Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1 Filing Table of Contents
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1: S-1 Registration Statement (General Form) HTML 1.38M
18: CORRESP ¶ Comment-Response or Other Letter to the SEC HTML 9K
2: EX-3.1 Articles of Incorporation/Organization or By-Laws HTML 106K
3: EX-3.3 Articles of Incorporation/Organization or By-Laws HTML 150K
4: EX-4.2 Instrument Defining the Rights of Security Holders HTML 200K
5: EX-4.3 Instrument Defining the Rights of Security Holders HTML 76K
6: EX-4.4 Instrument Defining the Rights of Security Holders HTML 73K
7: EX-4.5 Instrument Defining the Rights of Security Holders HTML 81K
8: EX-4.6 Instrument Defining the Rights of Security Holders HTML 59K
11: EX-10.11 Material Contract HTML 52K
12: EX-10.12 Material Contract HTML 223K
13: EX-10.13 Material Contract HTML 462K
14: EX-10.17 Material Contract HTML 115K
15: EX-10.18 Material Contract HTML 53K
9: EX-10.2 Material Contract HTML 142K
10: EX-10.3 Material Contract HTML 292K
16: EX-21.1 Subsidiaries HTML 8K
17: EX-23.2 Consent of Experts or Counsel HTML 9K
‘EX-4.2’ — Instrument Defining the Rights of Security Holders
SECOND AMENDED AND RESTATED
INVESTORS’ RIGHTS
AGREEMENT
This
Second Amended and Restated Investors’ Rights Agreement (this “Agreement”) is made as of
January 30, 2009 by and among Cornerstone OnDemand, Inc., a Delaware corporation
(the “Company”), the
persons and entities (each, an “Investor” and collectively,
the “Investors”) listed
on Exhibit A
hereto, the persons and entities listed on Exhibit B
attached hereto (each an “Existing Investor,” and
collectively the “Existing
Investors”), and Adam Miller (the “Founder”). Unless
otherwise defined herein, capitalized terms used in this Agreement have the
meanings ascribed to them in Section 1.
RECITALS
WHEREAS, the Company, the
Existing Investors, and the Founder entered into an Amended and Restated
Investors’ Rights Agreement on May 10, 2007, as amended on September 12, 2007
(the “Prior Agreement”),
providing for, among other things, certain registration rights, and such parties
now, desire to amend and restate such Prior Agreement in its
entirety.
WHEREAS, pursuant to Section
5.1 of the Prior Agreement, such agreement may be amended, and any provision
therein waived, with the consent of the Company and the holders of at least a
majority in interest of the outstanding Registrable Securities (as such term is
defined in the Prior Agreement).
WHEREAS, the Existing
Investors and the Founder are holders of at least a majority in interest of the
Registrable Securities (as such term is defined in the Prior Agreement), and
desire to terminate the Prior Agreement and to accept the rights created
pursuant hereto in lieu of the rights granted to them under the Prior
Agreement.
WHEREAS, the Company and the
Investors are parties to the Series E Preferred Stock and Warrant Purchase
Agreement of even date herewith (the “Purchase Agreement”), and as a
condition to the closing of the sale of the Series E Preferred Stock and
Warrants to purchase shares of Series E Preferred Stock and accompanying
Warrants to the Investors, the Company, the Investors, the Existing Investors
and the Founder shall execute and deliver this Agreement.
AGREEMENT
NOW, THEREFORE, in
consideration of the mutual promises and covenants set forth herein, and other
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties agree to amend and restate the Prior Agreement in its entirety and
hereby agree as follows:
Section 1
General
1.1 Amendment and Restatement of Prior
Agreement.
The Prior Agreement is hereby amended in its entirety and restated
herein. Such amendment and restatement is effective upon the
execution of this Agreement by the Company and the holders of at least a
majority in interest of the Registrable Securities (as such term is defined in
the Prior Agreement). Upon such execution, all provisions of, rights
granted and covenants made in the Prior Agreement are hereby waived, released
and superseded in their entirety and shall have no further force or effect,
including, without limitation, all rights of first refusal and any notice period
associated therewith otherwise applicable to the transactions contemplated by
the Purchase Agreement.
1.2 Certain
Definitions.
As used in this Agreement, the following terms shall have the meanings set forth
below:
(a)
“Auditors” shall have
the meaning set forth in Section 3.1(a)(i)
hereof.
(b)
“Commission” shall mean
the Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act.
(c) “Common Stock” means the Common
Stock of the Company.
(d)
“Conversion Stock” shall
mean shares of Common Stock issued upon conversion of the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock and the Series E Preferred Stock.
(e)
“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, or any similar successor
federal statute and the rules and regulations thereunder, all as the same shall
be in effect from time to time.
(f)
“Existing Investors”
shall mean the persons and entities listed on Exhibit B
hereto.
(g)
“Founder Shares” shall
mean shares of Common Stock held by the Founder.
(h)
“Founder” shall mean
Adam Miller.
(i)
“Holder” shall mean any
Investor, Existing Investor or Founder who holds Registrable Securities and any
holder of Registrable Securities to whom the registration rights conferred by
this Agreement have been duly and validly transferred in accordance with Section 2.12 of this
Agreement; provided that
Comerica Ventures Incorporated shall be deemed a Holder only with respect to
Sections 2.2, 2.4, 2.5, 2.6,
2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13 and 2.14 of this
Agreement.
(j)
“Indemnified Party”
shall have the meaning set forth in Section 2.6(c)
hereto.
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(k)
“Indemnifying Party”
shall have the meaning set forth in Section 2.6(c)
hereto.
(l)
“Initial Closing” shall
mean the date of the initial sale of shares of the Company’s Series E
Preferred Stock and accompanying Warrants pursuant to the Purchase
Agreement.
(m)
“Initial Public
Offering” shall mean the closing of the Company’s first firm commitment
underwritten public offering of the Company’s Common Stock registered under the
Securities Act.
(n)
“Initiating Holders”
shall mean any Holder or Holders who in the aggregate hold not less than fifty
percent (50%) of the outstanding Registrable Securities.
(o)
“Investors” shall mean
the persons and entities listed on Exhibit A
hereto.
(p)
“New Securities” shall
have the meaning set forth in Section 4.1(a)
hereto.
(q)
“Prior Agreement” shall
have the meaning set forth in the Recitals hereto.
(r) “Purchase Agreement” shall have
the meaning set forth in the Recitals hereto.
(s)
“Registrable Securities”
shall mean (i) shares of Common Stock issued or issuable pursuant to the
conversion of the Shares or the conversion of the Shares issuable upon exercise
of the Warrants, (ii) the Founder Shares, and (iii) any Common Stock issued
as (or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to or
in exchange for or in replacement of the shares referenced in (i) or (ii)
above; provided, however, that (x) for
purposes of Section 2.1
(Requested Registration), Section 2.3 (Registration on
Form S-3), Section 4
(Right of First Refusal) and Section 5.1 (Amendment), the
Founder Shares shall not be deemed “Registrable Securities” and the Founder
shall not be deemed a “Holder,” (y) Registrable Securities shall not include any
shares of Common Stock described in clauses (i), (ii) or (iii) above which
have previously been registered or which have been sold to the public either
pursuant to a registration statement or Rule 144, or which have been sold
in a private transaction in which the transferor’s rights under this Agreement
are not validly assigned in accordance with this Agreement, and (z) for the
purposes of only Sections 2.2,
2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13 and 2.14 any shares of Common
Stock issuable upon the conversion of the Series D Preferred Stock issuable upon
exercise of the Warrant held by Comerica Ventures Incorporated shall be deemed
“Registrable Securities” and Comerica Ventures Incorporated shall be deemed a
“Holder.”
(t) The
terms “register,” “registered” and “registration” shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
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(u)
“Registration Expenses”
shall mean all expenses incurred in effecting any registration pursuant to this
Agreement, including, without limitation, all registration, qualification, and
filing fees, printing expenses, escrow fees, fees and disbursements of counsel
for the Company and one special counsel for the Holders, selected by the Holders
of a majority of the Registrable Securities to be registered, blue sky fees and
expenses, and expenses of any regular or special audits incident to or required
by any such registration, but shall not include Selling Expenses, fees and
disbursements of other counsel for the Holders and the compensation
of regular employees of the Company, which shall be paid in any event by the
Company.
(v)
“Restricted Securities”
shall mean any Registrable Securities required to bear the first legend set
forth in Section 2.8(c)
hereof.
