EXHIBIT 10.4
LEUCHEMIX, INC.
INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement (this "AGREEMENT") is made and entered
into as of October 1, 2004 (the "EFFECTIVE DATE"), by and among Leuchemix, Inc.,
a California corporation (the "COMPANY"), the holders of Common Stock set forth
on EXHIBIT A attached hereto (collectively, the "FOUNDERS"), and the undersigned
purchaser (the "INVESTOR") of Series A Preferred Stock (the "SECURITIES").
RECITALS
WHEREAS, in order to induce the Investor to invest in the Company
pursuant to that certain Series A Preferred Stock Purchase Agreement (the
"PURCHASE AGREEMENT"), the parties hereto desire to enter into this Agreement to
provide registration and other rights to the Investor.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises and covenants set forth herein, the parties hereby agree as
follows:
AGREEMENT
1. REGISTRATION RIGHTS.
1.1 DEFINITIONS. As used in this Agreement:
(a) "COMMISSION" shall mean the United States
Securities and Exchange Commission.
(b) "COMMON STOCK" shall mean the Company's Common
Stock.
(c) "EQUITY SECURITIES" shall mean (i) Common Stock,
rights, options or warrants to purchase Common Stock, (ii) any security other
than Common Stock having voting rights in the election of the Board of
Directors, not contingent upon a failure to pay dividends, (iii) any security
convertible into or exchangeable for any of the foregoing except that Equity
Securities shall not include the Series A Preferred Stock, and (iv) any
agreement or commitment to issue any of the foregoing.
(d) The term "FORM S-3" means such form under the
Securities Act as is in effect on the date hereof or any successor registration
form under the Securities Act subsequently adopted by the Commission (as defined
below) which permits inclusion or incorporation of substantial information by
reference to other documents filed by the Company with the Commission.
(e) The terms "HOLDER" or "HOLDERS" shall mean the
Investor so long as it holds Registrable Securities and any other person or
persons owning of record Registrable Securities to whom the registration rights
conferred by this Agreement have been duly assigned in accordance with this
Agreement; PROVIDED, HOWEVER, that for purposes of this Agreement, a record
holder of Securities convertible into such Registrable Securities shall be
deemed to be the Holder of such Registrable Securities; and PROVIDED, FURTHER,
that Holders of Registrable Securities will not be required to convert their
Securities into Common Stock in order to exercise the registration rights
granted hereunder, until immediately before the closing of the offering to which
the registration relates.
(f) "INITIAL PUBLIC OFFERING"shall mean the first
underwritten sale of the Company's Common Stock to the general public pursuant
to a registration statement under the Securities Act.
(g) "QUALIFIED EQUITY FINANCING" shall mean a bona
fide equity financing in a single transaction or series of related transactions
involving sales by the Company of its capital stock that result in gross
proceeds to the Company of at least Four Million Dollars ($4,000,000).
(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, and the
declaration or ordering of effectiveness of such registration statement.
(i) "REGISTRABLE SECURITIES" shall mean: (i) any and
all shares of the Common Stock issued or issuable upon the conversion of the
Securities and (ii) any shares of Common Stock 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, in exchange for or in
replacement of, all such shares of Common Stock described in clause (i) of this
subsection (b); provided, however, that Registrable Securities shall not include
any shares of Common Stock which have previously been registered or which have
been sold to the public either pursuant to a registration statement or Rule 144,
or which have been sold in a private transaction in which the transferor's
rights under this Agreement were not assigned.
(j) "REGISTRABLE SECURITIES THEN OUTSTANDING" shall
mean the number of shares of Common Stock which are Registrable Securities and
(1) are then issued and outstanding or (2) are then issuable pursuant to the
exercise or conversion of then outstanding and then exercisable options,
warrants or convertible securities.
(k) "RULE 144" shall mean Rule 144 as promulgated by
the Commission under the Securities Act, as such Rule may be amended from time
to time, or any similar successor rule that may be promulgated by the
Commission.
(l) "SECURITIES" shall mean the Company's Series A
Preferred Stock.
(m) "SECURITIES ACT" shall mean the Securities Act of
1933, as amended.
1.2 DEMAND REGISTRATION.
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(a) REQUEST BY HOLDERS. If the Company shall receive
from Holders (the "INITIATING HOLDERS") at any time or times not earlier than
one hundred and eighty (180) days after the effective date of the first
registration statement filed by the Company covering an underwritten offering of
any of its securities to the general public, a written request that the Company
effect any registration with respect to at least twenty-five percent (25%) of
the Registrable Securities Then Outstanding (or any lesser percentage if the
aggregate offering price exceeds Twenty-five Million Dollars ($25,000,000)),
then the Company shall, within ten (10) business days of the receipt thereof,
give written notice of such request to all Holders, and subject to the
limitations of this Section 1.2, effect, as soon as practicable, the
registration under the Securities Act of all Registrable Securities that the
Holders request be registered and included in such registration by written
notice given by such Holders to the Company within twenty (20) days after
receipt of the Request Notice, subject only to the limitations of this Section
1.2.
