Document:

Exhibit 10.2

 

EXECUTION VERSION

 

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of September 13, 2017, by and between RiceBran Technologies, a California corporation (the “Company”), and Continental Grain Company, a Delaware corporation (including its successors and assigns, the “Investor” and, together with the Company, the “Parties” and each, individually, a “Party”).

WHEREAS, in connection with the Common Stock Purchase Agreement, dated as of the date hereof and entered into by the Company and the Investor (the “Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions of the Purchase Agreement, to issue and sell to the Investor shares of common stock of the Company, no par value per share (the “Common Stock”);

WHEREAS, the execution of this Agreement on or before the Closing is a condition to the Company and the Investor’s mutual obligations at Closing under the Purchase Agreement; and

WHEREAS, to induce the Investor to consummate the transactions contemplated by the Purchase Agreement, the Investor and the Company hereby agree that this Agreement shall govern the rights of the Investor to, and the obligation of the Company to provide, certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “1933 Act”), and applicable state securities laws.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the premises and mutual agreements, representations and warranties, provisions and covenants contained herein, the Parties, intending to be legally bound hereby, agree as follows:

1.          Definitions.  Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement.  As used in this Agreement, the following terms shall have the following meanings:

“1933 Act” shall have the meaning set forth in the Recitals.

“Agreement” shall have the meaning set forth in the Preamble.

“Common Stock” shall have the meaning set forth in the Recitals.

“Company” shall have the meaning set forth in the Preamble.

“Effectiveness Period” means the period from and after the effectiveness of any Registration Statement until the date that all Registrable Securities covered by such Registration Statement have been sold, thereunder or pursuant to Rule 144.

 

“Holder” or “Holders” means any Person owning of record the Shares or Registrable Securities that have not been sold to the public, or any assignee of record of such Shares or Registrable Securities to whom the registration rights conferred by this Agreement have been duly and validly transferred in accordance with Section 9(g).

“Initial Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.

“Investor” shall have the meaning set forth in the Preamble.

“Liquidated Damages” shall have the meaning set forth in Section 6.

“Non-Registration Event” shall have the meaning set forth in Section 6.

“Parties” or “Party” shall have the meaning set forth in the Preamble.

“Pro Rata Portion” means, with respect to each Holder requesting that its shares be sold in a Public Offering, a number of such shares equal to the aggregate number of Registrable Securities to be sold in such Public Offering (excluding any shares to be registered or sold for the account of the Company) multiplied by a fraction, the numerator of which is the aggregate number of Registrable Securities held by such Holder, and the denominator of which is the aggregate number of Registrable Securities held by all Holders requesting that their Registrable Securities be sold in such Public Offering.

“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the SEC pursuant to the 1933 Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

“Public Offering” means the offer and sale of Registrable Securities for cash pursuant to an effective Registration Statement under the 1933 Act (other than a Registration Statement on Form S-4 or Form S-8 or any successor form).

“Purchase Agreement” shall have the meaning set forth in the Preamble.

“Required Effectiveness Date” means, with respect to the Initial Registration Statement required to be filed hereunder, the 60th calendar day following the Required Filing Date (or the 90th calendar day after the Required Filing Date in the event that such Registration Statement is subject to a full review by the SEC) and with respect to any additional Registration Statements which may be required pursuant to Section 2, the 90th calendar day following the date on which an additional Registration Statement is required to be filed hereunder (or the 120th calendar day following the date on which an additional Registration Statement is required to be filed hereunder in the event that such Registration Statement is subject to a full review by the SEC).

 

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“Required Filing Date” means, with respect to the Initial Registration Statement required hereunder, the 45th calendar day following the Closing Date and, with respect to any additional Registration Statements which may be required pursuant to Section 2, the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities.

“Registrable Securities” means, as of any date of determination, (i) the Common Stock issued to the Investors under the Purchase Agreement and (ii) any securities issued as (or issuable upon the conversion or exercise of any right or other security which is issued as) a dividend or other distribution, stock split, recapitalization or similar event with respect to the foregoing; provided, however, that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (x) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by the SEC under the 1933 Act and such Registrable Securities have been disposed of by the Holder in accordance with such effective Registration Statement or (y) such Registrable Securities have been previously sold pursuant to and in accordance with Rule 144.