(w)
“Rule 144” shall
mean Rule 144 as promulgated by the Commission under the Securities Act, as
such Rule may be amended from time to time, or any similar successor rule that
may be promulgated by the Commission.
(x)
“Rule 145” shall
mean Rule 145 as promulgated by the Commission under the Securities Act, as
such Rule may be amended from time to time, or any similar successor rule that
may be promulgated by the Commission.
(y)
“Rule 415” shall
mean Rule 415 as promulgated by the Commission under the Securities Act, as
such Rule may be amended from time to time, or any similar successor rule that
may be promulgated by the Commission.
(z)
“Securities Act” shall
mean the Securities Act of 1933, as amended, or any similar successor federal
statute and the rules and regulations thereunder, all as the same shall be in
effect from time to time.
(aa)
“Selling Expenses” shall
mean all underwriting discounts, selling commissions and stock transfer taxes
applicable to the sale of Registrable Securities and fees and disbursements of
counsel for any Holder other than the fees and disbursements of one special
counsel to the Holders included in Registration Expenses.
(bb)
“Series A Preferred
Stock” shall mean the shares of the Company’s Series A Preferred
Stock.
(cc)
“Series B Preferred
Stock” shall mean the shares of the Company’s Series B Preferred
Stock.
(dd)
“Series C Preferred
Stock” shall mean the shares of the Company’s Series C Preferred
Stock.
(ee)
“Series D Preferred
Stock” shall mean the shares of the Company’s Series D Preferred
Stock.
(ff)
“Series E Preferred
Stock” shall mean the shares of the Company’s Series E Preferred
Stock issued pursuant to the Purchase Agreement.
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(gg)
“Shares” shall mean the
Company’s Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock and Series E
Preferred Stock.
(hh)
“Significant Holders”
shall have the meaning set forth in Section 3.1(a)
hereof.
(ii)
“Warrants” shall mean
(i) the warrants to purchase shares of the Company’s Series E Preferred Stock
issued pursuant to the Purchase Agreement, and (ii) any outstanding warrants to
purchase shares of the Company’s Series D Preferred Stock.
(jj)
“Withdrawn Registration”
shall mean a forfeited demand registration under Section 2.1 in accordance
with the terms and conditions of Section 2.4.
Section 2
Registration
Rights
2.1 Requested
Registration.
(a) Request for
Registration. Subject to the conditions set forth in this
Section 2.1, if the
Company shall receive from Initiating Holders a written request signed by such
Initiating Holders that the Company effect any registration with respect to all
or a part of the Registrable Securities (such request shall state the number of
shares of Registrable Securities to be disposed of and the intended methods of
disposition of such shares by such Initiating Holders), the Company
will:
(i)
promptly give written notice of the proposed registration to all other Holders;
and
(ii)
Subject to the provisions of Section 2.1(c) hereof, as soon as practicable, file
and use its commercially reasonable efforts to effect such registration
(including, without limitation, filing post-effective amendments, appropriate
qualifications under applicable blue sky or other state securities laws, and
appropriate compliance with the Securities Act) and to 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 twenty (20) days
after such written notice from the Company is mailed or delivered.
(b) Limitations on Requested
Registration. The Company shall not be obligated to effect, or
to take any action to effect, any such registration pursuant to this Section 2.1:
(i) Prior
to the earlier of (A) the five (5) year anniversary of the date of this
Agreement or (B) one hundred eighty (180) days following the effective date
of the first registration statement filed by the Company covering an
underwritten offering of any of its securities to the general
public;
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(ii) If
the Initiating Holders, together with the holders of any other securities of the
Company entitled to inclusion in such registration statement, propose to sell
Registrable Securities and such other securities (if any) the aggregate proceeds
of which (after deduction for underwriter’s discounts and expenses related to
the issuance) are less than $5,000,000;
(iii) In
any particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification, or compliance, unless the Company is already subject to service
in such jurisdiction and except as may be required by the Securities
Act;
(iv)
After the Company has initiated one (1) such registration pursuant to this Section 2.1 (counting for
these purposes only (x) a registration which has been declared or ordered
effective and pursuant to which securities have been sold, and (y) a
Withdrawn Registration);
(v)
During the period starting with the date sixty (60) days prior to the Company’s
good faith estimate of the date of filing of, and ending on a date one hundred
eighty (180) days after the effective date of, a Company-initiated registration
(or ending on the subsequent date on which all market stand-off agreements
applicable to the offering have terminated); provided that the
Company is actively employing in good faith commercially reasonable efforts to
cause such registration statement to become effective; or
(vi) If
the Initiating Holders propose to dispose of Registrable Securities which may be
immediately registered on Form S-3 pursuant to a request made under Section 2.3
hereof.
(c) Deferral. If
(i) in the good faith judgment of the Board of Directors of the Company,
the filing of a registration statement covering the Registrable Securities would
be materially detrimental to the Company and the Board of Directors of the
Company concludes, as a result, that it is in the best interests of the Company
to defer the filing of such registration statement at such time, and
(ii) 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 of the Company, it would be materially detrimental to the Company for
such registration statement to be filed in the near future and that it is,
therefore, in the best interests of the Company to defer the filing of such
registration statement, then (in addition to the limitations set forth in Section 2.1(b)(v) above)
the Company shall have the right to defer such filing for a period of not more
than one hundred eighty (180) days after receipt of the request of the
Initiating Holders, and, provided further, that the
Company shall not defer its obligation in this manner more than once in any
twelve-month period; provided, further, that the
Company shall not register any securities for the account of itself or any other
shareholder during such one hundred eighty (180) day period (other than a
registration relating solely to a corporate reorganization or transaction under
Rule 145 of the Securities Act, a registration on any form that does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities, or a
registration in which the only Common Stock being registered is Common Stock
issuable upon conversion of debt securities that are also being
registered).
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(d) Underwriting. If
the Initiating Holders intend to distribute the Registrable Securities covered
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to this Section 2.1 and the
Company shall include such information in the written notice given pursuant to
Section 2.1(a)(i). In
such event, the right of any Holder to include all or any portion of its
Registrable Securities in such registration pursuant to this Section 2.1 shall be
conditioned upon such Holder’s participation in such an underwriting and the
inclusion of such Holder’s Registrable Securities to the extent provided
herein. If the Company shall request inclusion in any registration
pursuant to Section 2.1 of securities
being sold for its own account, or if other persons shall request inclusion in
any registration pursuant to Section 2.1, the
Initiating Holders shall, on behalf of all Holders, offer to include such
securities in the underwriting and such offer shall be conditioned upon the
participation of the Company or such other persons in such underwriting and the
inclusion of the Company’s and such person’s other securities of the Company and
their acceptance of the further applicable provisions of this Section 2 (including
Section 2.10). The
Company shall (together with all Holders and other persons proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form, with the representative of the
underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holders, which underwriters are reasonably acceptable
to the Company.
Notwithstanding
any other provision of this Section 2.1, if the
underwriters advise the Initiating Holders in writing that marketing factors
require a limitation on the number of shares to be underwritten, the number of
Registrable Securities that may be so included shall be allocated as follows:
(i) first, among all Holders requesting to include Registrable Securities
in such registration statement based on the pro rata percentage of Registrable
Securities held by such Holders, assuming conversion and (ii) second, to
the Company, which the Company may allocate, at its discretion, for its own
account, or for the account of other holders or employees of the
Company.
If a
person who has requested inclusion in such registration as provided above does
not agree to the terms of any such underwriting, such person shall be excluded
therefrom by written notice from the Company, the underwriter or the Initiating
Holders. The securities so excluded shall also be withdrawn from
registration. Any Registrable Securities or other securities excluded
or withdrawn from such underwriting shall also be withdrawn from such
registration. If shares are so withdrawn from the registration and if
the number of shares to be included in such registration was previously reduced
as a result of marketing factors pursuant to this Section 2.1(d), then the
Company shall then offer to all Holders who have retained rights to include
securities in the registration the right to include additional Registrable
Securities in the registration in an aggregate amount equal to the number of
shares so withdrawn, with such shares to be allocated among such Holders
requesting additional inclusion, as set forth above.
For any
Holder that is a venture capital fund, partnership, or corporation or limited
liability company, the partners, retired partners, members, retired members,
stockholders and affiliated funds and shareholders of such Holder, or the
estates and family members of any such partners, and retired partners, members
and retired members and any trusts for the benefit of any of the foregoing
persons shall be deemed to be a single “Holder,” and any pro rata reduction with
respect to such “Holder” shall be based upon the aggregate amount of shares
carrying registration rights owned by all entities and individuals included in
such “Holder,” as defined in this sentence.
