Rights Agreement - @Road Inc. and Rod Fan
@ROAD, INC.
AMENDED AND RESTATED RIGHTS AGREEMENT
First Closing:
December 17, 1999
Second Closing:
January 6, 2000
Third Closing:
January 28, 2000
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@ROAD, INC.
AMENDED AND RESTATED RIGHTS AGREEMENT
This Amended and Restated Rights Agreement (the "Agreement") is made and
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entered into as of December 17, 1999, by and among @Road, Inc., a California
corporation (the "Company"), Rod Fan (the "Founder") and the investors
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identified on Exhibit A attached hereto (the "Investors").
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RECITALS
WHEREAS, the Founder has purchased shares of the Company's Common Stock
pursuant to a Common Stock Purchase Agreement, dated July 15, 1994 (the
"Founder's Shares");
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WHEREAS, the Company and certain of the Investors have entered into a
Series A Preferred Stock Purchase Agreement dated July 15, 1996 (the "Series A
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Purchase Agreement"), pursuant to which the Company sold, and such Investors
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acquired, shares of the Company's Series A Preferred Stock (the "Series A
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Shares");
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WHEREAS, the Company and certain of the Investors have entered into a
Series B Preferred Stock Purchase Agreement dated September 15, 1998 (the
"Series B Purchase Agreement"), pursuant to which the Company sold, and such
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Investors acquired, shares of the Company's Series B Preferred Stock (the
"Series B Shares");
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WHEREAS, the Company and certain of the Investors have entered into a
Series C Preferred Stock Purchase Agreement dated June 18, 1998 (the "Series C
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Purchase Agreement"), pursuant to which the Company sold, and such Investors
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acquired, shares of the Company's Series C Preferred Stock (the "Series C
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Shares");
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WHEREAS, the Company and the Investors are entering into a Series D
Preferred Stock Purchase Agreement of even date herewith (the "Series D Purchase
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Agreement"), pursuant to which the Company shall sell, and the Investors shall
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acquire, shares of the Company's Series D Preferred Stock (the "Series D
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Shares"); and
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WHEREAS, the Company and certain of the Investors have entered into an
Amended and Restated Rights Agreement (the "Existing Rights Agreement") dated
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June 18, 1999;
WHEREAS, the Company and certain of the Investors wish to amend and restate
the Existing Rights Agreement in its entirety as set forth below and grant the
Investors and the Founder the registration rights, information rights and other
rights provided herein, subject to execution of this agreement by such
Investors;
<PAGE>
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties agree as follows:
Section 1. Termination of Prior Rights. Upon execution of this Agreement
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by the Company and the holders of at least sixty percent (60%) of the
outstanding Registrable Securities (as defined in the Existing Rights
Agreement), the Existing Rights Agreement is hereby amended and restated in its
entirety pursuant to Section 2 of the Existing Rights Agreement to read as set
forth in this Agreement, and the Investors hereby waive any further rights
(including without limitation, the Right of First Offer in Section 4.4 of the
Existing Rights Agreement and all related notice requirements relating to (A)
the issuance of Series D Preferred Stock to the Investors acquiring Series D
Preferred Stock or (B) the issuance of capital stock or options pursuant to
Section 4.4(d)(i)) under the Existing Rights Agreement, whether accrued before
or after the date hereof.
Section 2. Amendment. Except as expressly provided herein, neither this
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Agreement nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against whom enforcement
of any such amendment, waiver, discharge or termination is sought; provided,
however, that any provision hereof may be amended, waived, discharged or
terminated upon the written consent of (a) the Company, and (b) the holders of
sixty percent (60%) of the outstanding Registrable Securities (as defined
below), not including the Founder's Stock, as determined on the basis of assumed
conversion of all Series A, Series B, Series C, and Series D Shares into
Registrable Securities; provided that if such amendment has the effect of
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affecting the Founder's Stock (i) in a manner different than securities issued
to the Investors and (ii) in a manner adverse to the interests of the holder of
the Founder's Stock, then such amendment shall require the consent of the holder
of a majority of the Founder's Stock.
Section 3. Registration Rights.
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3.1 Definitions. As used in this Agreement:
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(a) The terms "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "Act"), and the
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subsequent declaration or ordering of the effectiveness of such registration
statement.