(b) EXCEPTIONS. Notwithstanding the foregoing,
Company shall not be obligated to effect, or to take any action to effect, any
such registration pursuant to this Section 1.2:
(i) during the period starting with the date
sixty (60) days prior to the Company's good faith estimate of the date of filing
of, and ending on a date one hundred eighty (180) days after the effective date
of a Company-initiated registration; provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective;
(ii) after the Company has initiated two (2)
such registrations pursuant to this Section 1.2 (counting for these purposes
only registrations which have been declared or ordered effective);
(iii) 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;
(iv) if the Initiating Holders propose to
dispose of Registrable Securities which may be immediately registered on Form
S-3 pursuant to a request made under Section 1.4 hereof;
(v) if the Initiating Holders do not request
that such offering be firmly underwritten by underwriters selected by the
Initiating Holders (subject to the consent of the Company, which consent will
not be unreasonably withheld); or
(vi) if the Company and the Initiating
Holders are unable to obtain the commitment of the underwriter described in
clause (v) above to firmly underwrite the offer.
(c) UNDERWRITING. The right of any Holder to include
his Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary form
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with the managing underwriter or underwriters selected for such underwriting by
the Company. Notwithstanding any other provision of this Section 1.2, if the
underwriter(s) advise(s) the Company in writing that marketing factors require a
limitation of the number of securities to be underwritten then the Company shall
so advise all Holders of Registrable Securities which would otherwise be
registered and underwritten pursuant hereto, and the number of Registrable
Securities that may be included in the underwriting shall be reduced as required
by the underwriter(s) and allocated among the Holders of Registrable Securities
on a pro rata basis according to the number of Registrable Securities then
outstanding held by each Holder requesting registration (including the
Initiating Holders); provided, however, that the number of shares of Registrable
Securities to be included in such underwriting and registration shall not be
reduced unless all other securities of the Company are first entirely excluded
from the underwriting and registration. Any Registrable Securities excluded and
withdrawn from such underwriting shall be withdrawn from the registration.
(d) DEFERRAL. Notwithstanding the foregoing, if the
Company shall furnish to Holders requesting the filing of a registration
statement pursuant to this Section 1.2, a certificate signed by the President or
Chief Executive Officer of the Company stating that, in the good faith judgment
of the Board of Directors of the Company, it would be seriously detrimental to
the Company and its shareholders for such registration statement to be filed and
it is therefore essential to defer the filing of such registration statement,
then the Company shall have the right to defer such filing for a period of not
more than one hundred twenty (120) days after receipt of the request of the
Initiating Holders; PROVIDED, HOWEVER, that the Company may not utilize this
right more than once in any twelve (12) month period.
(e) EXPENSES. All expenses incurred in connection
with a registration pursuant to this Section 1.2, including without limitation
all registration and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company and the reasonable fees and
disbursements of one (1) counsel for the selling Holder or Holders (but
excluding underwriters' and brokers' discounts and commissions), shall be borne
by the Company. Each Holder participating in a registration pursuant to this
Section 1.2 shall bear such Holder's proportionate share (based on the total
number of shares sold in such registration other than for the account of the
Company) of all discounts, commissions or other amounts payable to underwriters
or brokers in connection with such offering. Notwithstanding the foregoing, the
Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to this Section 1.2 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be registered; PROVIDED, FURTHER, HOWEVER, that if at
the time of such withdrawal, the Holders have learned of a material adverse
change in the condition, business or prospects of the Company not known to the
Holders at the time of their request for such registration and have withdrawn
their request for registration with reasonable promptness after learning of such
material adverse change, then the Holders shall not be required to pay any of
such expenses and shall retain their rights pursuant to this Section 1.2.
1.3 PIGGYBACK REGISTRATIONS. The Company shall notify all
Holders of Registrable Securities in writing at least fifteen (15) days prior to
filing any registration statement under the Securities Act for purposes of
effecting a public offering of securities of the Company (including, but not
limited to, registration statements relating to secondary offerings of
securities of the Company, but excluding registration statements relating to any
registration under Section 1.2 or Section 1.4 of this Agreement or to any
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employee benefit plan or a corporate reorganization) and will afford each such
Holder an opportunity to include in such registration statement all or any part
of the Registrable Securities then held by such Holder. Each Holder desiring to
include in any such registration statement all or any part of the Registrable
Securities held by such Holder shall, within twenty (20) days after receipt of
the above-described notice from the Company, so notify the Company in writing,
and in such notice shall inform the Company of the number of Registrable
Securities such Holder wishes to include in such registration statement. If a
Holder decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.
