Registration Rights Agreement - 8x8 Inc., Chang Leekee Inc., Deby Investments Ltd., Luzon Investments Inc., ASCII Corp., Mitsui Comtek Corp., Yamaha Corp., National Semiconductor Corp. and Sanyo Semiconductor Corp.
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, (this
"Agreement") is made as of September 6, 1996 between 8x8, Inc., a California
corporation (the "Company"), certain purchasers of shares of Series A Preferred
Stock of the Company (the "Series A Purchasers") pursuant to the Series A
Preferred Stock Purchase Agreement dated as of April 24, 1987 (the "Series A
Agreement"), certain purchasers of shares of Series B Preferred Stock of the
Company (the "Series B Purchasers") pursuant to the Series B Preferred Stock
Purchase Agreement dated as of July 6, 1988 (the "Series B Agreement"), the
purchasers of shares of Series C Preferred Stock of the Company (the "Series C
Purchasers") pursuant to the Series C Preferred Stock Purchase Agreement of May
20, 1994 (the "Series C Agreement") the purchasers of shares of Series D
Preferred Stock of the Company (the "Series D Purchasers") pursuant to the
Series D Preferred Stock Purchase Agreement of September 3, 1996 (the "Series D
Agreement").
RECITALS
A. Pursuant to that certain Amended and Restated Registration Rights
Agreement dated as of May 20, 1994 (the "Registration Rights Agreement"), the
Series A Purchasers, Series B Purchasers and Series C Purchasers were granted
certain rights with respect to the registration of the Company's securities
under the Securities Act of 1933, as amended (the "Securities Act"), as set
forth in Section 1 of the Registration Rights Agreement.
B. The Company proposes to sell up to 2,370,000 shares of its Series D
Preferred Stock (the "Series D Preferred") pursuant to the Series D Agreement or
subsequent similar agreements.
C. The Company has requested, and the Series A Purchasers, Series B
Purchasers and Series C Purchasers have agreed, that the Registration Rights
Agreement be of no further force and effect, and that the rights granted to the
Series A Purchasers, Series B Purchasers and Series C Purchasers herein
supersede the rights granted in the Registration Rights Agreement.
D. Pursuant to Section 3.3 of the Registration Rights Agreement, the
holders of a majority of the shares of the Company's Series A Preferred Stock,
Series B Preferred Stock and Series C Purchasers subject to the Registration
Rights Agreement may amend the provisions of the Registration Rights Agreement
on behalf of all Series A Purchasers, Series B Purchasers and Series C
Purchasers.
NOW THEREFORE, the parties hereto agree as follows:
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SECTION 1
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES;
COMPLIANCE WITH SECURITIES ACT; REGISTRATION RIGHTS
1.1 CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"Conversion Stock" shall mean the Common Stock issued or
issuable pursuant to conversion of the Series A Preferred, Series B Preferred,
Series C Preferred and Series D Preferred.
"Holder" shall mean any Purchaser holding Registrable
Securities (including Preferred) and any person holding Registrable Securities
to whom the rights under this Section 1 have been transferred in accordance with
Section 1.14 hereof.
"Initiating Holders" shall mean any Purchaser or transferees
of any Purchaser under Section 1.14 hereof who in the aggregate are Holders of
greater than 50% of the Registrable Securities.
"Preferred" shall mean the Series A Preferred purchased
pursuant to the Series A Agreement, the Series B Preferred purchased pursuant to
the Series B Agreement, the Series C Preferred purchased pursuant to the Series
C Agreement and the Series D Preferred purchased pursuant to the Series D
Agreement.
"Purchaser" means any Series A Purchaser, Series B Purchaser,
Series C Purchaser or Series D Purchaser.
