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EXHIBIT 4.3
AMENDMENT NO. 1
TO THE
SIEBEL SYSTEMS, INC.
RESTATED INVESTOR RIGHTS AGREEMENT
WHEREAS, Siebel Systems, Inc. (the "Company") and certain shareholders
of the Company ("Shareholders") entered into the Restated Investor Rights
Agreement dated December 1, 1995 attached hereto as Exhibit A ("Investor Rights
Agreement"); and
WHEREAS, certain Shareholders are purchasing Series D Preferred Stock
of the Company ("New Purchasers");
NOW, THEREFORE, in consideration of the New Purchasers buying Series D
Preferred Stock of the Company, the holders of a majority of the Registrable
Securities (as defined in the Investor Rights Agreement) hereby amend, pursuant
to section 4.6.1 of the Investor Rights Agreement, the definition of the word
"Shares" under section 1.1 of the Investor Rights Agreement to read as follows:
"`Shares' shall mean the Company's Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock originally issued to the Purchasers."
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IN WITNESS WHEREOF, the Company and a majority of the holders of
Registrable Securities have duly authorized and caused this amendment to be
executed as follows:
SIEBEL SYSTEMS, INC. -----------------------------------
(Print Name of Shareholder)
By:
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Thomas M. Siebel, President
By:
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Title:
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(Print Name of Shareholder)
By:
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Title:
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(Print Name of Shareholder)
By:
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Title:
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(Print Name of Shareholder)
By:
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Title:
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EXHIBIT A
RESTATED INVESTOR RIGHTS AGREEMENT
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SIEBEL SYSTEMS, INC.
RESTATED INVESTOR RIGHTS AGREEMENT
DECEMBER 1, 1995
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TABLE OF CONTENTS
PAGE
I. GENERAL ......................................................... 1
II. REGISTRATION; RESTRICTIONS ON TRANSFER .......................... 2
2.1 Restrictions on Transfer ................................. 2
2.2 Demand Registration ...................................... 3
2.3 Piggyback Registrations .................................. 4
2.4 Form S-3 Registration .................................... 5
2.5 Expenses of Registration ................................. 6
2.6 Obligations of the Company ............................... 6
2.7 Termination of Registration Rights ....................... 7
2.8 Delay of Registration .................................... 7
2.9 Indemnification .......................................... 7
2.10 Assignment of Registration Rights ........................ 9
2.11 "Market Stand-Off" Agreement ............................. 9
III. RIGHTS OF FIRST REFUSAL ......................................... 10
3.1 Subsequent Offerings ..................................... 10
3.2 Exercise of Rights ....................................... 10
3.3 Issuance of Equity Securities to Other Persons ........... 10
3.4 Sales of Equity Securities by Purchasers ................. 11
3.5 Termination of Rights of First Refusal ................... 12
3.6 Transfer of Rights of First Refusal ...................... 12
3.7 Excluded Securities ...................................... 12
IV. MISCELLANEOUS ................................................... 13
4.1 Amendment of Prior Agreement ............................. 13
4.2 Governing Law ............................................ 13
4.3 Survival ................................................. 13
4.4 Successors and Assigns ................................... 13
4.5 Separability ............................................. 14
4.6 Amendment and Waiver ..................................... 14
4.7 Delays or Omissions ...................................... 14
4.8 Notices .................................................. 14
4.9 Titles and Subtitles ..................................... 14
4.10 Counterparts ............................................. 14
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RESTATED INVESTOR RIGHTS AGREEMENT
THIS RESTATED INVESTOR RIGHTS AGREEMENT (the "Agreement") is entered into
as of the 1st day of December 1995, by and among Siebel Systems, Inc., a
California corporation (the "Company"), Thomas M. Siebel ("Siebel") and the
persons and entities set forth on Exhibit A attached hereto. Such persons and
entities shall be referred to hereinafter as the "Purchasers" and each
individually as a "Purchaser."