(a) UNDERWRITING. If a registration statement under
which the Company gives notice under this Section 1.3 is for an underwritten
offering, then the Company shall so advise the Holders of Registrable
Securities. In such event, the right of any such Holder's Registrable Securities
to be included in a registration pursuant to this Section 1.3 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting agreement
in customary form with the managing underwriter or underwriter(s) selected for
such underwriting. Notwithstanding any other provision of this Agreement, if the
managing underwriter(s) determine(s) in good faith that marketing factors
require a limitation of the number of shares to be underwritten, then the
managing underwriter(s) may exclude shares (including Registrable Securities)
from the registration and the underwriting, and the number of shares that may be
included in the registration and the underwriting shall be allocated, FIRST, to
the Company, and second, to each of the Holders requesting inclusion of their
Registrable Securities in such registration statement on a pro rata basis based
on the total number of Registrable Securities then held by each such Holder. If
any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw therefrom by written notice to the Company and the
underwriter, delivered at least ten (10) business days prior to the effective
date of the registration statement. Any Registrable Securities excluded or
withdrawn from such underwriting shall be excluded and withdrawn from the
registration. For any Holder which is a partnership or corporation, the
partners, retired partners and shareholders of such Holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single "Holder,"
and any pro rata reduction with respect to such "Holder" shall be based upon the
aggregate amount of shares carrying registration rights owned by all entities
and individuals included in such "Holder," as defined in this sentence.
(b) EXPENSES. All expenses incurred in connection
with a registration pursuant to this Section 1.3 (excluding underwriters' and
brokers' discounts and commissions), including, without limitation all federal
and "blue sky" registration and qualification fees, printers' and accounting
fees, fees and disbursements of counsel for the Company and the reasonable fees
and disbursements of one (1) counsel for the selling Holder or Holders shall be
borne by the Company. The Company and each Holder participating in a
registration pursuant to this Section 1.3 shall bear such Holder's proportionate
share (based on the total number of shares sold in such registration other than
for the account of the Company) of all discounts, commissions or other amounts
payable to underwriters or brokers in connection with such offering.
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(c) RIGHT TO TERMINATE REGISTRATION. The Company
shall have the right to terminate or withdraw any registration initiated by it
under this Section prior to the effectiveness of such registration whether or
not any Holder has elected to include securities in such registration. The
registration expenses of such withdrawn registration shall be borne by the
Company as defined above.
1.4 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, then the Company will:
(a) promptly give written notice of the proposed
registration and the Holder's or Holders' request therefor, and any related
qualification or compliance, to all other Holders of Registrable Securities; and
(b) as soon as practicable, effect such registration
and all such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written request
given within twenty (20) days after receipt of such written notice from the
Company; PROVIDED, HOWEVER, that the Company shall not be obligated to effect
any such registration, qualification or compliance pursuant to this Section 1.4:
(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 One Million Dollars
($1,000,000);
(iii) if the Company shall furnish to the
Holders a certificate signed by the President or Chief Executive Officer of the
Company stating that, in the good faith judgment of the Board of Directors of
the Company, it would be seriously detrimental to the Company and its
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 no more than once during any twelve (12) month period for
a period of not more than one hundred twenty (120) days following receipt of the
request of the Holder or Holders under this Section 1.4;
(iv) if the Company has, within the six (6)
month period preceding the date of such request, already effected one (1)
registration on Form S-3 for Holders pursuant to this Section 1.4; or
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(v) in any particular jurisdiction in which
the Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance.
(c) EXPENSES. Subject to the foregoing, the Company
shall file a Form S-3 registration statement covering the Registrable Securities
so requested to be registered pursuant to this Section 1.4 as soon as
practicable after receipt of the request(s) of the Holder(s) for such
registration. Except for the first registration pursuant to this Section 1.4,
the Holders who wish to participate in an S-3 registration shall pay all
expenses incurred in connection with each registration requested pursuant to
this Section 1.4, including without limitation all filing, registration and
qualification, printers' and accounting fees, fees and disbursements of counsel
for the Company and the reasonable fees and disbursements of one (1) counsel for
the selling Holder or Holders (the "FORM S-3 REGISTRATION EXPENSES"). For the
first such registration pursuant to this Section 1.4, the Company shall pay the
Form S-3 Registration Expenses (excluding underwriters' or brokers' discounts
and commissions).
(d) NOT DEMAND REGISTRATION. Form S-3 registrations
shall not be deemed to be demand registrations as described in Section 1.2
above.
1.5 OBLIGATIONS OF THE COMPANY. Whenever required to effect
the registration of any Registrable Securities under this Agreement, the Company
shall, as expeditiously as reasonably possible:
(a) prepare and file with the 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 with respect to a Form S-3 registration, keep such
registration statement effective for up to ninety (90) 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 number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them that are included in such registration;
(d) use its reasonable commercial efforts to register
and qualify the securities covered by such registration statement under such
other securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions;
(e) in the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter(s) of such offering (it being
understood and agreed that, as a condition to the Company's obligations under
this clause (e), each Holder participating in such underwriting shall also enter
into and perform its obligations under such an agreement);
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(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; and
(g) furnish, at the request of any Holder requesting
registration of Registrable Securities, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities are
being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated as of such date, of
the counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a
"comfort" letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities.
1.6 FURNISH INFORMATION. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to Sections 1.2, 1.3
or 1.4 hereof that the selling Holders shall furnish to the Company such
information regarding themselves, the Registrable Securities held by them and
the intended method of disposition of such securities as shall be required to
timely effect the registration of their Registrable Securities.