"Registrable Securities" shall mean (i) the Conversion Stock;
and (ii) any Common Stock of the Company issued or issuable in respect of the
Conversion Stock or other securities issued or issuable pursuant to the
conversion of the Preferred, upon any stock split, stock dividend,
recapitalization, or similar event, or any Common Stock otherwise issued or
issuable with respect to the Preferred, provided, however, that shares of Common
Stock or other securities shall no longer be treated as Registrable Securities
after (A) they have been sold to or through a broker or dealer or underwriter in
a public distribution or a public securities transaction, whether in a
registered offering, Rule 144 or otherwise, or (B) such securities are available
for sale, in the opinion of counsel to the Company, in a transaction exempt from
the registration and prospectus delivery requirements of the Securities Act so
that all transfer restrictions and restrictive legends with respect thereto are
removed upon the consummation of such sale, and the Holder is not an affiliate
of the Company.
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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 the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses, except as
otherwise stated below, incurred by the Company in complying with Sections 1.5,
1.6 and 1.7 hereof, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses, 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) and the reasonable fees and expenses of one
counsel for all Holders (in an amount not to exceed $15,000) in the event of the
exercise of any demand registration provided for in Section 1.5 hereof and in
the event of any Company registration pursuant to Section 1.6 hereof.
"Restricted Securities" shall mean the securities of the
Company required to bear the legend set forth in Section 1.3 hereof.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to the securities
registered by the Holders and, except as set forth above, all reasonable fees
and disbursements of counsel for any Holder.
1.2 RESTRICTIONS ON TRANSFERABILITY. The Preferred and the Conversion
Stock shall not be sold, assigned, transferred or pledged except upon the
conditions specified in this Section 1, which conditions are intended to ensure
compliance with the provisions of the Securities Act. Each Purchaser will cause
any proposed purchaser, assignee, transferee, or pledgee of the Preferred or
Conversion Stock held by a Purchaser to agree to take and hold such securities
subject to the provisions and upon the conditions specified in this Section 1.
1.3 RESTRICTIVE LEGEND. Each certificate representing (i) the
Preferred, (ii) the Conversion Stock and (iii) any other securities issued in
respect of the Preferred or the Conversion Stock upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event, shall
(unless otherwise permitted by the provisions of Section 1.4 below) be stamped
or otherwise imprinted with a legend in the following form (in addition to any
legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE
COMPANY RECEIVES AT ITS REQUEST AN OPINION
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OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE
OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SAID ACT. COPIES OF THE AGREEMENT
COVERING THE PURCHASE OF THESE SHARES AND RESTRICTING THEIR
TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY
THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF
THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
CORPORATION.
Each Purchaser and Holder consents to the Company making a
notation on its records and giving instructions to any transfer agent of the
Preferred or the Conversion Stock in order to implement the restrictions on
transfer established in this Section 1.
1.4 NOTICE OF PROPOSED TRANSFERS. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 1.4. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities (other than (i) a
transfer not involving a change in beneficial ownership or (ii) in transactions
involving the distribution without consideration of Restricted Securities by any
of the Purchasers to any of its partners, or retired partners, or to the estate
of any of its partners or retired partners), unless there is in effect a
registration statement under the Securities Act covering the proposed transfer,
the holder thereof shall give written notice to the Company of such holder's
intention to effect such transfer, sale, assignment or pledge. Each such notice
shall describe the manner and circumstances of the proposed transfer, sale,
assignment or pledge in sufficient detail, and, if requested by the Company,
shall be accompanied, at such holder's expense, by either (i) an unqualified
written opinion of legal counsel who shall be, and whose legal opinion shall be,
reasonably satisfactory to the Company addressed to the Company, to the effect
that the proposed transfer of the Restricted Securities may be effected without
registration under the Securities Act, or (ii) a "no action" letter from the
Commission to the effect that the transfer of such securities without
registration will not result in a recommendation by the staff of the Commission
that action be taken with respect thereto, whereupon the holder of such
Restricted Securities shall be entitled to transfer such Restricted Securities
in accordance with the terms of the notice delivered by the holder to the
Company. It is agreed that the Company will not request an opinion of counsel
for the Holder for transactions made in reliance on Rule 144 under the
Securities Act except in unusual circumstances, the existence of which shall be
determined in good faith by the Board of Directors of the Company. Each
certificate evidencing the Restricted Securities transferred as above provided
shall bear, except if such transfer is made pursuant to Rule 144, the
appropriate restrictive legend set forth in Section 1.3 above, except that such
certificate shall not bear such restrictive legend if in the opinion of counsel
for such holder and the Company such legend is not required in order to
establish compliance with any provision of the Securities Act.