(b) The term "Registrable Securities" means:
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(i) the Founder's Shares; provided, however, that for the
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purposes of Section 3.2 or 3.12, the Founder's Stock shall not be deemed
Registrable Securities and the Founders shall not be deemed a Holder, as defined
below;
(ii) the shares of Common Stock issuable or issued upon
conversion of the Series A, Series B, Series C, and Series D Shares (the shares
of Common Stock referred to in clauses (i), (ii) and (iii) hereof are
collectively referred to hereafter as the "Stock"); and
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(iii) any other shares of Common Stock of the Company issued
as (or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, the Stock, excluding in all cases,
however, any Registrable Securities sold by a person in a transaction in which
his or her rights under this Agreement are not assigned;
provided, however, that Common Stock or other securities shall only be treated
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as Registrable Securities if and so long as they have not been (A) sold to or
through a broker or dealer or underwriter in a public distribution or a public
securities transaction, or (B) sold in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Section 4(1) thereof so that all transfer restrictions, and restrictive legends
with respect thereto, if any, are removed upon the consummation of such sale.
(c) The number of shares of "Registrable Securities then
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outstanding" shall be determined by the number of shares of Common Stock
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outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities.
(d) The term "Holder" means any holder of outstanding Registrable
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Securities who acquired such Registrable Securities in a transaction or series
of transactions not involving any registered public offering.
(e) The term "Form S-3" means such form under the Act as in
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effect on the date hereof or any registration form under the Act subsequently
adopted by the Securities and Exchange Commission ("SEC") which permits
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inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
3.2 Requested Registration.
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(a) If the Company receives at any time after the earlier of (i)
three (3) years after the date hereof, or (ii) six (6) months after the
effective date of the first registration statement for a public offering of
securities of the Company (other than a registration statement relating either
to the sale of securities to employees of the Company pursuant to a stock
option, stock purchase or similar plan or a SEC Rule 145 transaction), a written
request from the Holders of a majority of the Registrable Securities then
outstanding that the Company file a registration statement under the Act
covering the registration of at least thirty percent (30%) of the Registrable
Securities then outstanding (or a lesser percent if the anticipated aggregate
offering price, net of underwriting discounts and commissions, would exceed
$10,000,000), then the Company shall, within ten (10) days of the receipt
thereof, give written notice of such request to all Holders and shall, subject
to the limitations of subsection 3.2(b), use its best efforts to effect as soon
as practicable, and in any event within ninety (90) days of the receipt of such
request, the registration under the Act of all Registrable Securities which the
Holders request to be registered in a written request given within twenty (20)
days of the mailing of such notice by the Company in accordance with Section
5.5.
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(b) If the Holders initiating the registration request hereunder
("Initiating Holders") intend to distribute the Registrable Securities covered
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by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to this Section 3.2 and the Company
shall include such information in the written notice referred to in subsection
3.2(a). In such event, 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 (together with the Company as provided in subsection
3.4(e)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holders. Notwithstanding any other provision of this
Section 3.2, if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder and the securities of
all other shareholders and the Company are excluded entirely.
(c) In addition, the Company shall not be obligated to effect, or
to take any action to effect, any registration pursuant to this Section 3.2:
(i) After the Company has effected two (2) registrations
pursuant to this Section 3.2 and such registrations have been declared or
ordered effective;
(ii) 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
registration subject to Section 3.3 hereof; provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective;
(iii) If the Initiating Holders propose to dispose of shares
of Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 3.12 below; or
(iv) If the registration request is subsequently withdrawn
at the request of the Holders of a majority of the Registrable Securities to be
registered.
(d) Notwithstanding the foregoing, if the Company shall furnish
to Holders requesting a registration statement pursuant to this Section 3.2, a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer such filing
for a period of not
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more than ninety (90) 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.
3.3 Company Registration. If (but without any obligation to do so)
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the Company proposes to register (including for this purpose a registration
effected by the Company for shareholders other than the Holders) any of its
Common Stock or other securities under the Act in connection with the public
offering of such securities solely for cash (other than a registration relating
either to the sale of securities to participants in a Company stock option,
stock purchase or similar plan or to a SEC Rule 145 transaction, or a
registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities), the Company shall, at such
time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder given within twenty (20) days after mailing of
such notice by the Company in accordance with Section 5.5, the Company shall,
subject to the provisions of Section 3.8, use its best efforts to cause to be
registered under the Act all of the Registrable Securities that each such Holder
has requested to be registered. 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.
3.4 Obligations of the Company. Whenever required under this Section
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3 to effect the registration of any Registrable Securities, the Company shall,
as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.