1.7 DELAY OF REGISTRATION. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
1.8 INDEMNIFICATION. In the event any Registrable Securities
are included in a registration statement under Sections 1.2, 1.3 or 1.4 hereof:
(a) BY THE COMPANY. To the extent permitted by law,
the Company will indemnify and hold harmless each Holder, the partners, officers
and directors of each Holder, any underwriter (as defined in the Securities Act)
for such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Securities Exchange Act of 1934,
as amended, (the "EXCHANGE ACT"), against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange 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"):
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(i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto;
(ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading; or
(iii) any violation or alleged violation by
the Company of the Securities Act, the Exchange Act, any federal or state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any federal or state securities law in connection with the
offering covered by such registration statement;
and the Company will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that the
indemnity agreement contained in this subsection 1.8(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any Holder, partner, officer, director, underwriter or
controlling person of any Holder.
(b) BY SELLING HOLDERS. To the extent permitted by
law, each selling Holder will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the registration statement,
each person, if any, who controls the Company within the meaning of the
Securities Act, any underwriter and any other Holder selling securities under
such registration statement or any of such other Holder's partners, directors or
officers or any person who controls such Holder within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such director,
officer, controlling person, underwriter or other such Holder, partner or
director, officer or controlling person of such other Holder may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly for
use in connection with such registration; and each such Holder will reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer, controlling person, underwriter or other Holder, partner,
officer, director or controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the indemnity agreement contained in this subsection
1.8(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; and PROVIDED
FURTHER, that the total amounts payable in indemnity by a Holder under this
Section 1.8(b) in respect of any Violation shall not exceed the net proceeds
received by such Holder in the registered offering out of which such Violation
arises.
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(c) NOTICE. Promptly after receipt by an indemnified
party under this Section 1.8 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section
1.8, deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; PROVIDED, HOWEVER, that an indemnified
party shall have the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be inappropriate
due to actual or potential conflict of interests between such indemnified party
and any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.8, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 1.8.
(d) DEFECT ELIMINATED IN FINAL PROSPECTUS. The
foregoing indemnity agreements of the Company and Holders are subject to the
condition that, insofar as they relate to any Violation made in a preliminary
prospectus but eliminated or remedied in the amended prospectus on file with the
Commission at the time the registration statement in question becomes effective
or the amended prospectus filed with the Commission pursuant to Commission Rule
424(b) (the "FINAL PROSPECTUS"), such indemnity agreement shall not inure to the
benefit of any person if a copy of the Final Prospectus (i) was furnished to the
indemnified party and (ii) was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
the Securities Act.
(e) CONTRIBUTION. In order to provide for just and
equitable contribution to joint liability under the Securities Act in any case
in which either (i) any Holder exercising rights under this Agreement, or any
controlling person of any such Holder, makes a claim for indemnification
pursuant to this Section 1.8 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 1.8 provides for indemnification in such case, or (ii) contribution
under the Securities Act may be required on the part of any such selling Holder
or any such controlling person in circumstances for which indemnification is
provided under this Section 1.8; then, and in each such case, the Company and
such Holder will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion so that such Holder is responsible for the portion represented
by the percentage that the public offering price of its Registrable Securities
offered by and sold under the registration statement bears to the public
offering price of all securities offered by and sold under such registration
statement, and the Company and other selling Holders are responsible for the
remaining portion; PROVIDED, HOWEVER, that, in any such case, (A) no such Holder
will be required to contribute any amount in excess of the public offering price
of all such Registrable Securities offered and sold by such Holder pursuant to
such registration statement and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.
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(f) SURVIVAL. The obligations of the Company and
Holders under this Section 1.8 shall survive the completion of any offering of
Registrable Securities in a registration statement, and otherwise.
1.9 "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees
that it shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell or otherwise transfer or dispose of or engage in
any other transaction regarding any Registrable Securities or other shares of
stock of the Company then owned by such Holder (other than to donees or partners
of the Holder who agree to be similarly bound) for up to one hundred eighty
(180) days following the effective date of a registration statement of the
Company filed under the Securities Act; provided, however, that all executive
officers, directors and five percent (5%) shareholders of the Company then
holding Common Stock of the Company enter into similar agreements.
In order to enforce the foregoing covenant, the Holder agrees to
execute the form of agreement requested by the Company and/or underwriter.
1.10 RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Registrable Securities to the public without
registration, after such time as a public market exists for the Common Stock of
the Company, the Company agrees to:
(a) make and keep public information available, as
those terms are understood and defined in Rule 144 under the Securities Act, at
all times after the effective date of the first registration under the
Securities Act filed by the Company for an offering of its securities to the
general public;
(b) use its best efforts to file with the Commission
in a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements); and
(c) as long as a Holder owns any Registrable
Securities, to furnish to the Holder forthwith upon request a written statement
by the Company as to its compliance with the reporting requirements of said Rule
144 (at any time after ninety (90) days after the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to the reporting requirements of the Exchange Act),
a copy of the most recent annual or quarterly report of the Company and such
other reports and documents of the Company as a Holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing a Holder to
sell any such securities without registration (at any time after the Company has
become subject to the reporting requirements of the Exchange Act).