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1.5 REQUESTED REGISTRATION.
(a) Request for Registration. In case, after the earlier to
occur of (x) September 1, 1997 or (y) the date six months after the closing of
the Company's initial public offering, the Company shall receive from Initiating
Holders a written request that the Company effect any registration,
qualification or compliance with respect to Registrable Securities, the Company
will:
(i) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(ii) as soon as practicable, use its best efforts to
effect such registration, qualification or compliance (including, without
limitation, appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act and any other governmental requirements or regulations)
as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are specified in
a written request received by the Company within 20 days after receipt of such
written notice from the Company;
Provided, however, that the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this Section 1.5:
(A) 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;
(B) During the period starting with the date
60 days prior to the Company's estimated date of filing of, and ending on the
date six months immediately following the effective date of, any registration
statement pertaining to securities of the Company (other than a registration of
securities in a Rule 145 transaction or with respect to an employee benefit
plan), provided that the Company is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective;
(C) Unless the Registrable Securities sought
to be registered by all Initiating Holders and Holders pursuant to this Section
1.5 comprises at least 25% of all their outstanding Registrable Securities,
except that such 25% requirement shall not apply if the anticipated aggregate
offering price, net of underwriting discounts and commissions, of all Registered
Securities sought to be registered by all Initiating Holders and other Holders
pursuant to this Section 1.5, would exceed $5,000,000;
(E) After the Company has effected two such
registrations pursuant to this subparagraph 1.5(a), and such registrations have
been declared or ordered effective;
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(F) If the Company shall furnish to such
Holders a certificate signed by the President of the Company stating that in the
good faith judgment of the Board of Directors it would be seriously detrimental
to the Company or its shareholders for a registration statement to be filed in
the near future, then the Company's obligation to use its best efforts to
register, qualify or comply under this Section 1.5 shall be deferred for a
period not to exceed 120 days from the date of receipt of written request from
the Initiating Holders; provided, however, that the Company shall not exercise
the right to defer registration granted pursuant to this paragraph (E) more than
one time in any twelve month period.
Subject to the foregoing clauses (A) through (E), the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Initiating Holders, but in any event within 120 days of such request or
requests.
(b) Underwriting. In the event that a registration pursuant to
Section 1.5 is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as part of the notice given pursuant to
Section 1.5(a)(i). In such event, the right of any Holder to registration
pursuant to Section 1.5 shall be conditioned upon such Holder's participation in
the underwriting arrangements required by this Section 1.5, and the inclusion of
such Holder's Registrable Securities in the underwriting to the extent requested
shall be limited to the extent provided herein.
The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting
by a majority in interest of the Initiating Holders, but subject to the
Company's reasonable approval. Notwithstanding any other provision of this
Section 1.5, if the managing underwriter advises the Initiating Holders in
writing that marketing factors require a limitation of the number of shares to
be underwritten, then the Company shall so advise all Holders of Registrable
Securities and the number of shares of Registrable Securities that may be
included in the registration and underwriting shall be allocated among all
Holders thereof in proportion, as nearly as practicable, to the respective
amounts of Registrable Securities held by such Holders at the time of filing the
registration statement. No Registrable Securities excluded from the underwriting
by reason of the underwriter's marketing limitation shall be included in such
registration. To facilitate the allocation of shares in accordance with the
above provisions, the Company or the underwriters may round the number of shares
allocated to any Holder to the nearest 100 shares.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the Initiating Holders. Any securities
excluded or withdrawn from such underwriting, in the event that such
underwriting represents the initial underwritten public offering of the
Company's securities, shall be withdrawn from such registration, and shall not
be transferred in a public distribution prior to 120 days after the effective
date of the registration statement relating thereto, or such other shorter
period of time as the underwriters may require.
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1.6 COMPANY REGISTRATION.