“Registration Expenses” has the meaning set forth in Section 7.

“Registration Statement” means any registration statement required to be filed hereunder pursuant to Section 2, including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.

“Rule 415” means Rule 415 promulgated by the SEC pursuant to the 1933 Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule.

“SEC” means the Securities and Exchange Commission.

“SEC Guidance” means (i) any publicly available written or oral guidance of the SEC staff, or any comments, requirements or requests of the SEC staff and (ii) the 1933 Act.

“Underwritten Takedown” means an underwritten Public Offering pursuant to an effective Registration Statement.

2.          Registration Statement Requirements.

(a)        The Company shall file with the SEC a Form S-3 registration statement (or such other form that it is eligible to use) in order to register all or such portion of the Registrable Securities as permitted by the SEC (provided that the Company shall use diligent efforts to advocate with the SEC for the registration of all of the Registrable Securities) pursuant to Rule 415 for resale and distribution under the 1933 Act on or before the Required Filing Date and use its best efforts to cause the Registration Statement to be declared effective no later than the Required Effectiveness Date.  The Form S-3 shall contain substantially the “Plan of Distribution” attached hereto as Annex B.

 

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(b)        The Company will use its best efforts to keep each Registration Statement continuously effective under the 1933 Act for the duration of the Effectiveness Period.

(c)        In the event that the Company is required by the SEC to cutback the number of shares being registered in the Registration Statement pursuant to Rule 415, then the Company shall reduce the Registrable Securities pro rata, and unless otherwise directed in writing by the Holders as to their Registrable Securities, the number of Registrable Securities and other securities to be registered on such Registration Statement will first be reduced by securities included in such Registration Statement that are not Registrable Securities.  Notwithstanding anything to the contrary contained in this Section 2, if the Company receives comments from the SEC with respect to the Registration Statement, and following discussions with and responses to the SEC in which the Company uses its commercially reasonable efforts and time to cause as many Registrable Securities for as many Holders as possible to be included in the Registration Statement filed pursuant to Section 2 without characterizing any Holder as an underwriter, the Company is unable to cause the inclusion of all Registrable Securities in such Registration Statement, then the Company may, following not less than five (5) Trading Days prior written notice to the Holders, (x) remove from the Registration Statement the minimum number of Registrable Securities (the “Cut Back Shares”) and/or (y) agree to such restrictions and limitations on the registration and resale of the Registrable Securities, in each case as the SEC may require in order for the SEC to allow such Registration Statement to become effective (collectively, the “SEC Restrictions”).  Unless the SEC Restrictions otherwise require, any cut-back imposed pursuant to this Section 2 shall be allocated among the Registrable Securities of the Holders on a pro rata basis.  No liquidated damages under Section 6 shall accrue on or as to any Cut Back Shares, and the Required Effectiveness Date with respect to such additional Registration Statement including the Cutback Shares will be tolled, until such time as the Company is able to effect the registration of the Cut Back Shares in accordance with any SEC Restrictions (such date, the “Restriction Termination Date”).  From and after the Restriction Termination Date, all provisions of this Section 2 (including, without limitation, the liquidated damages provisions under Section 6, subject to tolling as provided above) shall again be applicable to the Cut Back Shares (which, for avoidance of doubt, retain their character as Registrable Securities) so that the Company will be required to file with and cause to be declared effective by the SEC such additional Registration Statements in the time frames set forth herein as necessary to ultimately cause to be covered by effective Registration Statements all Registrable Securities (if such Registrable Securities cannot at such time be resold by the Holders thereof pursuant to Rule 144).  The Company may only file an additional Registration Statement under this Section 2 only if the Initial Registration Statement has been declared effective.

(d)        If Form S-3 is not available for registration of the resale of the Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available; provided, that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as the Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC.