1.11 TERMINATION OF THE COMPANY'S OBLIGATIONS. The Company
shall have no obligations pursuant to Sections 1.2, 1.3 and 1.4 with respect to:
(i) any request or requests for registration made by any Holder on a date more
than five (5) years after the closing date of the Initial Public Offering or
(ii) any Registrable Securities proposed to be sold by a Holder in a
11
registration pursuant to Section 1.2, 1.3 or 1.4 if, in the opinion of counsel
to the Company, all such Registrable Securities proposed to be sold by a Holder
may be sold in a three-month period without registration under the Securities
Act pursuant to Rule 144 under the Securities Act.
2. ASSIGNMENT.
2.1 ASSIGNMENT. Notwithstanding anything herein to the
contrary, the registration rights of a Holder under Section 1, the Right of
First Refusal under Section 3 and the information rights under Section 4 may be
assigned only to (i) a party who acquires at least five percent (5%) of the
total number of shares of Registrable Securities or (ii)(A) a shareholder,
partner, member, or beneficiary of such Holder; (B) a spouse, child, parent or
beneficiary of the estate of such Holder or (C) a trust for the benefit of the
persons set forth in (A) or (B); provided, however, that no party may assign any
of the foregoing rights unless the Company is given written notice by the
assigning party at the time of such assignment stating the name, address and tax
identification number of the assignee and identifying the securities of the
Company as to which the rights in question are being assigned; and provided
further that any such assignee shall receive such assigned rights subject to all
the terms and conditions of this Agreement, including without limitation the
provisions of this Section 2.
2.2 (a) CERTIFICATE. Each certificate representing Securities
or Registrable Securities shall (unless otherwise permitted by the provisions of
the agreement) be stamped or otherwise imprinted with a legend substantially
similar to the following (in addition to any legend required under applicable
state securities laws):
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, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
(b) REISSUANCE OF STOCK CERTIFICATE. 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.
(c) REMOVAL OF LEGEND. 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.
12
3. INVESTOR'S RIGHT OF FIRST REFUSAL.
3.1 If, at any time prior to the termination of this right of
first refusal pursuant to subsection 3.6, the Company should desire to issue in
a transaction not registered under the Securities Act in reliance upon a claimed
exemption thereunder, any Equity Securities (as hereinafter defined), it shall
give Investor the right to purchase Investor's pro rata share (or any part
thereof) of all of such privately offered Equity Securities on the same terms as
the Company is willing to sell such Equity Securities to any other person.
Investor's pro rata share of the Equity Securities shall be equal to that
percentage of the outstanding Common Stock of the Company held by Investor on
the date immediately prior to the transaction at issue. For purposes of
determining such pro rata share, the outstanding Common Stock of the Company
shall include (i) outstanding shares of Common Stock, and (ii) shares of Common
Stock issued or issuable upon exercise and/or conversion of any then outstanding
options, warrants and Preferred Stock of the Company and (iii) shares reserved
for employees pursuant to any stock grant, stock purchase and/or stock option
plans or any other stock incentive program, agreement or arrangement as
described in subsection 3.5 below less any outstanding options or shares issued
from such reserve.
3.2 Prior to any sale or issuance by the Company of any Equity
Securities, the Company shall notify Investor in writing of its intention to
sell and issue such securities, setting forth the terms under which it proposes
to make such sale. Within thirty (30) days after receipt of such notice,
Investor shall notify the Company whether Investor desires to purchase
Investor's pro rata share, or any part thereof, of the Equity Securities so
offered.
3.3 After termination of the thirty (30) day period specified
in subsection 3.2 above, the Company may, during a period of sixty (60) days
following the end of such thirty (30) day period, sell and issue such Equity
Securities as to which Investor does not indicate a desire to purchase to
another person as well as those additional shares of Equity Securities it
originally intended to issue to other persons, upon the same terms and
conditions as those set forth in the notice to the Investor. In the event the
Company has not sold the Equity Securities, or has not entered into an agreement
to sell the Equity Securities, within said sixty (60) day period, the Company
shall not thereafter issue or sell any Equity Securities without first offering
such securities to the Investor in the manner provided above.
3.4 If Investor gives the Company notice that Investor desires
to purchase any of the Equity Securities offered by the Company, payment for the
Equity Securities shall be by check or wire transfer, against delivery of the
Equity Securities at the executive offices of the Company within twenty (20)
days after giving the Company such notice, or, if later, the closing date for
the proposed sale of such Equity Securities. The Company shall take all such
action as may be required by any regulatory authority in connection with the
exercise by Investor of the right to purchase Equity Securities as set forth in
this Section 3.