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2.2 Company
Registration.
(a) Company
Registration. If 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 pursuant to Sections 2.1 or 2.3, (ii) a registration
relating solely to employee benefit plans; (iii) a registration relating to
the offer and sale of debt securities; (iv) a registration relating to a
corporate reorganization or other transaction on Form S-4; (v) a
registration on Form S-3 of securities to be offered on a delayed or
continuous basis pursuant to Rule 415 of the Securities Act; (vi) a
registration relating to an Initial Public Offering; or (vii) any
registration form that does not permit secondary sales, the Company
will:
(i)
promptly give written notice of the proposed registration to all Holders;
and
(ii) use
its commercially reasonable efforts to include in such registration (and any
related qualification under blue sky laws or other compliance), except as set
forth in Section 2.2(b) below, and
in any underwriting involved therein, all of such Registrable Securities as are
specified in a written request or requests made by any Holder or Holders
received by the Company within ten (10) days after such written notice from the
Company is mailed or delivered. Such written request may specify all
or a part of a Holder’s Registrable Securities.
(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 2.2(a)(i). In
such event, the right of any Holder to registration pursuant to this Section 2.2 shall be
conditioned upon such Holder’s participation in such underwriting and the
inclusion of such Holder’s Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall (together with the Company and the
other holders of securities of the Company with registration rights to
participate therein distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected by the Company.
Notwithstanding
any other provision of this Section 2.2, if the
underwriters advise the Company in writing that marketing factors require a
limitation on the number of shares to be underwritten, the underwriters may
(subject to the limitations set forth below) limit the number of Registrable
Securities to be included in, the registration and underwriting. The
Company shall so advise all holders of securities requesting registration, and
the number of shares of securities that are entitled to be included in the
registration and underwriting shall be allocated, as follows: (i) first, to
the Company for securities being sold for its own account and (ii) second,
to the Holders requesting to include Registrable Securities in such registration
statement based on the pro rata percentage of Registrable Securities held by
such Holders, assuming conversion; provided, however, that in no event shall the
amount of securities of the selling Holders included in the offering be reduced
below 35% of the total amount of securities included in such offering, except in
the event of an Initial Public Offering, in which case all such securities may
be excluded; provided, further, that in the event the amount of securities of
the selling Holders included in the offering are reduced, the amount of
securities held by the Founder included in the offering shall be reduced on a
pro-rata basis, except in the event of an Initial Public Offering, in which case
before the number of securities to be included by the selling Holders is
reduced, all of the securities held by the Founder shall be excluded from such
offering.
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If a
person who has requested inclusion in such registration as provided above does
not agree to the terms of any such underwriting, such person shall also be
excluded therefrom by written notice from the Company or the
underwriter. The Registrable Securities or other securities so
excluded shall also be withdrawn from such registration. Any
Registrable Securities or other securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration. If shares are
so withdrawn from the registration and if the number of shares of Registrable
Securities to be included in such registration was previously reduced as a
result of marketing factors pursuant to Section 2.2(b), the
Company shall then offer to all persons who have retained the right to include
securities in the registration the right to include additional securities in the
registration in an aggregate amount equal to the number of shares so withdrawn,
with such shares to be allocated among the persons requesting additional
inclusion, in the manner set forth above.
(c) Right to Terminate
Registration. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 2.2 prior to the
effectiveness of such registration whether or not any Holder has elected to
include securities in such registration, and shall notify any Holder that has
elected to include shares in such registration of such termination or
withdrawal.
2.3 Registration on
Form S-3.
(a) Request for Form S-3
Registration. After its initial public offering, the Company
shall use its commercially reasonable efforts to qualify for registration on
Form S-3 or any comparable or successor form or forms. After the
Company has qualified for the use of Form S-3, in addition to the rights
contained in the foregoing provisions of this Section 2 and subject to
the conditions set forth in this Section 2.3, if the
Company shall receive from a Holder or Holders of Registrable Securities a
written request that the Company effect any registration on Form S-3 or any
similar short form registration statement with respect to all or part of the
Registrable Securities (such request shall state the number of shares of
Registrable Securities to be disposed of and the intended methods of disposition
of such shares by such Holder or Holders), the Company will take all such action
with respect to such Registrable Securities as required by Section 2.1(a)(i) and
(ii).
(b) Limitations on Form S-3
Registration. The Company shall not be obligated to effect, or
take any action to effect, any such registration pursuant to this Section 2.3:
(i) In
the circumstances described in either Sections 2.1(b)(i), 2.1(b)(iii) or 2.1(b)(v);
(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) on Form S-3 at an aggregate
price to the public of less than $2,000,000; or
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(iii) If,
in a given twelve-month period, the Company has effected two (2) such
registrations in such period.
(c) Deferral. The
provisions of Section 2.1(c) shall
apply to any registration pursuant to this Section 2.3.
(d) Underwriting. If
the Holders of Registrable Securities requesting registration under this Section 2.3 intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, the provisions of Sections 2.1(e) shall
apply to such registration. Notwithstanding anything contained herein
to the contrary, registrations effected pursuant to this Section 2.3 shall not be
counted as requests for registration or registrations effected pursuant to Section 2.1.
2.4 Expenses of
Registration.
All Registration Expenses incurred in connection with registrations pursuant to
Sections 2.1, 2.2 and 2.3 hereof 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 Sections 2.1 and 2.3 if the registration
request is subsequently withdrawn at the request of the Holders of a majority of
the Registrable Securities to be registered or because a sufficient number of
Holders shall have withdrawn so that the minimum offering conditions set forth
in Sections 2.1 and
2.3 are no longer
satisfied (in which case all participating Holders shall bear such expenses pro
rata among each other based on the number of Registrable Securities requested to
be so registered), unless the Holders of a majority of the Registrable
Securities agree to forfeit their right to a demand registration pursuant to
Section 2.1; provided, however, in the event
that a withdrawal by the Holders is based upon material adverse information
relating to the Company that is different from the information known or
available (upon request from the Company or otherwise) to the Holders requesting
registration at the time of their request for registration under Section 2.1, such
registration shall not be treated as a counted registration for purposes of
Section 2.1 hereof, even
though the Holders do not bear the Registration Expenses for such
registration. All Selling Expenses relating to securities registered
on behalf of the Holders shall be borne by the holders of securities included in
such registration pro rata among each other on the basis of the number of
Registrable Securities so registered.
2.5 Registration
Procedures.