(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
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connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(g) Furnish, at the request of any Holder requesting registration
of Registrable Securities pursuant to this Section 3, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Section 3, 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 such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities and (ii) a letter
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters and reasonably satisfactory to a majority in interest of the
Holders requesting registration, if any, and to the Holders requesting
registration of Registrable Securities.
3.5 Furnish Information. It shall be a condition precedent to the
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obligations of the Company to take any action pursuant to this Section 3 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
3.6 Expenses of Demand Registration. All expenses (other than
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underwriting discounts and commissions) incurred in connection with
registrations, filings or qualifications pursuant to Section 3.2, including
(without limitation), all registration, filing and qualification fees, printers
and accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one special counsel for the selling
Holders, shall be borne by the Company; provided, however, that the Company
shall not be required to pay for any expenses of any registration proceeding
begun pursuant to Section 3.2 if
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the registration request is subsequently withdrawn at the request of the Holders
of a majority of the Registrable Securities to be registered (in which case all
participating Holders shall bear such expenses), unless the Holders of a
majority of the Registrable Securities agree to forfeit their right to one
demand registration pursuant to Section 3.2; 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 from that known
to the Holders at the time of their request, then the Holders shall not be
required to pay any of such expenses and shall retain their rights pursuant to
Section 3.2.
3.7 Expenses of Company Registration. The Company shall bear and pay
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all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 3.3 for each Holder (which right may be assigned as provided
in Section 3.13), including (without limitation) all registration, filing, and
qualification fees, printers and accounting fees, fees and disbursements of
counsel for the Company, and the reasonable fees and disbursements of one
special counsel for the selling Holders, relating or apportionable thereto, but
excluding underwriting discounts and commissions relating to Registrable
Securities.
3.8 Underwriting Requirements. In connection with any offering
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involving an underwriting of shares being issued by the Company, the Company
shall not be required under Section 3.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it, and then
only in such quantity as will not, in the opinion of the underwriters,
jeopardize the success of the offering by the Company. Notwithstanding any
other provision of the Agreement, if the underwriter determines in good faith
that marketing factors require a limitation of the number of shares to be
underwritten, the number of shares that may be included in the underwriting
shall be allocated, first, to the Company; second, to the Holders on a pro rata
basis based on the total number of Registrable Securities held by the Holders;
and third, to any shareholder of the Company (other than a Holder) on a pro rata
basis. No such reduction shall (i) reduce the securities being offered by the
Company for its own account to be included in the registration and underwriting,
or (ii) reduce the amount of securities of the selling Holders included in the
registration below twenty percent (20%) of the total amount of securities
included in such registration, unless such offering is an initial offering and
such registration does not include shares of any other selling shareholders, in
which event any or all of the Registrable Securities of the Holders may be
excluded in accordance with the immediately preceding sentence, nor shall (iii)
any securities held by the Founder be included if any securities held by any
selling Holder are excluded. For purposes of the preceding provisions
concerning apportionment, for any selling shareholder which is a holder of
Registrable Securities and 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 "selling
shareholder," and any pro rata reduction with respect to such "selling
shareholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling shareholder," as defined in this sentence.
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3.9 Delay of Registration. No Holder shall have any right to obtain
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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 3.
3.10 Indemnification. In the event any Registrable Securities are
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included in a registration statement under this Section 3:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the Securities Exchange Act of 1934, as amended (the
"1934 Act"), against any losses, claims, damages, or liabilities (joint or
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several) to which they may become subject under the Act, the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively a "Violation"): (i)
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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 Act, the 1934
Act, any state securities law or any rule or regulation promulgated under the
Act, the 1934 Act or any state securities law; and the Company will pay as
incurred to each such Holder, underwriter or controlling person, any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage, liability, or action arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company by
such Holder or underwriter and stated to be specifically for use therein; and
provided further that the indemnity agreement contained in this subsection
3.10(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 to a Holder, underwriter or controlling
person for any such loss, claim, damage, liability, or action to the extent that
it arises out of or is based upon a Violation which occurs in reliance upon and
in conformity with written information furnished expressly for use in connection
with such registration by such Holder, underwriter or controlling person.
(b) 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 has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case
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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 pay, as incurred, any legal or other expenses reasonably incurred by any
person intended to be indemnified pursuant to this subsection 3.10(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 3.10(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; provided that in no event shall any indemnity under this subsection
3.10(b) exceed the net proceeds received by such Holder in the offering in which
such Violation arises.