3.5 The right of first refusal contained in this Section 3
shall not apply to the issuance by the Company of Equity Securities (i) to
employees, consultants, directors or officers of the Company pursuant to stock
grant, stock purchase and/or stock option plans or any other stock incentive
program, agreement or arrangement approved by the Board of Directors, (ii)
13
pursuant to the acquisition of another business entity or other business segment
of any such entity by the Company by merger, purchase of substantially all the
assets or other reorganization whereby the Company will own more than fifty
percent (50%) of the voting power of such business entity or business segment of
any such entity, (iii) in connection with a strategic investment or acquisition
of technology or intellectual property that is approved by the Board of
Directors, (iv) in connection with equipment financing or leasing arrangements
or in connection with strategic partnering transactions approved by the Board of
Directors, (v) issued upon conversion of shares of any Preferred Stock, or any
notes convertible into shares of the Company's capital stock, (vi) issued in
connection with any stock split, stock dividend, recapitalization or similar
event, (vii) issued in connection with an Initial Public Offering or (viii)
otherwise constituting securities which are not Additional Shares of Common
Stock (as defined in the Company's Amended and Restated Articles of
Incorporation as amended from time to time) or, if exercisable or convertible,
securities which are not exercisable or convertible for Additional Shares of
Common Stock.
3.6 The right of first refusal contained in this Section 3
shall terminate upon the closing of an Initial Public Offering. If Investor
fails to purchase all the Subsequent Shares at any Subsequent Closing (such
terms being defined in the Purchase Agreement), after having received written
notice and the opportunity to cure as set forth in Section 1.3 of the Purchase
Agreement, then the right of first refusal contained in this Section 3 shall
become null and void.
4. COVENANTS OF THE COMPANY.
4.1 FINANCIAL STATEMENTS AND REPORTS. So long as Investor
continues to hold any of the Securities or Registrable Securities, the Company
shall establish and maintain internal control policies and procedures that will
permit Investor to comply with the Sarbanes Oxley Act of 2002 (and related
authoritative pronouncements and guidelines) in all material respects, and that
will allow the Company to produce and report financial information in accordance
with GAAP, and Company agrees as follows:
(a) To deliver to Investor as soon as practicable
after the end of each fiscal year of the Company, and in any event within sixty
(60) 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, shareholders' equity and cash flows for such year, which
year-end financial reports shall be in reasonable detail prepared in accordance
with generally accepted accounting principles ("GAAP") and by an accounting firm
to be approved by Investor, which approval shall not be unreasonably withheld or
delayed;
(b) To deliver to Investor as soon as practicable
after the end of the first, second and third quarterly accounting periods in
each fiscal year of the Company and in any event within twenty (20) days
thereafter, an unaudited consolidated balance sheet of the Company and its
subsidiaries, if any, as of the end of each such quarterly period and unaudited
consolidated statements of income and cash flows of the Company and its
subsidiaries, if any, for such period and for the current fiscal year to date,
all prepared in accordance with GAAP, all in reasonable detail, subject to
changes resulting from year-end audit adjustments, and signed by the principal
financial or accounting officer of the Company;
14
(c) To deliver to Investor within thirty (30) days
prior to the end of each fiscal year, a budget and business plan for the next
fiscal year, prepared on a monthly basis, including a balance sheet and
statement of operations for such months and, as soon as prepared, any other
budgets or revised budgets prepared by the Company;
(d) Upon the reasonable request of Investor to submit
to any reasonable financial audit or inquiries requested by Investor in order to
enable Investor to reasonably comply with its regulatory financial reporting
obligations; and
(e) The Company's fiscal year shall correspond to the
calendar year.
Investor agrees to reimburse the Company for expenses in excess of
Forty Thousand Dollars ($40,000) incurred by the Company with respect to the
2005 and 2006 fiscal years in complying with its obligations under this Section
4.1. Thereafter and on an annual basis, Investor and the Company agree to
negotiate in good faith regarding the appropriate level of reimbursement, if
any, of such expenses by Investor, PROVIDED, HOWEVER, that Investor's
obligations described in the preceding sentence shall exist for each fiscal year
that Investor requests the Company to comply with the information requirements
of this Section 4.1.
Investor agrees that any information obtained by the Investor pursuant
to this Section 4 which is reasonably perceived to be proprietary to the Company
or otherwise confidential will not, unless Investor shall otherwise be required
by law or the rules of any national securities exchange or association, be
disclosed without the prior written consent of the Company. Investor further
acknowledges and understands that any information will not be utilized by the
Investor in connection with purchases and sales of the Company's securities
except in compliance with applicable state and federal antifraud statutes.
For so long as Investor is eligible to receive reports under this
Section 4, Investor shall have the right to visit and inspect the Company's
properties, to examine its books of account and records and to discuss the
affairs, finances and accounts of the Company with the Company's officers, all
at such reasonable times and as often as may be reasonably requested; provided,
however, that the Company shall not be obligated to provide any information that
it reasonably considers to be a trade secret or to contain confidential
information. Investor shall pay any expenses incurred by them in connection with
their discussions of the affairs, finances and accounts of the Company.
In the event of amendments or additions to the reporting requirements
under the Exchange Act (and related rules and regulations) or other similar
federal or state laws, the Company agrees to consent to reasonable amendments to
this Section 4.1 as to enable Investor to comply with such requirements.
