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EXHIBIT 10.3
FOURTH AMENDED AND RESTATED CO-SALE AGREEMENT
THIS FOURTH AMENDED AND RESTATED CO-SALE AGREEMENT (the "Agreement") is
made and entered into as of February 19, 1999 by and among ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (together, the "Founders"), Persistence
Software, Inc., a California corporation (the "Company"), and the Investors
listed on Exhibit A attached hereto (the "Investors").
WHEREAS, certain of the Investors (the "Series B Investors") acquired
shares of the Company's Series B Preferred Stock on March 12, 1996 and in
connection therewith entered into a Co-Sale Agreement dated March 12, 1996,
which was amended and restated on November 27, 1996 to include additional
purchasers of Series B Preferred Stock as of that date (the "November 1996
Co-Sale Agreement");
WHEREAS, certain of the Investors (the "First Series C Investors")
acquired shares of the Company's Series C Preferred Stock on December 31, 1997
and in connection therewith entered into a Second Amended and Restated Co-Sale
Agreement dated December 31, 1997 (the "December 1997 Co-Sale Agreement");
WHEREAS, certain of the Investors (the "Second Series C Investors,"
and, together with the First Series C Investors, the "Series C Investors")
acquired shares of the Company's Series C Preferred Stock on August 13, 1998 and
in connection therewith entered into a Third Amended and Restated Co-Sale
Agreement dated August 13, 1998 (the "August 1998 Co-Sale Agreement");
WHEREAS, certain Investors (the "Series D Investors") have an interest
in acquiring from the Company shares of its Series D Preferred Stock pursuant to
a Series D Preferred Stock Purchase Agreement dated February 19, 1999 (the
"Series D Purchase Agreement");
WHEREAS, the Founders, the Series B Investors, the Series C Investors
and the Company wish to provide a further inducement to the Series D Investors
to purchase shares of the Company's Series D Preferred Stock by offering to the
Series D Investors the opportunity to participate, upon the terms and conditions
set forth in this Agreement, in subsequent sales by the Founders of shares of
the Company's Common Stock; and
WHEREAS, the parties hereto desire to amend and restate the August 1998
Co-Sale Agreement in its entirety hereby.
IT IS HEREBY AGREED AS FOLLOWS:
1. SALES BY THE FOUNDERS
1.1 Notice of Sales. Should any Founder propose to accept one or more
bona fide offers (collectively, the "Purchase Offer") from any persons to
purchase shares of the Company's
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Common Stock (the "Shares") from him (other than as set forth in Section 1.5
hereof), he shall promptly deliver a notice (the "Notice") to the Company and
each Investor stating the terms and conditions of such Purchase Offer.
1.2 Participation Right. If the Company chooses not to exercise its
right of first refusal contained in Section 3(b) of those common stock purchase
agreements dated June 14, 1991 between such Founder and Fulcrum Innovations,
Inc., the Company's predecessor in interest, each Investor shall have the right,
exercisable upon written notice to such Founder within ten (10) business days
after receipt of the Notice, to participate in such Founder's sale of Shares
pursuant to the specified terms and conditions of such Purchase Offer. To the
extent an Investor exercises such right of participation in accordance with the
terms and conditions set forth below, the number of Shares which such Founder
may sell pursuant to such Purchase Offer shall be correspondingly reduced. The
right of participation of each Investor shall be subject to the following terms
and conditions:
(a) Calculation of Shares. Treating all Preferred Stock as if it
had been converted into Common Stock for the purposes of this Section 1.2(a)
only, each Investor may sell all or any part of that number of shares of Common
Stock of the Company equal to the product obtained by multiplying (i) the
aggregate number of shares of Common Stock covered by the Purchase Offer by (ii)
a fraction, the numerator of which is the number of shares of Common Stock of
the Company (including Common Stock issuable upon conversion of Preferred Stock)
at the time owned by such Investor and the denominator of which is the combined
number of shares of Common Stock of the Company (including Common Stock issuable
upon conversion of Preferred Stock) at the time owned by such Founder, including
shares transferred to Permitted Transferees (as hereinafter defined) in
accordance herewith, and the Investors.
(b) Delivery of Certificates. Each Investor may effect its
participation in the sale by delivering to such Founder for transfer to the
purchase offeror one or more certificates, properly endorsed for transfer, which
represent the number of shares of Common Stock, or Preferred Stock or Common
Stock issued upon conversion thereof, which such Investor elects to sell
pursuant to this Section 1.2.
1.3 Transfer. The stock certificate or certificates which the Investor
delivers to the Founder pursuant to Section 1.2 shall be delivered by such
Founder to the purchase offeror in consummation of the sale pursuant to the
terms and conditions specified in the Notice, and such Founder shall promptly
thereafter remit to such Investor that portion of the sale proceeds to which
such Investor is entitled by reason of its participation in such sale.