RECITALS
WHEREAS, the Company granted Siebel and certain purchasers (the "Series A
and B Purchasers") of its Series A Preferred Stock (the "Series A Stock") and
Series B Preferred Stock (the "Series B Stock") certain registration and other
rights pursuant to the Investor Rights Agreement, dated March 17, 1995, among
the Company, Siebel and the Series A and B Purchasers (the "Original
Agreement"); and
WHEREAS, the Company proposes to sell and issue shares of its Series C
Preferred Stock (the "Series C Stock") pursuant to that certain Series C
Preferred Stock Purchase Agreement dated as of the date hereof (the "Purchase
Agreement"); and
WHEREAS, as a condition of entering into the Purchase Agreement, the
purchasers of Series C Stock (the "Series C Purchasers") have requested that
the Company extend to them registration rights and other rights as set forth
below;
WHEREAS, the Company, Siebel and the Series A and B Purchasers desire to
amend the Original Agreement to grant such rights to the Series C Purchasers;
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and in the
Purchase Agreement, the parties mutually agree as follows:
I. GENERAL
1.1 DEFINITIONS. As used in this Agreement the following terms shall have
the following respective meanings:
"Form S-3" means such form under the Securities Act as in effect on the
date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"Holder" means any person owning of record Registrable Securities that
have not been sold to the public or any assignee of record of such Registrable
Securities in accordance with Section 2.10 hereof.
"Register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with
the Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.
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"Registrable Securities" means (i) Common Stock of the Company issued or
issuable upon the conversion of the Shares; (ii) Siebel Shares; and (iii) any
Common Stock of the Company issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of,
such above-described securities. Notwithstanding the foregoing, Registrable
Securities shall not include any securities sold by a person to the public
either pursuant to a registration statement or Rule 144 or sold in a private
transaction in which the transferror's rights under Section 2.10 of this
Agreement are not assigned.
"Registration Expenses" shall mean all expenses incurred by the Company in
complying with Sections 2.2, 2.3 and 2.4 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and disbursements not to exceed Ten
Thousand Dollars ($10,000) of a single special counsel for the Holders, blue
sky fees and expenses and the expense of any special audits incident to or
required by any such registration (but excluding the compensation of regular
employees of the Company which shall be paid in any event by the Company).
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale.
"Shares" shall mean the Company's Series A Stock, Series B Stock and
Series C Stock.
"Siebel Shares" shall mean the shares of Common Stock of the Company now
owned or hereinafter obtained by Siebel.
II. REGISTRATION; RESTRICTIONS ON TRANSFER
2.1 RESTRICTIONS ON TRANSFER.
(a) Each Holder agrees not to make any disposition of all or any
portion of the Registrable Securities (or the Common Stock issuable upon the
conversion thereof) unless and until the transferee has agreed in writing for
the benefit of the Company to be bound by this Section 2.1, provided and to the
extent such Sections are then applicable and:
(i) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or
(ii) (A) Such Holder shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (B) if
reasonably requested by the Company, such Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the
Securities Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144.
(iii) Notwithstanding the provisions of paragraphs (i) and (ii)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by a Holder which is (A)
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a partnership to its partners in accordance with partnership interests, or (B)
to the Holder's family member or trust for the benefit of an individual Holder,
provided the transferee will be subject to the terms of this Section 2.1 to the
same extent as if he were an original Holder hereunder.
(b) Each certificate representing Series A Stock, Series B Stock,
Series C Stock or Common Stock shall (unless otherwise permitted by the
provisions of the Agreement) be stamped or otherwise imprinted with legends
substantially similar to the following (in addition to any legend required under
applicable state securities laws or as provided elsewhere in the Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL OR
BASED ON OTHER WRITTEN EVIDENCE IN FORM AND SUBSTANCE SATISFACTORY
TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
THE SHARES REPRESENTED HEREBY ARE SUBJECT TO A RIGHT OF FIRST REFUSAL
OPTION IN FAVOR OF THE COMPANY OR ITS ASSIGNEE AS PROVIDED IN AN
AGREEMENT BETWEEN THE COMPANY AND THE HOLDER HEREOF.
(c) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if the holder shall have
obtained an opinion of counsel (which counsel may be counsel to the Company)
reasonably acceptable to the Company to the effect that the securities proposed
to be disposed of may lawfully be so disposed of without registration,
qualification or legend.