In the case of each registration effected by the Company pursuant to Section 2, the Company
will keep each Holder advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the
Company will use its commercially reasonable efforts to:
(a) Keep
such registration effective for a period ending on the earlier of the date which
is sixty (60) days from the effective date of the registration statement or such
time as the Holder or Holders have completed the distribution described in the
registration statement relating thereto;
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(b) To
the extent the Company is a well-known seasoned issuer (as defined in
Rule 405 under the Securities Act) (a “WKSI”) at the time any request
for registration is submitted to the Company in accordance with Section 2.3, (i) if
so requested, file an automatic shelf registration statement (as defined in
Rule 405 under the Securities Act) (an “automatic shelf registration
statement”) to effect such registration, and (ii) remain a WKSI (and
not become an ineligible issuer (as defined in Rule 405 under the
Securities Act)) during the period during which such automatic shelf
registration statement is required to remain effective in accordance with this
Agreement;
(c)
Prepare and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement for the period set forth in subsection (a)
above;
(d)
Furnish such number of prospectuses, including any preliminary
prospectuses, and other documents incident thereto, including any
amendment of or supplement to the prospectus, as a Holder from time to time may
reasonably request;
(e) Use
its reasonable best efforts to register and qualify the securities covered by
such registration statement under such other securities or Blue Sky laws of such
jurisdiction 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;
(f)
Notify each seller of Registrable Securities covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or incomplete in light of the circumstances then existing, and
following such notification promptly prepare and furnish to such seller a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or incomplete
in light of the circumstances then existing;
(g) If at
any time when the Company is required to re-evaluate its WKSI status for
purposes of an automatic shelf registration statement used to effect a request
for registration in accordance with Section 2.3 (i) the
Company determines that it is not a WKSI, (ii) the registration statement
is required to be kept effective in accordance with this Agreement, and
(iii) the registration rights of the applicable Holders have not
terminated, promptly amend the registration statement onto a form the Company is
then eligible to use or file a new registration statement on such form, and keep
such registration statement effective in accordance with the requirements
otherwise applicable under this Agreement;
11
(h) If
(i) a registration made pursuant to a shelf registration statement is
required to be kept effective in accordance with this Agreement after the third
anniversary of the initial effective date of the shelf registration statement
and (ii) the registration rights of the applicable Holders have not
terminated, file a new registration statement with respect to any unsold
Registrable Securities subject to the original request for registration prior to
the end of the three year period after the initial effective date of the shelf
registration statement, and keep such registration statement effective in
accordance with the requirements otherwise applicable under this
Agreement;
(i) Use
its commercially reasonable efforts to furnish, on the date that such
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (i) an opinion, dated as of
such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and
reasonably satisfactory to a majority in interest of the Holders requesting
registration of Registrable Securities and (ii) a “comfort” letter dated as
of such date, from the independent certified public accountants of the Company,
in form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
underwriters;
(j)
Provide a transfer agent and registrar for all Registrable Securities registered
pursuant to such registration statement and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration;
(k)
Otherwise use its commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen months, beginning
with the first month after the effective date of the Registration Statement,
which earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act;
(l) Cause
all such Registrable Securities registered pursuant hereunder to be listed on
each securities exchange on which similar securities issued by the Company are
then listed; and
(m) In
connection with any underwritten offering pursuant to a registration statement
filed pursuant to Section 2.1 hereof, enter
into an underwriting agreement in form reasonably necessary to effect the offer
and sale of Common Stock, provided such underwriting agreement contains
reasonable and customary provisions, and provided, further, that each
Holder participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
12
2.6 Indemnification. To the
extent permitted by law, the Company will indemnify and hold harmless each
Holder, each of its officers, directors and partners, legal counsel and
accountants 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 2, and each
underwriter, if any, and each person who controls within the meaning of
Section 15 of the Securities Act any underwriter, against all expenses,
claims, losses, damages and liabilities (or actions, proceedings or settlements
in respect thereof) arising out of or based on: (i) any untrue statement
(or alleged untrue statement) of a material fact contained or incorporated by
reference in any prospectus, offering circular or other document (including any
related registration statement, notification or the like) incident to any such
registration, qualification or compliance any registration statement, any
prospectus included in the registration statement, any issuer free writing
prospectus (as defined in Rule 433 of the Securities Act), any issuer
information (as defined in Rule 433 of the Securities Act) filed or
required to be filed pursuant to Rule 433(d) under the Securities Act or
any other document incident to any such registration, qualification or
compliance prepared by or on behalf of the Company or used or referred to by the
Company, (ii) 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, or (iii) any violation (or alleged violation) by
the Company of the Securities Act, any state securities laws or any rule or
regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any offering covered by such
registration, qualification or compliance, and the Company will reimburse each
such Holder, each of its officers, directors, partners, legal counsel and
accountants 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 and defending or
settling 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 action arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company by
such Holder, any of such Holder’s officers, directors, partners, legal counsel
or accountants, any person controlling such Holder, such underwriter or any
person who controls any such underwriter, and stated to be specifically for use
therein; and provided, further that, the
indemnity agreement contained in this Section 2.6(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).
(b) To
the extent permitted by law, each Holder will, severally and not jointly, if
Registrable Securities held by such Holder are included in the securities as to
which such registration, qualification or compliance is being effected,
indemnify and hold harmless the Company, each of its directors, officers,
partners, legal counsel and accountants and 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, each other such Holder, and each of their officers,
directors and partners, and each person controlling each other such Holder,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on: (i) any untrue statement (or alleged
untrue statement) of a material fact contained or incorporated by reference in
any prospectus, offering circular or other document (including any related
registration statement, notification, or the like) incident to any such
registration, qualification or compliance, or (ii) 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 and such Holders, directors, officers, partners, legal counsel and
accountants, 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 such Holder and
stated to be specifically for use therein; provided, however, that the
obligations of such Holder hereunder shall not apply to amounts paid in
settlement of any such claims, losses, damages or liabilities (or actions in
respect thereof) if such settlement is effected without the consent of such
Holder (which consent shall not be unreasonably withheld); and provided that in no
event shall any indemnity under this Section 2.6 exceed the
net proceeds from the offering received by such Holder, except in the case of
fraud or willful misconduct by such Holder.
13
(c) Each
party entitled to indemnification under this Section 2.6 (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 sought, and shall permit the Indemnifying Party to assume the
defense of such claim or any litigation resulting therefrom; provided that counsel
for the Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably 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 2.6, to the
extent such failure is not prejudicial. 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
that 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. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with defense of such claim and litigation resulting
therefrom.
(d) If
the indemnification provided for in this Section 2.6 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 herein,
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. 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 opportunity to correct or prevent such
statement or omission. No person or entity will be required under
this Section 2.6(d)
to contribute any amount in excess of the net proceeds from the offering
received by such person or entity, except in the case of fraud or willful
misconduct by such person or entity. 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.
14
2.7 Information by
Holder.
Each Holder of Registrable Securities shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification, or compliance
referred to in this Section 2.
2.8 Restrictions on
Transfer.
(a) The
holder of each certificate representing Registrable Securities by acceptance
thereof agrees to comply in all respects with the provisions of this Section 2.8. Each
Holder agrees not to make any sale, assignment, transfer, pledge or other
disposition of all or any portion of the Restricted Securities, or any
beneficial interest therein, unless and until (x) the transferee thereof
has agreed in writing for the benefit of the Company to take and hold such
Restricted Securities subject to, and to be bound by, the terms and conditions
set forth in this Agreement, including, without limitation, this Section 2.8 and Section 2.10, except for
transfers permitted under Section 2.8(b), and
(y):
(i) There
is then in effect a registration statement under the Securities Act covering
such proposed disposition and such disposition is made in accordance with such
registration statement; or
(ii) Such
Holder shall have given prior written notice to the Company of such Holder’s
intention to make such disposition and shall have furnished the Company with a
detailed description of the manner and circumstances of the proposed
disposition, and, if requested by the Company, such Holder shall have furnished
the Company, at its expense, with (i) an opinion of counsel, reasonably
satisfactory to the Company, to the effect that such disposition will not
require registration of such Restricted Securities 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; provided, that, neither an opinion of
counsel nor a “no action” letter shall be required for transfers permitted under
Section 2.8(b). It
is agreed that the Company will not require opinions of counsel for transactions
made pursuant to Rule 144 except in unusual circumstances.
(b)
Permitted transfers include (i) a transfer not involving a change in
beneficial ownership, or (ii) in transactions involving the distribution
without consideration of Restricted Securities by any Holder to (x) a
parent, subsidiary or other affiliate of Holder that is a corporation,
(y) any of its partners, members or other equity owners, or retired
partners, retired members or other equity owners, or to the estate of any of its
partners, members or other equity owners or retired partners, retired members or
other equity owners, or (z) a venture capital fund that is controlled by or
under common control with one or more general partners or managing members of,
or shares the same management company with, such Holder, or (iii) transfers
in compliance with Rule 144(k), as long as the Company is furnished with
satisfactory evidence of compliance with such Rule; provided, in each case, that
the Holder thereof shall give written notice to the Company of such Holder’s
intention to effect such disposition and shall have furnished the Company with a
detailed description of the manner and circumstances of the proposed
disposition.
15
(c) Each
certificate representing Registrable Securities shall (unless otherwise
permitted by the provisions of this Agreement) be stamped or otherwise imprinted
with a legend substantially similar to the following (in addition to any legend
required under applicable state securities laws):
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES
LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER,
PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO (1) RESTRICTIONS ON
TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD IN THE EVENT OF A PUBLIC
OFFERING, AS SET FORTH IN AN INVESTORS’ RIGHTS AGREEMENT, AND (2) VOTING
RESTRICTIONS AS SET FORTH IN A VOTING AGREEMENT AMONG THE COMPANY AND THE
ORIGINAL HOLDERS OF THESE SHARES, COPIES OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE COMPANY.
The
Holders consent to the Company making a notation on its records and giving
instructions to any transfer agent of the Restricted Securities in order to
implement the restrictions on transfer established in this Section 2.8.
(d) The
first legend referring to federal and state securities laws identified in Section 2.8(c) hereof
stamped on a certificate evidencing the Restricted Securities and the stock
transfer instructions and record notations with respect to such Restricted
Securities shall be removed and the Company shall issue a certificate without
such legend to the holder of such Restricted Securities if (i) such
securities are registered under the Securities Act, or (ii) such holder
provides the Company with an opinion of counsel reasonably acceptable to the
Company to the effect that a public sale or transfer of such securities may be
made without registration under the Securities Act, or (iii) such holder
provides the Company with reasonable assurances, which may, at the option of the
Company, include an opinion of counsel satisfactory to the Company, that such
securities can be sold pursuant to Section (k) of Rule 144 under the
Securities Act.