1.4 No Adverse Effect. The exercise or non-exercise of the rights of
the Investors hereunder to participate in one or more sales of Shares made by a
Founder shall not adversely affect their rights to participate in subsequent
sales of Common Stock by a Founder pursuant to Section 1.2 hereof.
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1.5 Permitted Transactions. The participation rights of the Investors
shall not pertain or apply to:
(a) Any transaction or series of transactions by a Founder
involving the sale or transfer of not more than five percent (5%) of a Founder's
aggregate stockholding in the Company, which holding shall be calculated on an
as-converted basis;
(b) Any pledge of Company's Common Stock made by a Founder pursuant
to a bona fide loan transaction which creates a mere security interest;
(c) Any repurchase of Common Stock by the Company;
(d) Any bona fide gift; or
(e) Any transfer to a Founder's ancestors, descendants or spouse or
to a trustee for their benefit.
provided, that (i) such Founder shall inform the Investors of such pledge,
transfer or gift prior to effecting it and (ii) the pledgee, transferee or donee
(collectively, the "Permitted Transferees") shall furnish the Investors with a
written agreement to be bound by and comply with all provisions of this
Agreement applicable to such Founder.
2. TRANSFER OF STOCK. Any attempt to transfer shares of the Company in violation
of Section 1 hereof shall be void and the Company agrees it will not effect such
a transfer nor will it treat any alleged transferee as the holder of such shares
without the written consent of the Investors.
3. LEGENDED CERTIFICATES
3.1 Each certificate representing shares of the Common Stock of the
Company now or hereafter owned by the Founders or hereafter issued to any
Permitted Transferee pursuant to Section 1.5 shall be endorsed with the
following legend:
THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN
CO-SALE AGREEMENT BY AND BETWEEN THE SHAREHOLDER, THE CORPORATION
AND CERTAIN HOLDERS OF COMMON AND PREFERRED STOCK OF THE
CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN
REQUEST TO THE SECRETARY OF THE CORPORATION.
3.2 The Section 3.1 legend shall be removed upon termination of this
Agreement in accordance with the provisions of Section 4.1.
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4. MISCELLANEOUS PROVISIONS
4.1 Termination. This Agreement shall terminate upon the earliest to
occur of any one of the following events:
(a) The liquidation, dissolution or indefinite cessation of the
business operations of the Company;
(b) The execution by the Company of a general assignment for the
benefit of creditors or the appointment of a receiver or trustee to take
possession of the property and assets of the Company; or
(c) The consummation of the Company's initial public offering of
securities or the consummation of an acquisition of the Company pursuant to
which a Public Market exists for the Company's capital stock (or other stock
issued in exchange therefore). For the purpose of this Agreement, a "Public
Market" shall be deemed to exist if (i) such stock is listed on a national
securities exchange (as that term is used in the Securities Exchange Act of
1934, as amended) or (ii) such stock is traded on the over-the-counter market
and prices are published daily on business days in a recognized financial
journal.
4.2 Notices. Any notice required or permitted to be given to a party
pursuant to the provisions of this Agreement shall be in writing and shall be
effective upon personal delivery or upon deposit in the U.S. certified or
registered mail, postage prepaid and properly addressed to the party to be
notified as set forth on the Company's books and records or at such other
address as such party may designate by ten (10) days' advance written notice to
the other parties hereto.
4.3 Successors and Assigns. This Agreement and the rights and
obligations of the parties hereunder shall inure to the benefit of, and be
binding upon, their respective successors, assigns and legal representatives.
The participation rights of the Investors hereunder are only assignable to an
assignee or transferee of not less than 100,000 shares of Common Stock and/or
Preferred Stock (as adjusted for any stock splits, reverse stock splits, stock
dividends, recapitalizations and the like); provided that such limitation shall
not apply to transfers by an Investor to controlling shareholders, controlling
partners, retired controlling partners or trustees of the Investor (including
spouses and ancestors, lineal descendants and siblings of such partners or
spouses who acquire the Common Stock, or Preferred Stock or Common Stock issued
upon conversion thereof, by gift, will or intestate succession), provided that
such transferee shall not be in a business that competes with the Company and
provided that all such transferees or assignees agree in writing to appoint a
single representative as their attorney in fact for the purpose of receiving any
notices and exercising their rights under this Agreement (such affiliated
transferees of an Investor shall be referred to as "Affiliated Parties"). The
shares of stock of the Company held by Affiliated Parties of an Investor shall
be aggregated with the shares of such Investor for the purposes of this
Agreement.