(d) Any legend endorsed on an instrument pursuant to applicable state
securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
2.2 DEMAND REGISTRATION.
2.2.1 Subject to the conditions of this Section 2.2, if the Company
shall receive a written request from the Holders of (i) more than fifty percent
(50%) of the Registrable Securities then outstanding held by the Purchasers with
respect to one of the registrations under this Section 2.2 or (ii) more than
fifty percent (50%) of the Siebel Shares then outstanding, with respect to the
other one of the registrations under this Section 2.2 (in each such case, the
"Initiating Holders") that the Company file a registration statement under the
Securities Act, then the Company shall effect, within thirty (30) days of the
receipt thereof, give written notice of such request to all Holders, and subject
to the limitations of Section 2.2.2, as soon as practicable, the registration
under the Securities Act either of all Registrable Securities that the Holders
request to be registered, but in any event the registration statement with
respect to such offering shall be filed within one hundred twenty (120) days of
such receipt.
2.2.2 If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2.2
and the Company shall include such information in the written notice referred to
in Section 2.2.1. In such event, the right of any Holder to include his
securities in such registration shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's securities
in the underwriting (unless otherwise mutually agreed by a majority in interest
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of the Initiating Holders and such Holder) to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holders (which underwriter or underwriters shall be
reasonably acceptable to the Company). Notwithstanding any other provision of
this Section 2.2, if the underwriter advises the Company in writing that
marketing factors require a limitation of the number of securities to be
underwritten (including Registrable Securities) then the Company shall so
advise all Holders of such securities which would otherwise be underwritten
pursuant hereto, and the number of shares that may be included in the
underwriting shall be allocated to the Holders of such Registrable Securities
on a pro rata basis based on the number of Registrable Securities held by all
such Holders (including the Initiating Holders). Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from the
registration.
2.2.3 The Company shall not be obligated to effect more than two (2)
registrations pursuant to this Section 2.2.
2.2.4 The Holders shall not have the right to request any registration
under this Section 2.2 until the date one hundred eighty (180) days following
the effective date of the registration statement pertaining to the initial
firmly underwritten public offering of the Company's common stock (the "Initial
Offering"). In addition, the Company shall not be required to effect a
registration pursuant to this Section 2.2 if within thirty (30) days of receipt
of a written request from Initiating Holders pursuant to Section 2.2.1, the
Company gives notice to the Holders of the Company's intention to register its
securities pursuant to Section 2.3 within ninety (90) days and in such event the
Initiating Holders' request shall not be counted for purposes of Section 2.2.3
above.
2.2.5 Notwithstanding the foregoing, if the Company shall furnish to
Holders requesting a registration statement pursuant to this Section 2.2, a
certificate signed by the Chairman of the Board stating that in the good faith
judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement, 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 that such right to delay a request
shall be exercised by the Company no more than once in any one-year period.
2.3 PIGGYBACK REGISTRATIONS.
2.3.1 The Company shall notify all Holders of Registrable Securities in
writing at least twenty (20) days prior to the filing of any registration
statement under the Securities Act for purposes of a public offering of
securities of the Company (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company, but
excluding registration statements relating to employee benefit plans and
corporate reorganizations) and will afford each such Holder an opportunity to
include in such registration statement all or part of such Registrable
Securities held by such Holder. Each Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by it
shall, within ten (10) days after receipt of the above-described notice from the
Company, so notify the Company in writing. Such notice shall state the intended
method of disposition of the Registrable Securities by such Holder. If a Holder
decides not to include all of its Registrable Securities in any registration
statement thereafter filed by the Company, such Holder shall nevertheless
continue to have the right to include any Registrable Securities in any
subsequent registration statement or registration statements as may be filed by
the Company with respect to offerings of its securities, all upon the terms and
conditions set forth herein.
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2.3.2 If the registration statement under which the Company gives
notice under this Section 2.3 is for an underwritten offering, the Company shall
so advise the Holders of Registrable Securities. In such event, the right of any
such Holder to be included in a registration pursuant to this Section 2.3 shall
be conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting. Notwithstanding any other provision of the Agreement, if the
underwriter determines in good faith that marketing factors require a limitation
of the number of shares to be underwritten, the number of shares that may be
included in the underwriting shall be allocated, first, to the Company; second,
to the Holders requesting inclusion on a pro rata basis based on the total
number of Registrable Securities held by the Holders; and third, to any
shareholder of the Company (other than a Holder) on a pro rata basis. No such
reduction shall reduce the securities being offered by the Company for its own
account to be included in the registration and underwriting. If such
registration is subsequent to the Company's Initial Offering, the number of
Registrable Securities held by the Holders shall not be reduced to less than 30%
of the total number of shares registered.