(c) Promptly after receipt by an indemnified party under this
Section 3.10 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 3.10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 3.10, 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
3.10.
(d) If the indemnification provided for in this Section 3.10 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations, provided, that in no event shall any contribution by a selling
Holder under this Subsection 3.10(d) exceed the net proceeds from the offering
received by such selling Holder, except in the case of willful misconduct or
fraud by such Holder. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and
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opportunity to correct or prevent such statement or omission and 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.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Holders under this Section
3.10 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 3, and otherwise.
3.11 Reports Under Securities Exchange Act of 1934. With a view to
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making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;
(b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the 1934 Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as practicable after the end of the fiscal year in
which the first registration statement filed by the Company for the offering of
its securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
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3.12 Form S-3 Registration. In case the Company shall receive from
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any Holder or Holders a written request or requests that the Company effect a
registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, the Company will:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders; 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
fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 3.12, (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 (net of any
underwriters' discounts or commissions) of less than $1,000,000; (iii) if the
Company shall furnish to the Holders a certificate signed by the president of
the Company stating that in the good faith judgment of the Board of Directors of
the Company it would be seriously detrimental to the Company and its
shareholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than ninety (90) days after
receipt of the request of the Holder or Holders under this Section 3.12;
provided, however, that the Company shall not utilize this right more than once
in any twelve (12) month period; (iv) if the Company has, within the twelve (12)
month period preceding the date of such request, already effected two (2)
registrations on Form S-3 for the Holders pursuant to this Section 3.12; or (v)
in any particular jurisdiction in which the Company would be required to qualify
to do business or to execute a general consent to service of process in
effecting such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All expenses incurred in connection with a
registration requested pursuant to Section 3.12, including (without limitation)
all registration, filing, qualification, printer's and accounting fees and
reasonable legal fees (including the reasonable fees and disbursements of one
special counsel for the selling Holders), shall be borne by the Company.
Registrations effected pursuant to this Section 3.12 shall not be counted as
demands for registration or registrations effected pursuant to Section 3.2 or
3.3.
3.13 Assignment of Registration Rights. The rights to cause the
---------------------------------
Company to register Registrable Securities pursuant to this Section 3 may be
assigned by a Holder to a transferee or assignee of at least 15% of such
securities, provided the Company is, within a
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<PAGE>
reasonable time after such transfer, furnished with written notice of the name
and address of such transferee or assignee and the securities with respect to
which such registration rights are being assigned; and provided, further, that
such assignment shall be effective only if immediately following such transfer
the further disposition of such securities by the transferee or assignee is
restricted under the Act. The foregoing 15% limitation shall not apply, however,
to transfers by a Holder to shareholders, subsidiaries, partners or retired
partners, members or retired members of the Holder (including spouses and
ancestors, lineal descendants and siblings of such partners or spouses who
acquire Registrable Securities by gift, will or intestate succession) if all
such transferees or assignees agree in writing to appoint a single
representative as their attorney in fact for the purpose of receiving any
notices and exercising their rights under this Section 3.
3.14 Limitations on Subsequent Registration Rights. From and after
---------------------------------------------
the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the outstanding Registrable Securities,
enter into any agreement with any holder or prospective holder of any securities
of the Company which would allow such holder or prospective holder (a) to
include such securities in any registration filed under this Section 3, unless
under the terms of such agreement, such holder or prospective holder may include
such securities in any such registration only to the extent that the inclusion
of his securities will not reduce the amount of the Registrable Securities of
the Holders which is included or (b) to make a demand registration which could
result in such registration statement being declared effective prior to the
earlier of either of the dates set forth in subsection 3.2(a) or within one
hundred twenty (120) days of the effective date of any registration effected
pursuant to Section 3.2.
3.15 "Market Stand-Off" Agreement. The Holder hereby agrees that
----------------------------
during the one hundred eighty (180) day period following the effective date of a
registration statement of the Company filed under the Act, it shall not, to the
extent requested by the Company and such underwriter, sell or otherwise transfer
or dispose of (other than to donees who agree to be similarly bound) any Common
Stock of the Company held by it at any time during such period except Common
Stock included in such registration; provided, however, that such agreement
shall be applicable only to the first such registration statement of the Company
which covers Common Stock (or other securities) to be sold on its behalf to the
public in an underwritten offering and directors, officers and 1% shareholders
are also subject to similar agreements. To enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to the Registrable
Securities of the Holder (and the shares or securities of every other person
subject to the foregoing restriction) until the end of such period.