2.9 Rule 144
Reporting.
With a view to making available the benefits of certain rules and regulations of
the Commission that may permit the sale of the Restricted Securities to the
public without registration, the Company agrees to use its commercially
reasonable efforts to:
16
(a) Make
and keep public information regarding the Company available as those terms are
understood and defined in Rule 144 under the Securities Act, at all times
from and after ninety (90) days following the effective date of the first
registration under the Securities Act filed by the Company for an offering of
its securities to the general public;
(b) File
with the Commission in a timely manner all reports and other documents required
of the Company under the Securities Act and the Exchange Act at any time after
it has become subject to such reporting requirements; and
(c) So
long as a Holder owns any Restricted Securities, furnish to the Holder forthwith
upon written request a written statement by the Company as to its compliance
with the reporting requirements of Rule 144 (at any time from and after
ninety (90) days following the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
so filed as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration.
2.10 Market Stand-Off
Agreement.
Each Holder hereby agrees that such Holder shall not sell or otherwise transfer,
make any short sale of, grant any option for the purchase of, or enter into any
hedging or similar transaction with the same economic effect as a sale, of any
Common Stock (or other securities) of the Company held by such Holder (other
than those included in the registration) during the one hundred eighty (180) day
period following the effective date of a registration statement of the Company
filed under the Securities Act or such other period as may be requested by the
Company or an underwriter to accommodate regulatory restrictions on (i) the
publication or other distribution of research reports and (ii) analyst
recommendations and opinions, including, but not limited to, the restrictions
contained in NASD Rule 2711(f)(4) or NYSE
Rule 472(f)(4). The obligations described in this Section 2.10 shall not
apply to a registration relating solely to employee benefit plans on
Form S-l or Form S-8 or similar forms that may be promulgated in the
future, or a registration relating solely to a transaction on Form S-4 or
similar forms that may be promulgated in the future. The Company may
impose stop-transfer instructions and may stamp each such certificate with the
second legend set forth in Section 2.8(c) hereof
with respect to the shares of Common Stock (or other securities) subject to the
foregoing restriction until the end of such one hundred eighty (180) day or
other period. Each Holder agrees to execute a market standoff
agreement with said underwriters in customary form consistent with the
provisions of this Section 2.10; provided, that, all
executive officers, directors and 5% stockholders enter into similar
agreements. Any discretionary waiver or termination of the
restrictions contained in such similar agreements by the Company or the
underwriter shall apply to all Holders (according to the total amount of
Registrable Securities owned by each Holder).
2.11 Delay of
Registration.
No Holder shall have any right to take any action to restrain, enjoin, or
otherwise delay any registration as the result of any controversy that might
arise with respect to the interpretation or implementation of this Section 2.
17
2.12
Transfer or Assignment of
Registration Rights.
The rights to cause the Company to register securities granted to a Holder by
the Company under this Section 2 may be
transferred or assigned by a Holder only to a transferee or assignee of not less
than 1,000,000 shares of Registrable Securities (as presently constituted and
subject to subsequent adjustments for stock splits, stock dividends, reverse
stock splits, and the like) or to partners of members of any Holder; provided that
(i) such transfer or assignment of Registrable Securities is effected in
accordance with the terms of Section 2.8 hereof, the
Right of First Refusal and Co-Sale Agreement (as defined in the Purchase
Agreement), and applicable securities laws, (ii) the Company is given
written notice at least ten (10) days prior to said transfer or assignment,
stating the name and address of the transferee or assignee and identifying the
securities with respect to which such registration rights are intended to be
transferred or assigned and (iii) the transferee or assignee of such rights
assumes in writing the obligations of such Holder under this Agreement,
including without limitation the obligations set forth in Section 2.10.
2.13
Limitations on Subsequent
Registration Rights.
From and after the date of this Agreement, the Company shall not, without the
prior written consent of a majority in interest of the Holders, enter into any
agreement with any holder or prospective holder of any securities of the Company
giving such holder or prospective holder any registration rights the terms of
which are pari passu with or senior to the registration rights granted to the
Holders hereunder.
2.14
Termination of Registration
Rights.
The right of any Holder to request registration or inclusion in any registration
pursuant to Section 2.1, 2.2 or 2.3 shall terminate on the
earlier of (i) such date, on or after the closing of the Company’s first
registered public offering of Common Stock, on which all shares of Registrable
Securities held or entitled to be held upon conversion by such Holder may
immediately be sold under Rule 144 during any ninety (90) day period, and
(ii) three (3) years after the closing of the Company’s Initial Public
Offering.
Section 3
Covenants of the
Company
The
Company hereby covenants and agrees, as follows:
3.1 Basic Information
Rights.
(a) Basic Financial
Information. The Company will furnish the following reports to
(i) each Holder of Series D Preferred Stock who owns at least 3,000,000 Shares
and/or Conversion Stock originally acquired by such Holder (as presently
constituted and subject to subsequent adjustments for stock splits, stock
dividends, reverse stock splits, and the like), (ii) each of ff Green Private
Equity Fund, LLC, Oliver Frankel, Ken Fried and Paul Holland who holds any
shares of Series D Preferred Stock, and (iii) each Holder of Series E Preferred
Stock who owns at least 2,000,000 Shares and/or Conversion Stock originally
acquired by such Holder (as presently constituted and subject to subsequent
adjustments for stock splits, stock dividends, reverse stock splits, and the
like) (each such holder a “Significant
Holder”):
(i) As
soon as practicable after the end of each fiscal year of the Company, and in any
event at least ninety (90) days prior to the beginning of the next fiscal year
of the Company, a consolidated balance sheet of the Company and its
subsidiaries, if any, as at the end of such fiscal year, and consolidated
statements of income and cash flows of the Company and its subsidiaries, if any,
for such year, prepared in accordance with U.S. generally accepted accounting
principles consistently applied, certified by independent public accountants of
recognized national standing (the “Auditors”) selected by the
Company and acceptable to the Company’s Board of Directors. The
Auditors will also provide a management letter in connection
therewith.
18
(ii)
Prior to the start of each fiscal year of the Company, an annual budget of the
Company for such year.
(iii) As
soon as practicable after the end of the first, second and third quarterly
accounting periods in each fiscal year of the Company, and in any event within
forty-five (45) days after the end of the first, second, and third quarterly
accounting periods in each fiscal year of the Company, an unaudited consolidated
balance sheet of the Company and its subsidiaries, if any, as of the end of each
such quarterly period, and unaudited consolidated statements of income and cash
flows of the Company and its subsidiaries, if any, for such period, prepared in
accordance with U.S. generally accepted accounting principles consistently
applied, subject to changes resulting from normal year-end audit adjustments,
together with a comparison to the Company’s budget.
(iv)
Within 30 days of the end of each month, an unaudited income statement and a
statement of cash flows and balance sheet for and as of the end of such month,
together with a comparison to the Company’s budget.
(iv) As
soon as practicable, and in any event no later forty-five (45) days after the
end of each fiscal year of the Company, a capitalization table (fully-diluted)
setting forth the number of issued and outstanding shares of Common Stock and
Preferred Stock of the Company, the number of reserved and outstanding options
to purchase Common Stock and the number of issued and outstanding warrants to
purchase Common Stock or Preferred Stock of the Company.
(b) The
Company shall permit each Significant Holder, at such Significant Holder’s
expense, to visit and inspect the Company’s properties and to examine its books
of account and records at such reasonable times and intervals as may be
requested by the Significant Holder. Each Significant Holder shall be
entitled to discuss the Company’s significant business issues with its officers
at mutually agreeable times.
(c) For
purposes of determining the minimum holdings pursuant to this Section 3, any
Significant Holder that is a partnership or limited liability company shall be
deemed to hold any Preferred Stock originally purchased by such Significant
Holder and subsequently distributed to constituent partners or members of such
Significant Holder, but which has not been resold by such partners or
members. If the partnership or limited liability company is still in
existence, the Company may satisfy any obligation to distribute reports to
individual partners of the partnership or members of a limited liability company
by delivering a single copy of each report to the partnership or limited
liability company as agent for the constituent partners or members.