2.4 FORM S-3 REGISTRATION. In case the Company shall receive from any
Holder or Holders of Registrable Securities a written request or requests that
the Company effect a registration on Form S-3 and any related qualification or
compliance with respect to all or a part of the Registrable Securities owned by
such Holder or Holders, the Company will:
2.4.1 promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders of Registrable
Securities; and
2.4.2 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
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 2.4: (i) if
Form S-3 is not available for such offering by the Holders, (ii) if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public of less than
$500,000, (iii) if the Company shall furnish to the Holders a certificate signed
by the Chairman of the Board of Directors of the Company stating that in the
good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such Form S-3
Registration to be effected at such time, in which event the Company shall have
the right to defer the filing of the Form S-3 registration statement for a
period of not more than ninety (90) days after receipt of the request of the
Holder or Holders under this Section 2.4, provided that such right to delay a
request shall be exercised by the Company no more than once in any one-year
period, (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.
2.4.3 Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All such Registration Expenses incurred in
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connection with registrations requested pursuant to this Section 2.4 after the
first two (2) registrations shall be paid by the selling Holders pro rata in
proportion to the number of shares sold by each.
2.5 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Section 2.2 or any registration under Section 2.3 or Section 2.4 herein shall
be borne by the Company. All Selling Expenses incurred in connection with any
registrations hereunder, shall be borne by the holders of the securities so
registered pro rata on the basis of the number of shares so registered. The
Company shall not, however, be required to pay for expenses of any registration
proceeding begun pursuant to Section 2.2 or 2.4, the request of which has been
subsequently withdrawn by the Initiating Holders unless (a) the withdrawal is
based upon material adverse information concerning the Company of which the
Initiating Holders were not aware at the time of such request or (b) the
Holders of a majority of Registrable Securities agree to forfeit their right to
one requested registration pursuant to Section 2.2 or Section 2.4 in which
event such right shall be forfeited by all Holders). If the Holders are
required to pay the Registration Expenses, such expenses shall be borne by the
holders of securities (including Registrable Securities) requesting such
registration in proportion to the number of shares for which registration was
requested. If the Company is required to pay the Registration Expenses of a
withdrawn offering pursuant to Section 2.5(a), then the Holders shall not
forfeit their rights pursuant to Section 2.2 or Section 2.4 to a demand
registration.
2.6 OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
2.6.1 Prepare and file with the SEC 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 either the Registrable Securities registered thereunder, keep
such registration statement effective for up to ninety (90) days.
2.6.2 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.
2.6.3 Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
2.6.4 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.
2.6.5 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.
2.6.6 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
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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.
2.6.7 Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated as of such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (ii) a letter
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities.
2.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Article II shall terminate and be of no further force and effect
seven (7) years after the date following the Company's Initial Offering.
2.8 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 Article 2.
2.9 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 2.2, 2.3 or 2.4:
2.9.1 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 1934 Act
or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation") by the Company: (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the 1934 Act or any state securities law in connection with the offering covered
by such registration statement; and the Company will reimburse each such Holder,
partner, officer or director, underwriter or controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided however,
that the indemnity agreement contained in this Section 2.9.1 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
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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.
2.9.2 To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers, each person, if any, who controls the Company within the meaning of
the Securities Act, any underwriter and any other Holder selling securities
under such registration statement or any of such other Holder's partners,
directors or officers or any person who controls such Holder, against any
losses, claims, damages or liabilities (joint or several) to which the Company
or any such director, officer, controlling person, underwriter or other such
Holder, or partner, director, officer or controlling person of such other Holder
may become subject under the Securities Act, the 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 under an
instrument duly executed by such Holder and stated to be specifically 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, or partner, officer,
director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is judicially determined that there was such a Violation; provided, however,
that the indemnity agreement contained in this Section 2.9.2 shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; provided further, that in no event shall any
indemnity under this Section 2.9 exceed the net proceeds from the offering
received by such Holder.
2.9.3 Promptly after receipt by an indemnified party under this Section
2.9 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 2.9, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.9, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.9.