3.16 Termination of Registration Rights. No Holder shall be entitled
----------------------------------
to exercise any right provided for in this Section 3 after the earlier of (i)
five (5) years following the consummation of the Company's sale of its Common
Stock in an initial, firm commitment underwritten offering of its securities (an
"IPO") or (ii) except for the exercise of rights under Section 3.3 in connection
---
with firm commitment underwritten offerings of the Company's Common Stock, such
time as the Company first becomes subject to the reporting requirements of
Section 12, 13 or 15(d) of the 1934 Act and such Holder is able to dispose of
all of its Registrable Securities in one three-month period pursuant to the
provisions of Rule 144 or another similar exemption without registration.
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<PAGE>
Section 4. Additional Rights.
-----------------
4.1 Delivery of Financial Statements.
--------------------------------
(a) The Company shall deliver to each Holder of at least 100,000
shares of Registrable Securities, as soon as practicable, but in any event
within ninety (90) days after the end of each fiscal year of the Company, an
income statement for such fiscal year, a balance sheet of the Company as of the
end of such year, and statements of income and cash flows for such year, such
year-end financial reports to be in reasonable detail, prepared in accordance
with generally accepted accounting principles ("GAAP"), and audited and
----
certified by independent public accountants of nationally recognized standing
selected by the Company.
(b) The Company shall deliver to each Holder of at least 100,000
shares of Registrable Securities, so long as any shares of Preferred Stock are
outstanding:
(i) within forty-five (45) days of the end of each of the
first three quarters of each fiscal year, an unaudited income statement and
schedule as to the sources and application of funds and balance sheet and
comparison to budget for and as of the end of such quarter, in reasonable
detail;
(ii) within thirty (30) days of the end of each month, an
unaudited income statement and schedule as to the sources and application of
funds and balance sheet and comparison to budget for and as of the end of such
month, in reasonable detail; and
(iii) as soon as practicable, but in any event 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 balance sheets and
sources and applications of funds statements for such months and, as soon as
prepared, any other budgets or revised budgets prepared by the Company.
4.2 Inspection. The Company shall permit each Holder of at least
----------
100,000 shares of Registrable Securities, at such Holder's expense, to visit and
inspect the Company's properties, to examine its books of account and records
and to discuss the Company's affairs, finances and accounts with its officers,
all at such reasonable times as may be requested by such Holder; provided,
however, that the Company shall not be obligated pursuant to this Section 4.2 to
provide access to any information which it considers to be a trade secret or
similar confidential information.
4.3 Termination of Information and Inspection Covenants and
-------------------------------------------------------
Additional Rights. The covenants and rights set forth in Sections 4.1, 4.2, 4.4
-----------------
and 4.6 shall terminate as to the Holders and Investors and be of no further
force or effect immediately upon the consummation of an IPO, or when the Company
first becomes subject to the reporting requirements of Section 12, 13 or 15(d)
of the 1934 Act, whichever event shall first occur.
4.4 Right of First Offer. Subject to the terms and conditions
--------------------
specified in this Section 4.4, the Company hereby grants to each Major Investor
(as hereinafter defined) a right of
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<PAGE>
first offer with respect to future sales by the Company of its Shares (as
hereinafter defined). For purposes of this Section 4.4, a "Major Investor" shall
--------------
mean any person who holds, in the aggregate, at least 375,000 shares of Series
A, Series B, Series C, or Series D Preferred Stock (or the Common Stock issued
upon conversion thereof). For purposes of this Section 4.4, a Major Investor
includes any general partners, members and affiliates of a Major Investor. A
Major Investor who chooses to exercise the right of first offer may designate as
purchasers under such right itself or its partners, members or affiliates in
such proportions as it deems appropriate.
Each time the Company proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock ("Shares"), the Company shall first make an offering of such Shares to
------
each Major Investor in accordance with the following provisions:
(a) The Company shall deliver a notice by certified mail
("Notice") to the Major Investors stating (i) its bona fide intention to offer
------
such Shares, (ii) the number of such Shares to be offered, and (iii) the price
and terms, if any, upon which it proposes to offer such Shares.