4.2 BOARD OF DIRECTORS. At each election of directors of the
Company, the Investor and Founders hereby consent and agree to vote (in person,
by proxy or by written consent, as appropriate) in favor of the following
persons all shares of outstanding voting capital stock of the Company now held
or subsequently acquired by the Investors or Founders to elect: (i) one (1)
nominee by the holders of Series A Preferred Stock, voting as a separate class,
and (ii) up to four (4) nominees chosen by the holders of Common Stock and
Series A Preferred Stock, voting together as a single class. If any vacancy
shall occur on the Board of Directors, all parities hereto shall take all
15
necessary actions, including the holding of a meeting of the shareholders if
required, to insure that the composition of the Board of Directors remains as
set forth herein. Should the provisions of this Section 4.2 be construed to
constitute the granting of proxies, such proxies shall be deemed coupled with an
interest and are irrevocable for the term of the Agreement. The obligations set
forth in this Section 4.2 shall terminate upon the closing of an Initial Public
Offering.
4.3 STOCK VESTING. Unless otherwise approved by the Board of
Directors, all stock options and other stock equivalents issued after the date
of this Agreement to employees, directors, consultants and other service
providers shall be subject to vesting as follows: (a) twenty-five percent (25%)
of such stock shall vest at the end of the first year following such person's
services commencement date with the Company, and (b) seventy-five percent (75%)
of such stock shall vest on a monthly pro rata basis over the remaining three
(3) years. With respect to any shares of stock purchased by any such person, the
Company's repurchase option shall provide that upon such person's termination of
employment or service with the Company, with or without cause, the Company or
its assignee (to the extent permissible under applicable securities laws and
other laws) shall have the option to purchase at cost any unvested shares of
stock held by such person.
4.4 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. The
Company shall require all employees and officers to execute and deliver a
Proprietary Information and Inventions Assignment Agreement substantially in the
form or forms, which have been delivered to Investor.
4.5 TERMINATION OF COVENANTS. All covenants of the Company
contained in Section 4 of this Agreement shall expire and terminate upon the
earlier of (i) the effective date of the registration statement pertaining to
the Initial Public Offering; (ii) when the Company first becomes subject to the
periodic reporting requirements of Sections 12(g) or 15(d) of the 1934 Act;
(iii) the date on which this Agreement is terminated by a writing executed by
the Company, the holders of a majority of the shares of Series A Stock then
subject to this Agreement and the holders of a majority of the Common Stock then
subject to this Agreement; (iv) the dissolution of the Company; or (v) the
closing of an Acquisition (as defined in the Company's Amended and Restated
Articles of Incorporation as amended from time to time).
5. GENERAL PROVISIONS.
5.1 NOTICES. Any notice required or permitted to be given to a
party pursuant to the provisions of this Agreement will be in writing and will
be effective and deemed given to such party under this Agreement on the earliest
of the following:
(i) the date of personal delivery;
(ii) one (1) business day after transmission by
facsimile or telecopier, addressed to the other party at its facsimile number or
telecopier address specified herein (or hereafter noticed to the parties
hereto), with confirmation of transmission;
16
(iii) one (1) business day after deposit with a
return receipt express courier for United States deliveries, or three (3)
business days after such deposit for deliveries outside of the United States; or
(iv) three (3) business days after deposit in the
United States mail by registered or certified mail (return receipt requested)
for United States deliveries.
All notices not delivered personally or by facsimile will be sent with postage
and/or other charges prepaid and properly addressed to the party to be notified
at the address set forth below such party's signature on this Agreement, or at
such other address as such other party may designate by ten (10) days advance
written notice to the other parties hereto. All notices for delivery outside the
United States will be sent by facsimile or by express courier. Any notice given
hereunder to more than one person will be deemed to have been given, for
purposes of counting time periods hereunder, on the date effectively given to
the last party required to be given such notice. Notices to the Company will be
marked "Attention: President."
5.2 ENTIRE AGREEMENT. This Agreement, together with all the
exhibits hereto, constitutes and contains the entire agreement and understanding
of the parties with respect to the subject matter hereof and supersedes any and
all prior negotiations, correspondence, agreements, understandings, duties or
obligations between the parties respecting the subject matter hereof.
5.3 GOVERNING LAW. This Agreement shall be governed by and
construed exclusively in accordance with the internal laws of the State of
California as applied to agreements among California residents entered into and
to be performed entirely within California, excluding that body of law relating
to conflict of laws and choice of law.
5.4 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, then such provision(s) shall
be excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
5.5 THIRD PARTIES. Nothing in this Agreement, express or
implied, is intended to confer upon any person, other than the parties hereto
and their successors and assigns, any rights or remedies under or by reason of
this Agreement.
5.6 SUCCESSORS AND ASSIGNS. Subject to the provisions of
Section 2.1, the provisions of this Agreement shall inure to the benefit of, and
shall be binding upon, the successors and permitted assigns of the parties
hereto.
5.7 CAPTIONS. The captions to sections of this Agreement have
been inserted for identification and reference purposes only and shall not be
used to construe or interpret this Agreement.
5.8 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17
5.9 COSTS AND ATTORNEYS' FEES. In the event that any action,
suit or other proceeding is instituted concerning or arising out of this
Agreement or any transaction contemplated hereunder, the prevailing party shall
recover all of such party's costs and attorneys' fees incurred in each such
action, suit or other proceeding, including any and all appeals or petitions
therefrom.