2.9.4 If the indemnification provided for in this Section 2.9 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any losses, claims, damages or liabilities referred to herein,
the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying
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party on the one hand and of the indemnified party on the other in connection
with the Violation(s) that resulted in such loss, claim, damage or liability,
as well as any other relevant equitable considerations. The relative fault of
the indemnifying party and of the indemnified party shall be determined by a
court of law by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
2.9.5 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 indemnified party if a copy of the Final Prospectus was furnished
to the indemnified party, the indemnified party had an obligation to furnish
such Final Prospectus to the person asserting the loss, liability, claim or
damage and the indemnified party did not so furnish the Final Prospectus to the
person asserting the loss, liability, claim or damage at or prior to the time
such action is required by the Securities Act.
2.9.6 The obligations of the Company and Holders under this Section 2.9
shall survive the completion of any offering of Registrable Securities in a
registration statement, and otherwise.
2.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to this Article II may be assigned
by a Holder to a transferee or assignee of Registrable Securities; provided,
however, that no such transferee or assignee shall be entitled to registration
rights under Sections 2.2, 2.3 or 2.4 hereof unless it acquires at least fifty
thousand (50,000) shares of Registrable Securities (as adjusted for stock
splits and combinations) and the Company shall, within twenty (20) days after
such transfer, be furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned. Notwithstanding the foregoing, rights
to cause the Company to register securities may be assigned to any subsidiary,
parent, general partner or limited partner of a Holder.
2.11 "MARKET STAND-OFF" AGREEMENT. If requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, a Purchaser
shall not sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company held by such Purchaser (other than those included in
the registration) for a period specified by the underwriters not to exceed one
hundred eighty (180) days following the effective date of a registration
statement of the Company filed under the Securities Act, provided that:
(i) such agreement shall apply only to the Company's Initial Offering;
and
(ii) all officers and directors of the Company and holders of at least
one percent (1%) of the Company's voting securities enter into similar
agreements.
The obligations described in this Section 2.11 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares (or securities) subject
to the foregoing restriction until the end of said one hundred eighty (180) day
period.
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III. RIGHTS OF FIRST REFUSAL.
3.1 SUBSEQUENT OFFERINGS. Each Purchaser holding more than 250,000
shares (as adjusted for any stock splits, combinations and similar events) of
Series B Stock, Series C Stock or Common Stock issued upon conversion thereof
(a "Major Purchaser") shall have a right of first refusal to purchase its pro
rata share of all Equity Securities, as defined below, that the Company may,
from time to time, propose to sell and issue after the date of this Agreement,
other than the Equity Securities excluded by Section 3.6 hereof. ITOCHU
Corporation, ITOCHU TECHNO-SCIENCE Corporation and ITOCHU TECHNOLOGY, Inc.
(collectively, the "Itochu Group") shall be considered as one entity for the
purposes of the preceding sentence, and therefore the ITOCHU Group shall be a
Major Purchaser so long as it collectively holds more than 250,000 shares of
Series C Stock or Common Stock issued upon conversion thereof. Each Major
Purchaser's pro rata share is equal to the ratio of the number of shares of the
Company's Common Stock (including all shares of Common Stock issued or issuable
upon conversion of the Series B Stock or Series C Stock) which such Major
Purchaser is deemed to be a holder of immediately prior to the issuance of such
Equity Securities to the total number of shares of the Company's Common Stock
on a fully-diluted basis (including all shares of Common Stock issuable upon
conversion of the Series A Stock, Series B Stock and Series C Stock and other
convertible securities and shares issuable upon exercise of warrants or options
then outstanding) then outstanding. The term "Equity Securities" shall mean
(i) any stock or similar security of the Company, (ii) any security
convertible, with or without consideration, into any stock or similar security
(including any option to purchase such a convertible security), (iii) any
security carrying any warrant or right to subscribe to or purchase any stock or
similar security or (iv) any such warrant or right, but shall exclude the
securities set forth in Section 3.7 below.
3.2 EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it shall give each Major Purchaser written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Company proposes to issue the same. Each Major Purchaser shall have
ten (10) days from the giving of such notice to agree to purchase its pro rata
share of the Equity Securities for the price and upon the terms and conditions
specified in the notice by giving written notice to the Company and stating
therein the quantity of Equity Securities to be purchased. Notwithstanding the
foregoing, the Company shall not be required to offer or sell such Equity
Securities to any Major Purchaser who would cause the Company to be in
violation of applicable federal securities laws by virtue of such offer or
sale.