(b) Within 10 calendar days after delivery of the Notice, the
Major Investor may elect to purchase or obtain, at the price and on the terms
specified in the Notice, up to that portion of such Shares which equals the
proportion that the number of shares of Common Stock issued and held, or
issuable upon conversion and exercise of all convertible or exercisable
securities then held, by such Major Investor bears to the total number of shares
of Common Stock then outstanding (assuming full conversion and exercise of all
convertible or exercisable securities).
(c) The Company may, during the 45-day period following the
expiration of the period provided in subsection 4.4(b) hereof, offer the
remaining unsubscribed portion of the Shares to any person or persons at a price
not less than, and upon terms no more favorable to the offeree than those
specified in the Notice. If the Company does not enter into an agreement for the
sale of the Shares within such period, or if such agreement is not consummated
within 60 days of the execution thereof, the right provided hereunder shall be
deemed to be revived and such Shares shall not be offered unless first reoffered
to the Major Investors in accordance herewith.
(d) The right of first offer in this paragraph 4.4 shall not be
applicable (i) to the issuance or sale of shares of Common Stock (or options
therefor) to employees, consultants and directors, pursuant to plans or
agreements approved by the Board of Directors for the primary purpose of
soliciting or retaining their services, inclusive of 1,500,000 shares issued to
Rod Fan and his nominees and other shares outstanding on the date hereof, or
(ii) to or after consummation of a bona fide, firmly underwritten public
offering of shares of Common Stock, registered under the Act pursuant to a
registration statement, or (iii) to the issuance of securities pursuant to the
conversion or exercise of outstanding convertible or exercisable securities, or
(iv) to the issuance of securities in connection with a bona fide business
acquisition of or by the Company, whether by merger, consolidation, sale of
assets, sale or exchange of stock or
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<PAGE>
otherwise, or (v) to the issuance of securities to financial institutions or
lessors in connection with commercial credit arrangements, equipment financings,
or similar transactions, or (vi) to the issuance or sale of the Series D
Preferred Stock, or (vii) to the issuance of securities that, with unanimous
approval of the Board of Directors of the Company, are not offered to any
existing shareholder of the Company.
4.5 Assignment of Information and Participation Rights. The rights
--------------------------------------------------
set forth in this Section 4 may be assigned by a Holder to a transferee or
assignee of at least 375,000 shares of such securities provided the Company is,
within a reasonable time after such transfer, furnished with written notice of
the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned; and provided,
further, that such assignment shall be effective only if immediately following
such transfer the further disposition of such securities by the transferee or
assignee is restricted under the Act. The foregoing 375,000 share limitation
shall not apply, however, to transfers by a Holder to shareholders, partners or
retired partners, members or retired members of the Holder (including spouses
and ancestors, lineal descendants and siblings of such partners or spouses who
acquire Registrable Securities by gift, will or intestate succession) if all
such transferees or assignees agree in writing to appoint a single
representative as their attorney in fact for the purpose of receiving any
notices and exercising their rights under this Section 4.
Section 5. Miscellaneous.
-------------
5.1 Assignment. Subject to the provisions of Section 3.13 hereof,
----------
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties hereto.
5.2 Third Parties. Nothing in this Agreement, express or implied, is
-------------
intended to confer upon any party, other than the parties hereto, and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
5.3 Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of California in the United States of America as
applied to agreements among California residents entered into and to be
performed entirely within California.
5.4 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.5 Notices. Unless otherwise provided, any notice required or
-------
permitted by this Agreement shall be in writing and shall be deemed delivered
upon delivery, when delivered personally or by overnight courier or sent by
telegram or fax, or forty-eight (48) hours after being deposited in the U.S.
mail, as certified or registered mail, with postage prepaid, and addressed to
the party to be notified at such party's address as set forth below or on
Exhibit A hereto or as subsequently modified by written notice.
---------
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<PAGE>
5.6 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, portions of such provisions, or
such provisions in their entirety, to the extent necessary, shall be severed
from this Agreement, and the balance of this Agreement shall be enforceable in
accordance with its terms.
5.7 Effect of Amendment or Waiver. Investors and their respective
-----------------------------
successors and assigns acknowledge that any amendment by the operation of
Section 2 hereof will have the right and power to diminish or eliminate all
rights pursuant to this Agreement.
5.8 Rights of Holders. Each Holder of Registrable Securities shall
-----------------
have the absolute right to exercise or refrain from exercising any right or
rights that such Holder may have by reason of this Agreement, including, without
limitation, the right to consent to the waiver or modification of any obligation
under this Agreement, and such Holder shall not incur any liability to any other
holder of any securities of the Company as a result of exercising or refraining
from exercising any such right or rights.