19
3.2 Confidentiality.
Anything in this Agreement to the contrary notwithstanding, no Holder by reason
of this Agreement shall have access to any trade secrets or similar information
of the Company. The Company shall not be required to comply with any
information rights of Section 3 in respect of
any Holder whom the Company reasonably determines to be a competitor or an
officer or employee of a competitor. Each Holder acknowledges that
the information received by them pursuant to this Agreement may be confidential
and for its use only, and it will not use such confidential information in
violation of the Exchange Act or reproduce, disclose or disseminate such
information to any other person (other than its employees or agents having a
need to know the contents of such information, and its attorneys), except in
connection with the exercise of rights under this Agreement, unless the Company
has made such information available to the public generally or such Holder is
required to disclose such information by a governmental authority.
3.3 Stock Vesting and Independent
Appraisal.
Unless otherwise approved by the Board of Directors of the Company, all stock
options and other stock equivalents issued after the date of this Agreement to
employees, directors, consultants and other service providers shall be subject
to vesting as follows: (a) twenty-five percent (25%) of such stock shall
vest at the end of the first year following the earlier of the date of issuance
or such person’s services commencement date with the company, and
(b) seventy-five percent (75%) of such stock shall vest over the remaining
three (3) years. No stock option or other stock equivalent issued
after the date of this Agreement shall have the right to accelerate the vesting
described in this Section 3.3; provided, however, that certain
stock options or other stock equivalents may include accelerated vesting terms
only if such terms are approved by the Company’s Board of
Directors. The Company shall have a right to repurchase all unvested
shares at cost upon the termination of employment or services of such employees,
directors, consultants or other service providers. Within four (4)
months of the date of this Agreement, the Company shall present to the Board of
Directors an independent appraisal of the value of the Company’s Common Stock
that meets the requirements of Section 401(a)(28)(C) of the Internal Revenue
Code and the regulations thereunder.
3.4 Directors’ and Officers’ Liability
Insurance.
The Company shall use commercially reasonable efforts to maintain directors’ and
officers’ liability insurance with coverage limits in the amount of no less than
$3,000,000.
3.5 Key Man Life
Insurance.
The Company shall use commercially reasonable efforts to maintain a “key person”
term life insurance policy on the life of the Founder, in his capacity as a
founder and key employee of the Company, which shall name the Company as the
beneficiary.
3.6 Board
Meetings/Committees.
The Board of Directors of the Company shall meet at least once per
quarter. The Board of Directors of the Company shall establish a
Compensation Committee and an Audit Committee. Each of these
committees shall consist of three directors, and each such committee shall
include at least one Mutual Director and at least one Series D Director (as such
terms are defined in the Voting Agreement dated of even date
herewith. The Compensation Committee shall determine the compensation
for senior management of the Company each year. The Company shall pay
all direct and pre-approved travel expenses for each of the members of the Board
of Directors in connection with the fulfillment of their duties as members of
the Board of Directors.
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3.7Confidential Information and
Invention Assignment Agreement.
The Company shall require all employees and consultants to execute and deliver a
confidential information and invention assignment agreement in the form approved
by the Board.
3.8 Share Repurchase.
The Company may repurchase up to $1,000,000 worth of shares of its capital stock
as soon as practicable subsequent to the date hereof pursuant to terms and
conditions to be approved by the Board and subject to compliance with all
applicable laws; provided that at
least $8,000,000 of the proceeds from the sale of the shares of Series E
Preferred Stock under the Purchase Agreement is used for working capital and
general corporate purposes.
3.9 Issuance of Repurchased
Shares.
The Company shall not issue any of the
shares
repurchased pursuant to Section 3.8 above, without the approval of a majority of
the Board of Directors, including at least one of the Series D Directors (as
defined in the Certificate) and the Series E Director (as defined in the
Certificate).
3.10
Termination of
Covenants.
The covenants set forth in this Section 3 shall terminate
and be of no further force and effect after the closing of the Company’s Initial
Public Offering.
Section 4
Right of First
Refusal
4.1 Right of First Refusal to
Significant Holders. Subject to applicable securities laws, the
Company hereby grants to each Significant Holder, the right of first refusal to
purchase its pro rata share of New Securities (as defined in this Section 4.1(a)) which the
Company may, from time to time, propose to sell and issue after the date of this
Agreement. A Significant Holder’s pro rata share, for purposes of
this right of first refusal, is equal to the ratio of (a) the number of shares
of Common Stock owned by such Significant Holder immediately prior to the
issuance of New Securities (assuming full conversion of the Shares and exercise
of all outstanding convertible securities, rights, options and warrants,
directly or indirectly, into Common Stock held by said Significant Holder) to
(b) the total number of shares of Common Stock outstanding immediately
prior to the issuance of New Securities (assuming full conversion of the Shares
and exercise of all outstanding convertible securities, rights, options and
warrants, directly or indirectly, held by all of the Significant
Holders).
(a)
“New Securities” shall
mean any capital stock (including Common Stock and/or Preferred Stock) of the
Company whether now authorized or not, and rights, convertible securities,
options or warrants to purchase such capital stock, and securities of any type
whatsoever that are, or may become, exercisable or convertible into capital
stock; provided
that the term “New
Securities” does not include:
(i) the
Shares and the Conversion Stock;
(ii) an
aggregate amount of up to 5,976,126 shares of Common Stock (or such greater
amount as approved by the Board of Directors, and, until one year from the date
hereof, the Series E Director (as defined below)) securities issued or issuable
to officers, employees, directors, consultants, placement agents, and other
service providers of the Company (or any subsidiary) pursuant to stock grants,
option plans, purchase plans, agreements or other employee stock incentive
programs or arrangements approved by the Board of Directors of the
Company;
21
(iii)
securities issued pursuant to the conversion or exercise of any outstanding
convertible or exercisable securities as of this date of this
Agreement;
(iv)
securities issued or issuable as a dividend or distribution on Preferred Stock
of the Company or pursuant to any event for which adjustment is made pursuant to
paragraph 4(e), 4(f) or 4(g) of Article V of the Amended and Restated
Certificate of Incorporation of the Company (the “Certificate”);
(v)
securities offered pursuant to a bona fide, firmly underwritten public offering
pursuant to a registration statement filed under the Securities
Act;
(vi)
securities issued or issuable pursuant to the acquisition of another corporation
by the Company by merger, purchase of substantially all of the assets or other
reorganization or to a joint venture agreement, provided, that such
issuances are approved by the Board of Directors of the Company;
(vii)
securities issued or issuable to banks, equipment lessors or other financial
institutions pursuant to a commercial leasing or debt financing transaction
approved by the Board of Directors of the Company;
(viii)
securities issued or issuable in connection with sponsored research,
collaboration, technology license, development, OEM, marketing or other similar
agreements or strategic partnerships approved by the Board of Directors of the
Company;
(ix)
securities issued to suppliers or third party service providers in connection
with the provision of goods or services pursuant to transactions approved by the
Board of Directors of the Company;
(x)
securities issued or issuable in connection with any settlement of any action,
suit, proceeding or litigation approved by the Board of Directors of the
Company;
(xi)
securities of the Company which are otherwise excluded from this Section 4.1 by
the affirmative unanimous vote of the Board of Directors of the Company to
exclude such securities from this Section 4.1; and
(xii) any
right, option or warrant to acquire any security convertible into the securities
excluded from the definition of New Securities pursuant to subsections (i)
through (xi) above.
(b) In
the event the Company proposes to undertake an issuance of New Securities, it
shall give each Significant Holder written notice of its intention, describing
the type of New Securities, and their price and the general terms upon which the
Company proposes to issue the same. Each Significant Holder shall
have ten (10) business days after any such notice is mailed or delivered to
agree to purchase such Holder’s pro rata share of such New Securities and to
indicate whether such Holder desires to exercise its over allotment option for
the price and upon the terms specified in the notice by giving written notice to
the Company, in substantially the form attached hereto as Schedule 1, and
stating therein the quantity of New Securities to be purchased.
22
(c) In
the event the Holders fail to exercise fully the right of first refusal and over
allotment rights, if any within said ten (10) business day period (the “Election Period”), the Company
shall have ninety (90) days thereafter to sell or enter into an agreement
(pursuant to which the sale of New Securities covered thereby shall be closed,
if at all, within ninety (90) days from the date of said agreement) to sell that
portion of the New Securities with respect to which the Significant Holders’
right of first refusal option set forth in this Section 4.1 was not
exercised, at a price and upon terms no more favorable to the purchasers thereof
than specified in the Company’s notice to Significant Holders delivered pursuant
to Section 4.1(b). In
the event the Company has not sold within such ninety (90) day period following
the Election Period, or such ninety (90) day period following the date of said
agreement, the Company shall not thereafter issue or sell any New Securities,
without first again offering such securities to the Significant Holders in the
manner provided in this Section 4.1.