3.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If not all of the
Major Purchasers elect to purchase their pro rata share of the Equity
Securities, then the Company shall promptly notify in writing the Major
Purchasers who do so elect and shall offer such Major Purchasers the right to
acquire such unsubscribed shares ("Subscription Notice"). The Major Purchasers
shall have five (5) days after receipt of the Subscription Notice to notify the
Company of its election to purchase all or a portion thereof of the
unsubscribed shares. If the Major Purchasers fail to exercise in full the
rights of first refusal, the Company shall have ninety (90) days thereafter to
sell the Equity Securities in respect of which the Major Purchasers' rights
were not exercised, at a price and upon terms and conditions no more favorable
to the purchasers thereof than specified in the Company's notice to the Major
Purchasers pursuant to Section 3.2 hereof. If the Company has not sold such
Equity Securities within such ninety (90) days, the Company shall not
thereafter issue or sell any Equity Securities, without first offering such
securities to the Major Purchasers in the manner provided above.
Notwithstanding the foregoing, the Company agrees that for as long as Andersen
Consulting shall hold at least a 7.5% fully diluted interest in the Company,
the Company will not issue equity securities to any of the following companies
or their affiliated companies: Electronic Data Systems, International Business
Machines, Coopers & Lybrand, Deloitte & Touche, Ernst & Young, KPMG Peat
Marwick and Price Waterhouse.
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3.4 SALES OF EQUITY SECURITIES BY PURCHASERS. No Purchaser shall sell,
assign, pledge, or in any manner transfer any of the shares of stock of the
corporation or any right or interest therein, whether voluntarily or by
operation of law, or by gift or otherwise, except by a transfer which meets the
requirements hereinafter set forth in this Section 3.4:
(a) If the Purchaser desires to sell or otherwise transfer any of his
shares of stock, then the Purchaser shall first give written notice thereof to
the Company. The notice shall name the proposed transferee and state the number
of shares to be transferred, the proposed consideration, and all other terms and
conditions of the proposed transfer.
(b) For thirty (30) days following receipt of such notice, the Company
shall have the option to purchase all (but not less than all) of the shares
specified in the notice at the price and upon the terms set forth in such
notice; provided, however, that, with the consent of the Purchaser, the Company
shall have the option to purchase a lesser portion of the shares specified in
said notice at the price and upon the terms set forth therein. In the event of a
gift, property settlement or other transfer in which the proposed transferee is
not paying the full price for the shares, and that is not otherwise exempted
from the provisions of this Section 3.4, the price shall be deemed to be the
fair market value of the stock at such time as determined in good faith by the
Company's Board of Directors. In the event the Company elects to purchase all of
the shares or, with consent of the Purchaser, a lesser portion of the shares, it
shall give written notice to the transferring Purchaser of its election and
settlement for said shares shall be made as provided below in paragraph (d).
(c) The Company may assign its rights hereunder.
(d) In the event the Company and/or its assignee(s) elect to acquire
any of the shares of the transferring Purchaser as specified in said
transferring Purchaser's notice, the Company shall so notify the transferring
Purchaser and settlement thereof shall be made in cash within thirty (30) days
after the Secretary of the Company receives said transferring Purchaser's
notice; provided that if the terms of payment set forth in said transferring
Purchaser's notice were other than cash against delivery, the Company and/or its
assignee(s) shall pay for said shares on the same terms and conditions set forth
in said transferring Purchaser's notice.
(e) In the event the Company and/or its assignees(s) do not elect to
acquire all of the shares specified in the transferring Purchaser's notice, said
transferring Purchaser may, within the 90-day period following the expiration of
the option rights granted to the Company and/or its assignees(s) herein,
transfer the shares specified in said transferring Purchaser's notice which were
not acquired by the Company and/or its assignees(s) as specified in said
transferring Purchaser's notice. All shares so sold by said transferring
Purchaser shall continue to be subject to the provisions of this Section 3.4 in
the same manner as before said transfer.
(f) Anything to the contrary contained herein notwithstanding, the
following transactions shall be exempt from the provisions of this Section 3.4,
provided in each case that the transferee is not a competitor of the Company:
(1) A Purchaser's transfer of any or all shares held either during
such Purchaser's lifetime or on death by will or intestacy to such Purchaser's
immediate family or to any custodian or trustee for the account of such
Purchaser or such Purchaser's immediate family. "Immediate family" as used
herein shall mean spouse, lineal descendant, father, mother, brother, or sister
of the Purchaser making such transfer.