4.4 Severability. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity,
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illegality or unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
4.5 Modifications and Amendments. This Agreement may be modified or
amended only with the written consent of the Company, each Founder and a
two-thirds (2/3rds) interest of the Investors (based on the number of shares of
Common Stock held by the Investors, assuming conversion of all Preferred Stock
held by the Investors), provided, however, that in the event an amendment or
waiver adversely affects the rights and/or obligations of any holder of
Preferred Stock under this Agreement in a different manner than the other
holders of Preferred Stock (it being understood that, without limiting the
foregoing, different Investors shall not be affected differently because of
proportional differences that arise out of differences in the original issue
price for the Preferred Stock held by such Investor or the number of shares of
Preferred Stock held by such Investor) such amendment or waiver shall also
require the written consent of such adversely affected Investor, and provided
further that any amendment or waiver of Section 4.10 shall require the written
consent of Intel Corporation ("Intel"). Any waiver by a party of its rights
hereunder shall be effective only if evidenced by a written instrument executed
by a duly authorized representative of such party. In no event shall such waiver
of any rights hereunder constitute the waiver of such rights in any future
instance unless the waiver so specifies in writing.
4.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
4.7 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.
4.8 Best Efforts. The Company agrees to use its best efforts to enforce
the terms of this Agreement, to inform the Investors of any breach hereof and to
assist the Investors in the exercise of their rights and performance of their
obligations hereunder.
4.9 Legal Fees. In the event of any action at law, suit in equity or
arbitration proceeding in relation to this Agreement or any shares or other
securities of the Company transferred hereunder, the prevailing party, or
parties, shall be paid by the other party or parties a reasonable sum for
attorneys' fees and expenses of such prevailing party or parties.
4.10 Confidentiality. The Founders agree to be bound by the
confidentiality and nondisclosure provisions of Article 5 of the Fifth Amended
and Restated Investor Rights Agreement by and among the Company and the
Investors listed thereto, dated as of the date hereof.
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IN WITNESS WHEREOF, the parties have executed this Fourth Amended and
Restated Co-Sale Agreement as of the date first above written.
COMPANY:
PERSISTENCE SOFTWARE, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------
Title: President
-------------------
FOUNDERS:
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
INVESTORS:
MSIT HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------
Title: Senior Advisor
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SIGNATURE PAGE TO PERSISTENCE SOFTWARE, INC. FOURTH AMENDED AND
RESTATED CO-SALE AGREEMENT
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ VENTURE
INVESTORS, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Partners II,
L.P. its General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital II, Inc.
Managing General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ VENTURE CAPITAL FUND II, C.V.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Partners II,
L.P. its General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital II, Inc.
Managing General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ VENTURE CAPITAL FUND II, C.V.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Partners II,
L.P. its General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital II, Inc.
Managing General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
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SIGNATURE PAGE TO PERSISTENCE SOFTWARE, INC. FOURTH AMENDED AND
RESTATED CO-SALE AGREEMENT
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇ INVESTMENTS PLC,
a United Kingdom Public Limited Company
By: /s/ C. Fitzherbect / /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: C. Fitzherbect / ▇. ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Title: Authorized Signatory /
Company Secretary
------------------------------------
CISCO SYSTEMS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: Vice President, Treasurer
------------------------------------
NEXUS CAPITAL PARTNERS I, L.P.
By: /s/ Will ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: Will ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Title: General Partner
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
By: /s/ Buzz ▇▇▇▇▇▇
-----------------------------------------
Name: Buzz ▇▇▇▇▇▇
------------------------------------
Title: Managing Director
THE ENTREPRENEURS' FUND, L.P.
By: BW Management, LLC, its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Managing Director
SIGNATURE PAGE TO PERSISTENCE SOFTWARE, INC. FOURTH AMENDED AND
RESTATED CO-SALE AGREEMENT
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▇▇▇▇▇▇ MASTER TRUST
By: Amerindo Investment Advisors, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: Attorney-in-Fact
-----------------------------------
ATGF II, A Panamanian Corporation
By: Amerindo Investment Advisors, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Director
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 1995 TRUST
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
Title:
-----------------------------------
INTEL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Vice President and Treasurer
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SIGNATURE PAGE TO PERSISTENCE SOFTWARE, INC. FOURTH AMENDED AND
RESTATED CO-SALE AGREEMENT
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REUTERS HOLDINGS SWITZERLAND SA
By: [illegible]
-----------------------------------------
Name: [illegible]
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Title:
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SIGNATURE PAGE TO PERSISTENCE SOFTWARE, INC. FOURTH AMENDED AND
RESTATED CO-SALE AGREEMENT
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EXHIBIT A
INVESTORS
SERIES B INVESTORS:
MSIT Holdings, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ Six
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital Fund II, ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Investors, ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital Fund II, C.V.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Investments PLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
SERIES C INVESTORS:
Cisco Systems, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
ATGF II
▇▇▇▇▇▇ Master Trust
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 1995 Trust
c/o Amerindo Investment Advisors, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Nexus Capital Partners I, L.P.
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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SERIES C INVESTORS (continued):
▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The Entrepreneurs' Fund, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital Fund II, ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Investors, ▇.▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital Fund II, C.V.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Investments PLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
SERIES D INVESTORS:
Intel Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Treasurer
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
Intel Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
The Entrepreneurs' Fund, L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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Reuters Holdings Switzerland SA
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