASSOCIATED FINANCE COMPANY
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
βββββββ βββββββ ββββββββ & βββββ VII
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
KPCB INFORMATION ZAIBATSU FUND II
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
29
KOREA TECHNOLOGY BANKING
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
ββββββ AND ASSOCIATES
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
ββββββ β. βββββββ, INC.
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
30
________________________________________
βββββ ββββββββββ
________________________________________
βββββββ ββββββββββ
________________________________________
ββββββββ βββββββ
________________________________________
βββββββ βββββββ
NEW ENTERPRISE ASSOCIATES VI, L.P.
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
________________________________________
ββββ ββββ
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
31
3COM CORPORATION
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
________________________________________
βββββββ β. βββ ββββ
VERTEX INVESTMENT (II) (LTD.)
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
32
UMB BANK, SUCCESSOR TRUSTEE OF βββββββ,
PHLEGER & ββββββββ LLP RETIREMENT
SAVINGS F/B/O βββββββ β. βββββ
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
UMB BANK, SUCCESSOR TRUSTEE OF βββββββ,
PHLEGER & ββββββββ LLP RETIREMENT
SAVINGS F/B/O ββββ β. βββββββ
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
33
UMB BANK, SUCCESSOR TRUSTEE OF βββββββ,
PHLEGER & ββββββββ LLP RETIREMENT
SAVINGS F/B/O ββββββ β. βββββββ
By: ___________________________________
(Signature)
___________________________________
(Print Name)
Its: ___________________________________
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
34
SCHEDULE I
SCHEDULE OF INVESTORS