5.9 Delays or Omissions. No delay or omission to exercise any right,
-------------------
power or remedy accruing to any party to this Agreement, upon any breach or
default of the other party, shall impair any such right, power or remedy of such
non-breaching party nor shall it be construed to be a waiver of any such breach
or default, or an acquiescence therein, or of or in any similar breach or
default thereafter 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 party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be made 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.
5.10 Attorney's Fees. If any action at law or in equity is necessary
---------------
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorney's fees, costs and necessary disbursements
(including all fees, costs and expenses of appeals) in addition to any other
relief to which such party may be entitled.
5.11 Additional Parties. The Investors agree that, upon delivery of
------------------
counterpart signature pages to this Agreement, any additional persons who become
"Purchasers" under the Series D Purchase Agreement at any "Additional Purchaser
Closing" as such term is described in the Purchase Agreement shall become
"Investors" under this Agreement without further action by any other Investor.
[Signature Pages Follow]
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<PAGE>
The parties hereto have executed this Amended and Restated Rights Agreement
as of the day and year first above written.
COMPANY:
@ROAD, INC.
By: /s/ Krish Panu
----------------------------------
Name: Krish Panu
Title: Chief Executive Officer and
President
Address: 47370 Fremont Boulevard
Fremont, CA 94538
FOUNDER: INVESTORS:
/s/ ROD FAN
-----------------
Rod Fan
[SIGNATURE PAGE TO AMENDED AND RESTATED RIGHTS AGREEMENT]
<PAGE>
EXHIBIT A
---------
Schedule of Investors
Calvin Lee U.S. Venture Partners V, L.P.
12-2 Nei Huan South Rd. 2180 Sand Hill Road, Suite 300
N.E.P.Z. Kaoshiung Menlo Park, CA 94025
Taiwan, ROC
Orient Semiconductor Electronics, Ltd. USVP V International, L.P.
c/o Calvin Lee 2180 Sand Hill Road, Suite 300
12-2 Nei Huan South Rd. Menlo Park, CA 94025
N.E.P.Z. Kaoshiung
Taiwan, ROC
OSE, Inc. 2180 Associates Fund V, L.P.
c/o Edmond Tseng 2180 Sand Hill Road, Suite 300
2700 Augstine Dr., #140 Menlo Park, CA 94025
Santa Clara, CA 95054
Compudata, Inc. USVP V Entrepreneur Partners, L.P.
46500 Fremont Blvd., Suite 710 2180 Sand Hill Road, Suite 300
Fremont, CA 94538 Menlo Park, CA 94025
Roger Koo Institutional Venture Partners VIII,
45183 Cogar Circle L.P.
Fremont, CA 94539 3000 Sand Hill Road
Menlo Park, CA 94025
Chen-Shu Chen IVM Investment Fund VIII, LLC
c/o Rod Fan 3000 Sand Hill Road
323 Lower Vintners Circle Menlo Park, CA 94025
Fremont, CA 94539
Edmond Tseng IVM Investment Fund VIII-A, LLC
1453 Tartarian Way 3000 Sand Hill Road
San Jose, CA 95129 Menlo Park, CA 94025
Chinq-Ping Jeng IVP Founders Fund I, L.P.
1318 Vanna Court 3000 Sand Hill Road
San Jose, CA 95131 Menlo Park, CA 94025
Thomas A. Majeski IVP Broadband Fund, L.P.
15231 Skyview Dr. 3000 Sand Hill Road
San Jose, CA 95132 Menlo Park, CA 94025
<PAGE>
Danny Te-Yi Chang VLG Investments 1998
45530 Cheyenne Place 2800 Sand Hill Road
Fremont, CA 94539 Menlo Park, CA 94025
Ho-Sheng Chien Tae Hea Nahm
855 Oracle Oak Place c/o Venture Law Group
Sunnyvale, CA 94086 2800 Sand Hill Road
Menlo Park CA 94025
Admirals, L.P. Crimson Asia Capital Ltd., L.P.
Galleon Management c/o W.S. Walker & Company
135 E. 57th St., 26th Floor Caledonian House, P. O. Box 265
New York, NY 10022 George Town, Grand Cayman
Cayman Islands
ABS Capital Partners III, L.P. Crimson Investments, Ltd. L.P.