(a) Notice of Registration. If at any time or from time to
time the Company shall determine to register any of its securities, either for
its own account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans, or (ii) a registration
relating solely to a Commission Rule 145 transaction, the Company will:
(i) promptly give to each Holder written notice
thereof; and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within 20 days after receipt of such written notice from the
Company, by any Holder.
(b) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.6(a)(i). In such event the right of any Holder to
registration pursuant to Section 1.6 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and the other holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 1.6, if the managing
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the managing underwriter may limit the number of
Registrable Securities to be included in such registration and underwriting or
may exclude Registrable Securities entirely from such registration if the
registration is the first registered offering for the sale of the Company's
securities to the general public and thereafter may limit Registrable Securities
to not less than 20% of the registration. In such event, the Company shall
advise all Holders of Registrable Securities which would otherwise be registered
and underwritten pursuant hereto, and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated among all Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders. If any Holder
disapproves of the terms of any such underwriting, he may elect to withdraw
therefrom by written notice to the Company and the managing underwriter. Any
securities excluded or withdrawn from such underwriting shall be withdrawn from
such registration, and shall not be transferred in a public distribution prior
to 120 days after the effective date of the registration statement relating
thereto, or such other shorter period of time as the underwriters may require.
(c) Right to Terminate Registration. The Company shall have
the right to terminate or withdraw any registration initiated by it under this
Section 1.6 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration.
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1.7 REGISTRATION ON FORM S-3.
(a) Subject to the remainder of this Section 1, and unless
Rule 144 is available for effecting the proposed transfer, in the event that the
Company receives from the Holders a written request that the Company file a
registration statement on Form S-3 (or any successor form to Form S-3) for a
public offering of shares of the Registrable Securities the reasonably
anticipated aggregate price to the public of which, would exceed $1,000,000 and
the Company is a registrant entitled to use Form S-3 to register the Registrable
Securities for such an offering, the Company shall: (i) promptly give written
notice of the proposed registration to all other Holders of Registrable
Securities and (ii) use its best efforts to cause, as soon as practicable, all
Registrable Securities to be registered as may be so requested for the offering
on such form and to cause such Registrable Securities to be qualified in such
jurisdictions as the Holder or Holders may reasonably request; provided,
however, that the Company shall not be required to effect more than three
registrations pursuant to this Section 1.7. The substantive provisions of
Section 1.5(b) shall be applicable to each registration initiated under this
Section 1.7.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action pursuant to this Section 1.7: (i) in any particular
jurisdiction in which the Company would be required to execute a general consent
to service of process in effecting such registration, qualification or
compliance unless the Company is already subject to service in such jurisdiction
and except as may be required by the Securities Act; or (ii) if the Company
shall furnish to such Holder a certificate signed by the President of the
Company stating that in the good faith judgment of the Board of Directors it
would be seriously detrimental to the Company or its shareholders for
registration statements to be filed in the near future, then the Company's
obligation to use its best efforts to file a registration statement shall be
deferred for a period not to exceed 120 days from the receipt of the request to
file such registration by such Holder, provided, however, that the Company shall
not exercise the right to defer registration granted by this subparagraph
(b)(ii) more than once in any twelve month period.
1.8 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
Closing Date, the Company shall not enter into any agreement granting any holder
or prospective holder of any securities of the Company registration rights with
respect to such securities unless (i) such new registration rights, including
standoff obligations, are on a pari passu basis with those rights of the Holders
hereunder, or (ii) such new registration rights, including standoff obligations,
are subordinate to the registration rights granted Holders hereunder.
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1.9 EXPENSES OF REGISTRATION.
(a) All Registration Expenses incurred in connection with all
registrations pursuant to Sections 1.5 and 1.6, shall be borne by the Company.
Unless otherwise stated, all Selling Expenses relating to securities registered
on behalf of the Holders and all other Registration Expenses shall be borne by
the Holders of such securities pro rata on the basis of the number of shares so
registered.