(d)
Notwithstanding the foregoing, the right of first refusal in this Section 4
shall not be applicable to with respect to any Significant Holder and any
subsequent issuance of securities if, (i) at the time of such subsequent
issuance of securities, such Significant Holder is not an accredited investor as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act, and
(ii) such subsequent issuance of securities is otherwise being offered only to
accredited investors as defined in Rule 501(a) of Regulation D promulgated under
the Securities Act.
(e) The
right of first refusal granted under this Agreement shall expire upon, and shall
not be applicable to the Company’s Initial Public Offering.
Section 5
Miscellaneous
5.1 Amendment.
Except as expressly provided herein, neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated other than by a written
instrument referencing this Agreement and signed by the Company and the Holders
holding a majority of the Registrable Securities then outstanding (excluding any
of such shares that have been sold to the public or pursuant to Rule 144);
provided, however, that Holders
purchasing shares of Series E Preferred Stock in a Closing after the
Initial Closing (each as defined in the Purchase Agreement) may become parties
to this Agreement, by executing a counterpart of this Agreement without any
amendment of this Agreement pursuant to this paragraph or any consent or
approval of any other Holder; and provided, further, that if any
amendment, waiver, discharge or termination operates in a manner that treats any
Holder different from other Holders, the consent of such Holder shall also be
required for such amendment, waiver, discharge or termination. Any
such amendment, waiver, discharge or termination effected in accordance with
this paragraph shall be binding upon each Holder and each future holder of all
such securities of Holder. Each Holder acknowledges that by the
operation of this paragraph, the holders of a majority of the Registrable
Securities then outstanding (excluding any of such shares that have been sold to
the public or pursuant to Rule 144) will have the right and power to
diminish or eliminate all rights of such Holder under this
Agreement.
23
5.2 Notices.
All notices and other communications required or permitted hereunder shall be in
writing and shall be mailed by registered or certified mail, postage prepaid,
sent by facsimile or electronic mail or otherwise delivered by hand or by
messenger addressed:
(a) if to
an Investor, at the Investor’s address, facsimile number or electronic mail
address as shown in the Company’s records, as may be updated in accordance with
the provisions hereof, with one copy sent to Mark Roeder, Latham & Watkins
LLP, 140 Scott Drive, Menlo Park, California94025;
(b) if to
any Holder, at such address, facsimile number or electronic mail address as
shown in the Company’s records, or, until any such holder so furnishes an
address, facsimile number or electronic mail address to the Company, then to and
at the address of the last holder of such shares for which the Company has
contact information in its records; or
(c) if to
the Company, one copy should be sent to 1601 Cloverfield Blvd.,
Suite 620, Santa Monica, California90404, Attn: Chief Executive Officer,
or at such other address as the Company shall have furnished to the Investors,
with a copy to Herbert Fockler, Wilson Sonsini Goodrich & Rosati, P.C.,
650 Page Mill Road, Palo Alto, California94304.
Each such
notice or other communication shall for all purposes of this Agreement be
treated as effective or having been given when delivered if delivered
personally, or, if sent by mail, at the earlier of its receipt or 72 hours
after the same has been deposited in a regularly maintained receptacle for the
deposit of the United States mail, addressed and mailed as aforesaid or, if sent
by facsimile, upon confirmation of facsimile transfer or, if sent by electronic
mail, upon confirmation of delivery when directed to the electronic mail address
set forth on the Schedule of Investors.
5.3 Governing Law.
This Agreement shall be governed in all respects by the internal laws of the
State of California as applied to agreements entered into among California
residents to be performed entirely within California, without regard to
principles of conflicts of law.
5.4 Successors and
Assigns.
Except as otherwise expressly provided herein, this Agreement, and any and all
rights, duties and obligations hereunder, shall not be assigned, transferred,
delegated or sublicensed by any Investor without the prior written consent of
the Company. Any attempt by an Investor without such permission to
assign, transfer, delegate or sublicense any rights, duties or obligations that
arise under this Agreement shall be void. Subject to the foregoing
and except as otherwise provided herein, the provisions of this Agreement shall
inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto.
5.5 Entire Agreement.
This Agreement and the exhibits hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and supersedes in its entirety the Prior Rights Agreement, which shall
have no further force and effect. No party hereto shall be liable or
bound to any other party in any manner with regard to the subjects hereof or
thereof by any warranties, representations or covenants except as specifically
set forth herein. As of the date hereof, the Prior Agreement shall
terminate and be of no further force or effect and shall be superseded and
replaced in its entirety by this Agreement.
24
5.6 Delays or
Omissions.
Except as expressly provided herein, no delay or omission to exercise any right,
power or remedy accruing to any party to this Agreement upon any breach or
default of any other party under this Agreement shall impair any such right,
power or remedy of such non-defaulting 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 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 party to this Agreement, shall be cumulative and not
alternative.
5.7 Severability.
If any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, portions of such
provision, or such provision in its entirety, to the extent necessary, shall be
severed from this Agreement, and such court will replace such illegal, void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the same economic, business and other
purposes of the illegal, void or unenforceable provision. The balance
of this Agreement shall be enforceable in accordance with its
terms.
5.8 Titles and
Subtitles.
The titles and subtitles used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this
Agreement. All references in this Agreement to sections, paragraphs
and exhibits shall, unless otherwise provided, refer to sections and paragraphs
hereof and exhibits attached hereto.
5.9 Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be enforceable against the parties that execute such counterparts, and all
of which together shall constitute one instrument.
5.10
Telecopy Execution and
Delivery. A
facsimile, telecopy or other reproduction of this Agreement may be executed by
one or more parties hereto and delivered by such party by facsimile or any
similar electronic transmission device pursuant to which the signature of or on
behalf of such party can be seen. Such execution and delivery shall
be considered valid, binding and effective for all purposes. At the
request of any party hereto, all parties hereto agree to execute and deliver an
original of this Agreement as well as any facsimile, telecopy or other
reproduction hereof.
5.11
Jurisdiction;
Venue.
With respect to any disputes arising out of or related to this Agreement, the
parties consent to the exclusive jurisdiction of, and venue in, the state courts
in Santa Clara County in the State of California (or in the event of exclusive
federal jurisdiction, the courts of the Northern District of
California).
25
5.12
Further
Assurances.
Each party hereto agrees to execute and deliver, by the proper exercise of its
corporate, limited liability company, partnership or other powers, all such
other and additional instruments and documents and do all such other acts and
things as may be necessary to more fully effectuate this Agreement.
5.13
Termination Upon Change of
Control.
Notwithstanding anything to the contrary herein, this Agreement (excluding any
then existing obligations) shall terminate upon (a) the acquisition of the
Company by another entity by means of any transaction or series of related
transactions to which the Company is party (including, without limitation, any
stock acquisition, reorganization, merger or consolidation but excluding any
sale of stock for capital raising purposes) other than a transaction or series
of transactions in which the holders of the voting securities of the Company
outstanding immediately prior to such transaction continue to retain (either by
such voting securities remaining outstanding or by such voting securities being
converted into voting securities of the surviving entity), as a result of shares
in the Company held by such holders prior to such transaction, at least fifty
percent (50%) of the total voting power represented by the voting securities of
the Corporation or such surviving entity outstanding immediately after such
transaction or series of transactions; or (b) a sale, lease or other
conveyance of all substantially all of the assets of the Company.
5.14
Conflict.
In the event of any conflict between the terms of this Agreement and the
Company’s Certificate or its Bylaws, the terms of the Company’s Certificate or
its Bylaws, as the case may be, will control.
5.15
Attorneys’
Fees.
In the event that any suit or action is instituted to enforce any provision in
this Agreement, the prevailing party in such dispute shall be entitled to
recover from the losing party such reasonable fees and expenses of attorneys and
accountants, which shall include, without limitation, all fees, costs and
expenses of appeals.
5.16
Aggregation of
Stock.
All securities held or acquired by affiliated entities (including affiliated
venture capital funds) or persons shall be aggregated together for purposes of
determining the availability of any rights under this Agreement.
