SDWG BOARD MEMBER DOES
NOT OCCUPY A SEAT ON THE BOARD, A REPRESENTATIVE OF SDWG, TO ATTEND ALL MEETINGS
OF THE BOARD IN A NONVOTING OBSERVER CAPACITY AND, IN THIS RESPECT, WILL GIVE
EACH SUCH REPRESENTATIVE COPIES OF ALL NOTICES, MINUTES, CONSENTS, AND OTHER
MATERIALS THAT IT PROVIDES TO ITS DIRECTORS; PROVIDED, HOWEVER, THAT EACH SUCH
REPRESENTATIVE SHALL AGREE TO HOLD IN CONFIDENCE AND TRUST AND TO ACT IN A
FIDUCIARY MANNER WITH RESPECT TO ALL INFORMATION SO PROVIDED, INCLUDING
MAINTAINING SUCH INFORMATION IN CONFIDENCE; AND PROVIDED FURTHER, THAT THE
COMPANY RESERVES THE RIGHT TO WITHHOLD ANY INFORMATION AND TO EXCLUDE EACH SUCH
REPRESENTATIVE FROM ANY MEETING OR PORTION THEREOF IF ACCESS TO SUCH INFORMATION
OR ATTENDANCE AT SUCH MEETING COULD ADVERSELY AFFECT THE ATTORNEY-CLIENT
PRIVILEGE BETWEEN THE COMPANY AND ITS COUNSEL.
THE INITIAL HP OBSERVER SHALL BE
CRAIG SCHAUNAMAN.
IF MR. SCHAUNAMAN IS UNABLE OR UNWILLING TO SERVE AS THE HP
OBSERVER, SDWG SHALL, IN ITS SOLE DISCRETION AND FOR THE BENEFIT OF THE MEMBERS
OF HP, DESIGNATE ANOTHER INDIVIDUAL TO SERVE AS THE HP OBSERVER.
3.3
TERMINATION OF BOARD RIGHTS.
UNLESS TERMINATED EARLIER BY REASON
OF FAILURE TO MAINTAIN THE OWNERSHIP PERCENTAGE SET FORTH IN SECTION 3.1, THE
COVENANTS SET FORTH IN SECTION 3.1 SHALL TERMINATE AND BE OF NO FURTHER FORCE OR
EFFECT ON THE EARLIER TO OCCUR OF (A) THE THIRD ANNIVERSARY OF THE DATE OF THIS
AGREEMENT OR (B) IMMEDIATELY BEFORE THE CONSUMMATION OF THE IPO.
3.4
TERMINATION OF OBSERVER RIGHTS.
THE COVENANTS SET FORTH IN
SECTION 3.2 SHALL TERMINATE AND BE OF NO FURTHER FORCE OR EFFECT ON THE EARLIER
TO OCCUR OF (A) THE THIRD
16
anniversary of the date of this Agreement, (b) immediately before the
consummation of the IPO, or (c) the termination of any obligations to effect the
Second Closing (as defined in the Purchase Agreement) pursuant to Section 10.4
of the Purchase Agreement.
3.5
CONFIDENTIALITY.
EACH HOLDER AGREES THAT SUCH HOLDER WILL KEEP
CONFIDENTIAL AND WILL NOT DISCLOSE, DIVULGE, OR USE FOR ANY PURPOSE (OTHER THAN
TO MONITOR ITS INVESTMENT IN THE COMPANY) ANY CONFIDENTIAL INFORMATION OBTAINED
FROM THE COMPANY PURSUANT TO THE TERMS OF THIS AGREEMENT (INCLUDING NOTICE OF
THE COMPANY'S INTENTION TO FILE A REGISTRATION STATEMENT), UNLESS SUCH
CONFIDENTIAL INFORMATION (A) IS KNOWN OR BECOMES KNOWN TO THE PUBLIC IN GENERAL
(OTHER THAN AS A RESULT OF A BREACH OF THIS SECTION 3.5 BY SUCH HOLDER), (B) IS
OR HAS BEEN INDEPENDENTLY DEVELOPED OR CONCEIVED BY THE HOLDER WITHOUT USE OF
THE COMPANY'S CONFIDENTIAL INFORMATION, OR (C) IS OR HAS BEEN MADE KNOWN OR
DISCLOSED TO THE HOLDER BY A THIRD PARTY WITHOUT KNOWLEDGE BY THE HOLDER OF A
BREACH OF ANY OBLIGATION OF CONFIDENTIALITY SUCH THIRD PARTY MAY HAVE TO THE
COMPANY; PROVIDED, HOWEVER, THAT AN HOLDER MAY DISCLOSE CONFIDENTIAL INFORMATION
(I) TO ITS ATTORNEYS, ACCOUNTANTS, CONSULTANTS, AND OTHER PROFESSIONALS TO THE
EXTENT NECESSARY TO OBTAIN THEIR SERVICES IN CONNECTION WITH MONITORING ITS
INVESTMENT IN THE COMPANY; (II) TO ANY PROSPECTIVE PURCHASER OF ANY REGISTRABLE