(b) All Registration Expenses and Selling Expenses incurred in
connection with a registration pursuant to Section 1.7 shall be borne pro rata
by the Holder or Holders requesting the registration on Form S-3 according to
the number of Registrable Securities included in such registration.
1.10 REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Section 1,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will with all deliberate speed:
(a) Prepare and file with the Commission a registration
statement with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for at least 180 days or
until the distribution described in the Registration Statement has been
completed;
(b) Furnish to the Holders participating in such registration
and to the underwriters of the securities being registered such reasonable
number of copies of the registration statement, preliminary prospectus, final
prospectus and such other documents as such underwriters may reasonably request
in order to facilitate the public offering of such securities;
(c) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statements 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;
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions; and
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
1.11 INDEMNIFICATION.
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(a) The Company will indemnify each Holder, each of its
officers and directors and partners, and each person controlling such Holder
within the meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this
Section 1, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, or any violation by the Company of the Securities Act or any
rule or regulation promulgated under the Securities Act applicable to the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse each such Holder, each of its officers and
directors, and each person controlling such Holder, each such underwriter and
each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission or alleged untrue statement or omission, made in reliance
upon and in conformity with written information furnished to the Company by an
instrument duly executed by such Holder, controlling person or underwriter and
stated to be specifically for use therein.
(b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers, directors and
partners and each person controlling such Holder within the meaning of Section
15 of the Securities Act, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company, such Holders, such directors, officers, partners,
persons, underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder and stated to be specifically for use therein.
(c) Each party entitled to indemnification under this Section
1.11 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
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sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 1.11 unless the failure
to give such notice is materially prejudicial to an Indemnifying Party's ability
to defend such action and provided further, that the Indemnifying Party shall
not assume the defense for matters as to which there is a conflict of interest
or separate and different defenses. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. No Indemnifying Party shall be liable for
indemnification hereunder with respect to any settlement or consent to judgment,
in connection with any claim or litigation to which these indemnification
provisions apply, that has been entered into without the prior consent of the
Indemnifying Party (which consent will not be unreasonably withheld).
1.12 INFORMATION BY HOLDER. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held by
them and the distribution proposed by such Holder or Holders as the Company may
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Section 1.
1.13 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 Restricted 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 use its best efforts 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 that the Company becomes subject to the reporting
requirements of the Securities Act or the Securities Exchange Act of 1934, as
amended.
(b) File with the Commission in a timely manner all reports
and other documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934, as amended (at any time after it has become
subject to such reporting requirements);
(c) So long as a Purchaser owns any Restricted Securities to
furnish to the Purchaser 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 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 Securities Exchange Act of 1934 (at
any time after it has become subject to such reporting requirements), a copy of
the most recent annual or quarterly report of the Company, and such other
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reports and documents of the Company and other information in the possession of
or reasonably obtainable by the Company as a Purchaser may reasonably request in
availing itself of any rule or regulation of the Commission allowing a Purchaser
to sell any such securities without registration.
1.14 TRANSFER OF REGISTRATION RIGHTS. The rights to cause the Company
to register securities granted Purchasers under Sections 1.5, 1.6 and 1.7 may be
assigned (i) in connection with transactions involving the distribution without
consideration of Registrable Securities by any of the Purchasers to any of its
partners or retired partners or the estate of any of its partners or retired
partners, or (ii) to a transferee or assignee reasonably acceptable to the
Company in connection with any transfer or assignment of Registrable Securities
by a Purchaser, provided that (a) such transfer may otherwise be effected in
accordance with applicable securities laws, (b) such assignee or transferee
acquires at least 50,000 of the Registrable Securities and (c) the Company
receives reasonably prompt written notice of such transfer or assignment.
1.15 STANDOFF AGREEMENT. Each Holder agrees in connection with the
Company's initial public offering of the Company's securities that, upon request
of the Company or the underwriters managing any underwritten offering of the
Company's securities, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any Registrable Securities
(other than those included in the registration) without the prior written
consent of the Company or such underwriters, as the case may be, for such period
of time (not to exceed 180 days) from the effective date of such registration as
may be requested by the underwriters; provided, that the officers and directors
of the Company who own stock of the Company also agree to such restrictions with
respect to all of their shares.