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(2) A Purchaser's bona fide pledge or mortgage of any shares with
a commercial lending institution, provided that any subsequent transfer of said
shares by said institution shall be conducted in the manner set forth in this
Section 3.4.
(3) A Purchaser's transfer of any or all of such Purchaser's
shares to the Company or to any other Purchaser.
(4) A Purchaser's transfer of any or all of such Purchaser's
shares to a person who, at the time of such transfer, is an officer or director
of the Company.
(5) A corporate Purchaser's transfer of any or all of its shares
pursuant to and in accordance with the terms of any merger, consolidation,
reclassification of shares or capital reorganization of the corporate Purchaser,
or pursuant to a sale of all or substantially all of the stock or assets of a
corporate Purchaser.
(6) A corporate Purchaser's transfer of any or all of its shares
to any or all of its shareholders.
(7) A transfer by a Purchaser which is a limited or general
partnership to any or all of its partners or former partners, or in the case of
Andersen Consulting, LLP, any entity within the Andersen Consulting worldwide
organization (i.e., any entity having a member firm interfirm agreement with
Arthur Andersen S.C. or any entity which controls, is controlled by, or is under
common control with any such entity having such an agreement).
In any such case, the transferee, assignee, or other recipient shall
receive and hold such stock subject to the provisions of this Section 3.4, and
there shall be no further transfer of such stock except in accord with this
Section 3.4.
(g) The provisions of this Section 3.4 may be waived with respect to
any transfer by the Company.
(h) Any sale or transfer, or purported sale or transfer, of securities
of the Company by a Purchaser shall be null and void unless the terms,
conditions and provisions of this Section 3.4 are strictly observed and
followed.
3.5 TERMINATION OF RIGHTS OF FIRST REFUSAL. The rights of first refusal
established by this Article III shall terminate upon the closing of the Initial
Offering.
3.6 TRANSFER OF RIGHTS OF FIRST REFUSAL. The rights of first refusal of
each Major Purchaser under this Article III may be transferred to any
constituent partner or affiliate of such Major Purchaser, to any successor in
interest to all or substantially all the assets of such Major Purchaser, or to
a transferee who acquires two hundred fifty thousand (250,000) shares of Series
B Preferred Stock or Common Stock issued upon conversion thereof.
3.7 EXCLUDED SECURITIES. The rights of first refusal established by
this Article III in favor of the Major Purchasers shall have no application to
any of the following Equity Securities:
3.7.1 shares of Common Stock (and/or options, warrants or other Common
Stock purchase rights issued pursuant to such options, warrants or other rights)
issued or to be issued to
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employees, officers or directors of, or consultants or advisors to the Company
or any subsidiary, pursuant to stock purchase or stock option plans or other
arrangements that are approved by the Board;
3.7.2 stock issued pursuant to any rights or agreements outstanding as
of the date of this Agreement, options and warrants outstanding as of the date
of this Agreement; and stock issued pursuant to any such rights or agreements
granted after the date of this Agreement, provided that the rights of first
refusal established by this Article III applied with respect to the initial sale
or grant by the Company of such rights or agreements;
3.7.3 any Equity Securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business
combination;
3.7.4 any Equity Securities that are issued by the Company as part of
an underwritten public offering referred to in Section 3.4 hereof;
3.7.5 shares of Common Stock issued in connection with any stock split,
stock dividend or recapitalization by the Company;
3.7.6 shares of Common Stock issued upon conversion of the Series A
Stock, Series B Stock and Series C Stock;
3.7.7 any Equity Securities issued pursuant to any equipment leasing
arrangement, corporate partnering transaction or bank financing, and
3.7.8 with respect to the Major Holders holding only Series C Stock,
Equity Securities issued and sold in exchange for an aggregate consideration of
$1,000,000 or less.
IV. MISCELLANEOUS.
4.1 AMENDMENT OF PRIOR AGREEMENT. Effective upon the execution of this
Agreement by the Company and the Holders of a majority of the outstanding
Registrable Securities issued under the Original Agreement, such agreement
shall be null and void and shall be superseded by the rights and obligations
set forth in this Agreement. Each Major Purchaser which was a party to the
Original Agreement hereby waives any right of first refusal under Article III
of the Original Agreement with respect to the issuance of the Series C Stock
and Common Stock issuable upon conversion thereof, including waiver of any
notice period.