5.17
Transfer of
Rights. The rights granted under Sections 3 and 4 of this
Agreement may be assigned to any transferee or assignee, other than a competitor
or potential competitor of the Company (as determined in good faith by the Board
of Directors), in connection with any transfer or assignment of Registrable
Securities by the Holder, provided that: (a) such transfer is otherwise effected
in accordance with applicable securities laws and the terms of this Agreement;
(b) written notice is promptly given to the Company; and (c) such transferee or
assignee agrees in writing to be bound by the provisions of this
Agreement. Notwithstanding the foregoing, the rights granted to the
Holders hereunder may be assigned without compliance with item (b) above to (w)
any constituent partner, retired partner, or member of a Holder which is a
partnership or limited liability company; (x) a family member of a Holder or
trust for the benefit of a Holder, the spouse of a Holder or issue of a Holder;
or (y) any affiliate (as such term is defined in Rule 405 of the Securities Act)
of a Holder that is a corporation, partnership or limited liability company
(including a venture capital fund that is controlled by or under common control
with one or more general partners or managing members of, or which shares the
same management company with, such Holder).
(Remainder
of Page Intentionally Left Blank)
26
IN
WITNESS WHEREOF, the parties hereto have executed this Second Amended and
Restated Investors’ Rights Agreement effective as of the day and year first
above written.
CORNERSTONE
ONDEMAND, INC.
a Delaware corporation
By:
/s/ Adam
Miller
Name:
Adam Miller
Title:
President and Chief Executive Officer
FOUNDER
/s/
Adam Miller
Adam
Miller
IN
WITNESS WHEREOF, the parties hereto have executed this Second Amended and
Restated Investors’ Rights Agreement effective as of the day and year first
above written.
INVESTOR:
MERITECH CAPITAL PARTNERS III
L.P.
By:
Meritech
Capital Associates III L.L.C.
its
General Partner
By:
Meritech
Management Associates III L.L.C.
a
managing member
By:
/s/
Mike Gordon
Mike
Gordon, a managing director
MERITECH CAPITAL
AFFILIATES III L.P.
By:
Meritech
Capital Associates III L.L.C.
its
General Partner
By:
Meritech
Management Associates III L.L.C.
a
managing member
By:
/s/
Mike Gordon
Mike
Gordon, a managing director
IN
WITNESS WHEREOF, the parties hereto have executed this Second Amended and
Restated Investors’ Rights Agreement effective as of the day and year first
above written.
INVESTOR:
BESSEMER VENTURE PARTNERS VI
L.P.
By:
Deer
VI & Co. LLC, General Partner
By:
/s/
J. Edmund Colloton
J.
Edmund Colloton, Executive Manager
BESSEMER VENTURE PARTNERS
CO-
INVESTMENT
L.P.
By:
Deer
VI & Co. LLC, General Partner
By:
/s/
J. Edmund Colloton
J.
Edmund Colloton, Executive Manager
IN
WITNESS WHEREOF, the parties hereto have executed this Second Amended and
Restated Investors’ Rights Agreement effective as of the day and year first
above written.
INVESTOR:
BAY PARTNERS XI,
L.P.
By:
Bay
Management Company XI, LLC,
Its
General Partner
By:
/s/
Neil Sadaranganey
Name:
Neil Sadaranganey
Title:
Manager
BAY PARTNERS XI PARALLEL FUND,
L.P.
By:
Bay
Management Company XI, LLC,
Its
General Partner
By:
/s/
Neil Sadaranganey
Name:
Neil Sadaranganey
Title:
Manager
IN
WITNESS WHEREOF, the parties hereto have executed this Second Amended and
Restated Investors’ Rights Agreement effective as of the day and year first
above written.
INVESTOR:
ff
BLUE PRIVATE EQUITY FUND, L.P.
By:
/s/ John
Frankel
Name:
John
Frankel
Title:
Manager
IN
WITNESS WHEREOF, the parties hereto have executed this Second Amended and
Restated Investors’ Rights Agreement effective as of the day and year first
above written.
INVESTOR:
Ken
Fried
/s/ Ken
Fried
IN
WITNESS WHEREOF, the parties hereto have executed this Second Amended and
Restated Investors’ Rights Agreement effective as of the day and year first
above written.
INVESTOR:
Paul
Holland
/s/ Paul
Holland
IN
WITNESS WHEREOF, the parties hereto have executed this Second Amended and
Restated Investors’ Rights Agreement effective as of the day and year first
above written.
EXISTING
INVESTOR:
BESSEMER VENTURE PARTNERS VI
L.P.
BESSEMER
VENTURE PARTNERS VI
INSTITUTIONAL
L.P.
BESSEMER
VENTURE PARTNERS CO-
INVESTMENT
L.P.
By:
Deer
VI & Co. LLC,
General
Partner
By:
/s/ J.
Edmund Colloton
Name:
J.
Edmund Colloton
Title:
Executive
Manager
IN
WITNESS WHEREOF, the parties hereto have executed this Second Amended and
Restated Investors’ Rights Agreement effective as of the day and year first
above written.
EXISTING
INVESTOR:
BAY PARTNERS XI,
L.P.
BAY PARTNERS XI PARALLEL FUND, L.P.
By:
Bay
Management Company XI, LLC,
General
Partner
By:
/s/ Neil
Sadaranganey
Name:
Neil
Sadaranganey
Title:
Manager
IN
WITNESS WHEREOF, the parties hereto have executed this Second Amended and
Restated Investors’ Rights Agreement effective as of the day and year first
above written.
HOLDER:
COMERICA
VENTURES INCORPORATED
By:
/s/ LaReeda
Rentie
Name:
LaReeda
Rentie
Title:
First
Level Officer
EXHIBIT
A
INVESTORS
Meritech
Capital Partners III, L.P.
Meritech
Capital Affiliates III, L.P.
Bessemer
Venture Partners VI L.P.
Bessemer
Venture Partners Institutional L.P.
Bessemer
Venture Partners Co-Investment L.P.
Bay
Partners XI, L.P.
Bay
Partners XI Parallel Fund, L.P.
ff Blue
Private Equity Fund, L.P.
Ken
Fried
Paul
Holland
EXHIBIT
B
EXISTING
INVESTORS
Comerica
Ventures Incorporated
Bessemer
Venture Partners VI L.P.
Bessemer
Venture Partners VI Institutional L.P.
Bessemer
Venture Partners Co-Investment L.P.
Bay
Partners XI, L.P.
Bay
Partners XI Parallel Fund, L.P.
Ilan
Kaufthal
Ivan
Lustig
Mark
Baker
Paul
Gersh
Tri-Gran
Investments, Inc.
Ken
Fried
CyberU
Investment Alliance LLC
Ken
Friedman
David
Jackson
John
Frankel
Oliver
Frankel
Paul
Holland
Alliance
Trust Pensions Limited ATFSIPP
SCHEDULE
1
NOTICE
AND WAIVER/ELECTION OF
RIGHT
OF FIRST REFUSAL
I
do hereby waive or exercise, as indicated below, my rights of first refusal
under the Second Amended and Restated Investors’ Rights Agreement dated as of
_____________ (the “Agreement”):
1. Waiver
of 10 Days’ Notice Period in Which to Exercise Right of First
Offer: (please check
only one)
( )
WAIVE
in full, on behalf of all Holders, the 10-day notice period provided to
exercise my right of first refusal granted under the
Agreement.
( )
DO
NOT WAIVE the notice period described
above.
2. Issuance
and Sale of New Securities: (please check only
one)
( )
WAIVE
in full the right of first refusal granted under the Agreement with
respect to the issuance of the New
Securities.
( )
ELECT
TO PARTICIPATE in $__________ [PLEASE PROVIDE AMOUNT] in New Securities
proposed to be issued by Cornerstone OnDemand, Inc., representing less
than my pro rata portion of the aggregate of $[____] in New Securities
being offered in the financing.
( )
ELECT
TO PARTICIPATE in $__________ in New Securities proposed to be issued by
Company X, representing my full pro rata portion of the aggregate of
$[____] in New Securities being offered in the
financing.
( )
ELECT
TO PARTICIPATE in my full pro rata portion of the aggregate of $[____] in
New Securities being made available in the financing and, to the extent
available, the greater of (x) an additional $__________ [PLEASE
PROVIDE AMOUNT] or (y) my pro rata portion of any remaining
investment amount available in the event other Significant Holders do not
exercise their full rights of first refusal with respect to the $[____] in
New Securities being offered in the
financing.
Date: ___________,
20__
Signature of
Stockholder or Authorized Signatory
Title,
if applicable
This
is neither a commitment to purchase nor a commitment to issue the New Securities
described above. Such issuance can only be made by way of definitive
documentation related to such issuance. Cornerstone OnDemand, Inc.
will supply you with such definitive documentation upon request or if you
indicate that you would like to exercise your first offer rights in whole or in
part.
Dates Referenced Herein and Documents Incorporated by Reference