1.16 TERMINATION OF REGISTRATION RIGHTS. The registration rights
granted pursuant to Section 1 shall terminate as to each Holder at such time as
a public market for the Company's Common Stock exists and all Registrable
Securities held by such Holder may, in the opinion of counsel to the Company
(which opinion shall be concurred in by counsel for such Holder), be sold within
a given three month period pursuant to Rule 144 or any other applicable
exemption that allows for resale free of registration. The registration rights
granted pursuant to Section 1 shall terminate as to all Holders on the fifth
anniversary of the closing of the Company's initial public offering.
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<PAGE> 13
SECTION 2
WAIVER OF RIGHTS
In consideration of the rights granted herein, the registration rights
granted to the Series A Purchasers, Series B Purchasers and Series C Purchasers
pursuant to Section 1 of the Registration Rights Agreement are amended in full
to read as set forth in this Agreement, and the Registration Rights Agreement is
null and void and of no further force and effect.
SECTION 3
MISCELLANEOUS
3.1 GOVERNING LAW. This Agreement shall be governed in all respects by
the internal laws of the State of California.
3.2 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
3.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subjects hereof and thereof. Neither this Agreement nor any term hereof may be
amended, waived, discharged, or terminated other than by a written instrument
signed by the Company and the holders of a majority of the Registrable
Securities (as defined with respect to the section of the Agreement to be
amended); provided that any amendment, waiver, discharge or termination that
adversely affects one series of the Preferred in a manner in which each other
series of Preferred is not equally affected, than such written instrument must
be signed by the holder of a majority of such series of Preferred adversely
affected. The parties hereto consent to the addition as parties of additional
purchasers to this agreement of up to an aggregate of 2,370,000 shares of Series
D Preferred that purchase such shares in accordance with the terms of the Series
D Agreement; provided that such additional purchasers execute a counterpart
signature page hereto.
3.4 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed (a) if to a Holder, to the address of such Holder as set forth on the
records of the Company, or to such address as such Holder shall have furnished
to the Company in writing, or, until any such Holder so furnishes an address to
the Company, then to the address of the last holder of such Registrable
Securities who has so furnished an address to the Company, or (b) if to the
Company, one copy should be sent to 2445 Mission College Blvd., Santa Clara,
California 95054 and addressed to the attention of the Corporate Secretary, or
at such other address as the Company shall have furnished to the Holders.
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<PAGE> 14
3.5 DELAYS OR OMISSIONS. Except as expressly provided herein, no delay
or omission to exercise any right, power, or remedy accruing to any Holder, upon
any breach or default of the Company under this Agreement, shall impair any such
right, power, or remedy of such Holder nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, as of or in any
similar breach or default therein occurring, nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any Holder of any breach or default under this
Agreement, or any waiver on the part of any Holder 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 or by law or otherwise afforded to any Holder, shall be
cumulative and not alternative.
3.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the Holders,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
3.7 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.
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<PAGE> 15
The foregoing agreement is hereby executed as of the date first above
written.
8x8, INC.
By: ________________________________
Joe Parkinson, President
SERIES A PURCHASERS
CHANG LEEKEE, INC.
By: ________________________________
Title:______________________________
DEBY INVESTMENTS, LTD.
By: ________________________________
Title:______________________________
LUZON INVESTMENTS, INC.
By: ________________________________
Title:______________________________
SERIES B PURCHASERS
ASCII CORPORATION
By: ________________________________
Title:______________________________
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<PAGE> 16
MITSUI COMTEK CORP.
By: ________________________________
Title:______________________________
YAMAHA CORPORATION
By: ________________________________
Title:______________________________
SERIES C PURCHASERS
NATIONAL SEMICONDUCTOR
CORPORATION
By: ________________________________
Title:______________________________
SERIES D PURCHASERS
SANYO SEMICONDUCTOR
CORPORATION
By: ________________________________
Title:______________________________
PRINT NAME:_________________________
By: ________________________________
Title (if applicable):______________
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