4.2 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
4.3 SURVIVAL. The representations, warranties, covenants, and agreements
made herein shall survive any investigation made by any Holder and the closing
of the transactions contemplated hereby. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.
4.4 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and
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administrators of the parties hereto and shall inure to the benefit of and be
enforceable by each person who shall be a holder of Registrable Securities from
time to time; provided, however, that prior to the receipt by the Company of
adequate written notice of the transfer of any Registrable Securities
specifying the full name and address of the transferee, the Company may deem
and treat the person listed as the holder of such shares in its records as the
absolute owner and holder of such shares for all purposes, including the
payment of dividends or any redemption price.
4.5 SEPARABILITY. In case any provision of the Agreement shall be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
4.6 AMENDMENT AND WAIVER.
4.6.1 Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company and the holders
of at a majority of the Registrable Securities.
4.6.2 Except as otherwise expressly provided, the obligations of the
Company and the rights of the Holders under this Agreement may be waived only
with the written consent of the holders of at least a majority of the
Registrable Securities.
4.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character
on any Holder's part of any breach, default or noncompliance under the
Agreement or any waiver on such Holder's part of any provisions or conditions
of this Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to Holders, shall be cumulative and
not alternative.
4.8 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to
the party to be notified, (ii) when sent by confirmed telex or facsimile if
sent during normal business hours of the recipient; if not, then on the next
business day, (iii) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (iv) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall
be sent to the party to be notified at the address as set forth on the
signature page or the Schedule of Purchasers or at such other address as such
party may designate by ten (10) days advance written notice to the other
parties hereto.
4.9 TITLES AND SUBTITLES. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
4.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Restated
Investor Rights Agreement as of the date set forth in the first paragraph
hereof.
SIEBEL SYSTEMS, INC. THOMAS M. SIEBEL
By:
------------------------- -----------------------------------
Thomas M. Siebel Thomas M. Siebel
President
Address: Address:
4005 Bohannon Drive 4005 Bohannon Drive
Menlo Park, CA 94025 Menlo Park, CA 94025
PURCHASER
-----------------------------------
Print Name of Purchaser
By:
--------------------------------
Title:
-----------------------------
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RESTATED INVESTOR RIGHTS AGREEMENT
SCHEDULE OF PURCHASERS
ANDERSEN CONSULTING LLP
ADOBE VENTURES L.P.
IRWIN FEDERMAN TRUST
HAMBRECHT & QUIST, L.P.
CRISTINA M. MORGAN
JAMES A. DAVIDSON
WILLIAM R. TIMKEN
STANDISH H. O'GRADY, SOLE & SEPARATE PROPERTY
ANDREW J. FILIPOWSKI
THOMAS B. PETERS
BRUCE M. LUPATKIN
J. NEIL WEINTRAUT
DONALD T. VALENTINE, TRUSTEE OF THE DONALD T. VALENTINE FAMILY TRUST DATED
APRIL 1967, AS AMENDED
ALBERT GEORGE BATTLE
ROGER J. BAMFORD
HEATHER BEACH
RICHARD J. BEACH
MARC BENIOFF
DONALD BLAIR BRUSCO, TRUSTEE OF THE DONALD BLAIR BRUSCO AND DIANE IRIS BRUSCO
1981 TRUST, DATED 11/9/89
ROY BUKSTEIN AND KATHERINE BUKSTEIN, COMMUNITY PROPERTY
PEHONG CHEN AND ADELE W. CHI, TRUSTEES OF THE CHEN FAMILY TRUST
22
MICHAEL J. CORLEY AND LORI B. CORLEY, TRUSTEES OF THE CORLEY LIVING TRUST DATED
11/13/90
JOHN DAWSON
FREDERICK K. FLUEGEL
TERENCE J. GARNETT AND KATRINA S. GARNETT, JOINT TENANTS
GC&H INVESTMENTS
MARK D. HANSON
FREDERICK M. HOAR AND SHEILA J. HOAR, JOINT TENANTS
ITOCHU TECHNO-SCIENCE CORPORATION
ITOCHU CORPORATION
ITOCHU TECHNOLOGY, INC.
DAVID A. LEE
CHARLES R. SCHWAB
IGOR M. SILL
RICHARD E. STEINY AND LISA STEINY, TRUSTEES OF THE STEINY 1993 TRUST, DATED
5/18/93
CHRISTOPHER AND ELLEN GREENDALE