5.10 ADJUSTMENTS FOR STOCK SPLITS AND CERTAIN OTHER CHANGES.
Wherever in this Agreement there is a reference to a specific number of shares
of Common Stock or Preferred Stock of the Company of any class or series, then,
upon the occurrence of any subdivision, combination or stock dividend of such
class or series of stock, the specific number of shares so referenced in this
Agreement shall automatically be proportionally adjusted to reflect the affect
on the outstanding shares of such class or series of stock by such subdivision,
combination or stock dividend.
5.11 AGGREGATION OF STOCK. All shares held or acquired by
affiliated entities or persons shall be aggregated together for the purpose of
determining the availability of any rights under this Agreement.
5.12 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.
5.13 AMENDMENT AND WAIVER. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company, the holders of a
majority of the Series A Stock then subject to this Agreement voting as a
separate class and the holders of a majority of the Common Stock then subject to
this Agreement voting as a separate class; PROVIDED, HOWEVER, that the consent
of the holders of the Series A Stock or Common Stock shall not be required for
(i) any amendment (other than an amendment (A) to Section 3 which provides the
holders of the Series A Stock with rights thereunder (I.E., as to a right of
first refusal) which are not substantially the same as, and are inferior to,
rights which are being provided to any purchaser of the Company's capital stock
in a Qualified Equity Financing or, if no such rights are granted to such
purchasers, which eliminates such rights of such holders, or (B) to this Section
5.13 (except where additional consent requirements - such as for holders of a
majority of shares of the Company's capital stock sold in a Qualified Equity
Financing - are being added)) that (x) is deemed by a resolution of the majority
of the Board of Directors of the Company to be necessary and appropriate in
connection with a future Qualified Equity Financing and (y) is effective only
upon the closing of such Qualified Equity Financing, or (ii) any amendment that
occurs following any failure by the Investor to purchase any shares of the
Series A Stock as and when contemplated by the Purchase Agreement, which failure
has not been cured within the period provided in Section 1.3 of the Purchase
Agreement. Any amendment or waiver effected in accordance with this Section 5.13
shall be binding upon each holder of any securities subject to this Agreement at
the time outstanding (including securities into which such securities have been
converted), each future holder of all such securities, and the Company.
18
5.14 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 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.
IN WITNESS WHEREOF, the parties hereto have executed this Investor
Rights Agreement as of the date and year first above written.
COMPANY: LEUCHEMIX, INC.
By: /S/ WILLIAM MATTHEWS
------------------------
Title: PRESIDENT
----------------------
Address: 1600 CANADA LANE
------------------------
WOODSIDE, CA 94062
------------------------
INVESTOR: COMBIMATRIX CORPORATION
/S/ AMIT KUMAR
----------------------------
By: Amit Kumar, CEO
CombiMatrix Corporation
6500 Harbour Heights Parkway, Ste. 110
Mukilteo, WA 98275
19
FOUNDERS:
/S/ JOHN BURKE
------------------------------
John Burke
Address: ADDRESS OMITTED
-------------------------
-------------------------
-------------------------
/S/ PETER CROOKS
------------------------------
Peter Crooks
Address: ADDRESS OMITTED
-------------------------
-------------------------
-------------------------
/S/ CINDY HAWKINS
------------------------------
Cindy Hawkins
Address: ADDRESS OMITTED
-------------------------
-------------------------
-------------------------
/S/ CHRISTOPHER HENNEY
------------------------------
Christopher Henney
Address: ADDRESS OMITTED
-------------------------
-------------------------
-------------------------
/S/ MIKE HIRD
------------------------------
Mike Hird
Address: ADDRESS OMITTED
-------------------------
-------------------------
-------------------------
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
20
/S/ CRAIG JORDAN
----------------------------------
Craig Jordan
Address: ADDRESS OMITTED
---------------------------
---------------------------
---------------------------
/S/ WILLIAM MATTHEWS
----------------------------------
William Matthews
Address: ADDRESS OMITTED
---------------------------
---------------------------
---------------------------
/S/ HARIKRISHNA NAKSHATRI
----------------------------------
Harikrishna Nakshatri
Address: ADDRESS OMITTED
---------------------------
---------------------------
---------------------------
/S/ CHRISTOPHER SWEENEY
----------------------------------
Christopher Sweeney
Address: ADDRESS OMITTED
---------------------------
---------------------------
---------------------------
/S/ ROGER WHITING
----------------------------------
Roger Whiting
Address: ADDRESS OMITTED
---------------------------
---------------------------
---------------------------
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
21
EXHIBIT A
---------
FOUNDERS
NAME SHARES OF COMMON STOCK
- ---- ----------------------
John Burke 25,000
Peter Crooks 1,000,000
Cindy Hawkins 25,000
Christopher Henney 100,000
Mike Hird 25,000
Craig Jordan 1,000,000
William Matthews 2,000,000
Harikrishna Nakshatri 1,000,000
Christopher Sweeney 1,000,000
Roger Whiting 100,000
TOTAL: 6,275,000
A-1