ABS Capital Partners c/o W.S. Walker & Company
1 South Street, 25/th/ Floor Caledonian House, P. O. Box 265
Baltimore, MD 21202 George Town, Grand Cayman
Attn: Steve Bailey Cayman Islands
With a copy to:
ABS Capital Partners Mentor Venture Partners, L.P.
101 California St., 47/th/ Floor c/o Kenneth L. Hausman
San Francisco, CA 94111 2500 Sand Hill Road Suite 110
Attn: Andy Sheehan Menlo Park, CA 94025
Arbor Company Jeffrey A. Morris Property Trust
c/o D. James Guzy c/o The Jeffrey A. Morris Group
Arbor Company 2500 Sand Hill Road Suite 240
P.O Box 128 Menlo Park, CA 94025
Glenbrode, NV 89413
AP Venture Partners I Kris Chellam
c/o Norm Hall 14506 Chester Ave.
435 Tasso St., Ste. 305 Saratoga, CA 95070
Palo Alto, CA 94301
The Marren Trust Ronald Antipa
John Marren, Trustee C/o Alex Brown Partners
325 Roblar Ave. 101 California St., 46/th/ Floor
Hillsborough, CA 94010 San Francisco, CA 94111
Manuel H. Mere The Schifrin 1990 Revocable Trust
6041 W. Walbrook Arieh Schifrin and Ruth Schifrin,
San Jose, CA 95129 Trustors
1922 Laver Ct.
Los Altos, CA, 94024
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<PAGE>
Bayview Investors, Ltd. Neptune Capital Management, L.L.C.
Attn: Jennifer Sherrill Gulbir Madan
555 California St., Suite 2600 237 Park Avenue, Suite 900
San Francisco, CA 94104 New York, NY 10017
Neptune Explorer Partners, L.P. Neptune Explorer Fund, Ltd.
Gulbir Madan Gulbir Madan
237 Park Avenue, Suite 900 237 Park Avenue, Suite 900
New York, NY 10017 New York, NY 10017
Patricia Holliday Jordan Bruce A. Walicek
400 E. 52/nd/ St., #2D 7064 Wooded Lake Dr.
New York, NY 10022 San Jose, CA 95120
Sonny Gulati VLG Investments 1999
555 California St., #2200 2800 Sand Hill Road
San Francisco, CA 94104 Menlo Park, CA 94025
Patrick R. Barry CNA Trust Company, TTEE VLG 401(k)
178 El Dorado Retirement Plan FBO
Palo Alto, CA 94306 Sanjay K. Khare
3080 S. Bristol St., 2/nd/ Floor
Costa Mesa, CA 92626
Andrea E. Chavez James D. Fay
3230 Jacksa St. c/o Venture Law Group
San Francisco, CA 94118 2800 Sand Hill Road
Menlo Park, CA 94025
Shaun Andrikopoulos Avantika Nehru Medan
111 Cole c/o Neptune Capital Management
San Francisco, CA 94117 237 Park Avenue, Suite 900
New York, NY 10017
Dan Niles Krishna Shankar
299 Santa Paula Ave. 950 Corte Del Sol
San Francisco, CA 94127 Fremont, CA 94539
B.J. Shanker Chad W. Keck
967 Galindo Ct. 410 Walsh Road
Milpitas, CA 95035 Atherton, CA 94027
John O. Barr Brian Modoff
380 Shelbourne Terrace 1 La Strada
Ridgewood, NJ 07450 Burlingame, CA 94010
-3-
<PAGE>
Kumar Ramalingam John Rossi
3637 Meadow Lane 270 Eleanor Drive
Sacramento, CA 95864 Woodside, CA 94062
Sirios Capital Partners, L.P. Sirios Capital Partners II, L.P.
75 Park Plaza 75 Park Plaza
Boston MA, 02116 Boston MA, 02116
Sirios Overseas Fund LTD Sirios/QP Partners, L.P.
75 Park Plaza 75 Park Plaza
Boston MA, 02116 Boston MA, 02116
Rob Certilman U.S. Venture Partners VII, L.P.
780 Middle Country Road 2180 Sand Hill Road, Suite 300
St. James, NY 11780 Menlo Park, CA 94025
Intel Corporation Robert Hinckley
2200 Mission College Blvd. 79 Cresent Dr.
M/S SC4-203 Palo Alto, CA 94301
Santa Clara, CA 95052-8119
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