 

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(e)         Notwithstanding anything to the contrary contained herein, in no event shall the Company be permitted to name any Holder or affiliate of a Holder as any underwriter without the prior written consent of such Holder.  The Company may disclose the status of any holder that is, or is affiliated with, broker-dealer.

3.          Registration Takedown.

(a)        At any time after the first (1st) anniversary of the date hereof and during which the Company has an effective Registration Statement, by notice to the Company specifying the intended method or methods of disposition thereof, a Holder may make a written request (a “Takedown Request”) to the Company to effect an Underwritten Takedown, of all or portion of the Holder’s Registrable Securities that are covered by such Registration Statement (stating the approximate number or range of Registrable Securities to be included in the Public Offering), and as soon as practicable the Company shall amend or supplement Registration Statement for such purpose.

(b)        Promptly upon receipt of a Takedown Request (but in no event more than two (2) Business Days thereafter) for any Underwritten Takedown, the Company shall deliver a notice (a “Takedown Notice”) to each other Holder with Registrable Securities covered by the applicable Registration Statement, or to all other Holders if such Registration Statement is undesignated (each a “Potential Takedown Participant”).  The Takedown Notice shall offer each such Potential Takedown Participant the opportunity to include in any Underwritten Takedown that number of Registrable Securities as each such Potential Takedown Participant may request in writing.  The Company shall include in the Underwritten Takedown all such Registrable Securities with respect to which the Company has received written requests for inclusion therein no later than 9:00 a.m., New York City time, on the second Business Day immediately following the Takedown Notice Delivery Time; it being understood that for the purposes of this Section 3(b), the “Takedown Notice Delivery Time” shall be deemed to be the date of delivery of such notice if it is delivered to Holders at or prior to 12:00 p.m. New York City time and shall be deemed to be the business day immediately following delivery of such notice if it is delivered to Holders after 12:00 p.m. New York City time.  Subject to Section 3(c), any Potential Takedown Participant’s participation in an Underwritten Takedown shall be on the same terms as the Holders who made the Takedown Request.  Any Potential Takedown Participant’s request to participate in an Underwritten Takedown shall be binding on the Potential Takedown Participant, except that such participation may be conditioned on the Underwritten Takedown being completed within ten (10) Business Days of its acceptance at a price per share (after giving effect to any underwriters’ discounts or commissions) to such Potential Takedown Participant of not less than ninety percent (90%) of the closing price for the shares on their principal trading market on the Business Day immediately prior to such Potential Takedown Participant’s election to participate (the “Participation Conditions”).  Notwithstanding the delivery of any Takedown Notice, but subject to the Participation Conditions (to the extent applicable), all determinations as to whether to complete any Underwritten Takedown and as to the timing, manner, price and other terms of any Underwritten Takedown contemplated by this Section 3(b) shall be determined by the Holders of a majority of the Registrable Securities offered by the Holders who made the applicable Takedown Request.

 

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(c)        The Company shall not be obligated to take any action to effect any Underwritten Takedown if an Underwritten Takedown was consummated within the preceding ninety (90) days (unless otherwise consented to by the board of directors of the Company).

(d)        If the managing underwriter or underwriters of a proposed Underwritten Takedown pursuant to this Section 3 advise the Company in writing that, in its or their opinion, the number of securities requested to be included in the proposed Underwritten Takedown exceeds the number that can be sold in such Underwritten Takedown without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, the number of Registrable Securities to be included in such offering shall be (x) first, allocated to each Holder that has requested to participate in such Underwritten Takedown an amount equal to the lesser of (i) the number of such Registrable Securities requested to be registered or sold by such Holder, and (ii) a number of such shares equal to such Holder’s Pro Rata Portion, and (y) second, and only if all the securities referred to in clause (x) have been included, the number of other securities that, in the opinion of such managing underwriter or underwriters can be sold without having such adverse effect; provided, however, that Registrable Securities held by the Investor shall not be subject to reduction pursuant to this Section 3(d) without its prior consent.

4.          Registration Procedures.  In connection with the Company’s registration obligations hereunder, the Company shall:

(a)        Within a reasonable time before filing a Registration Statement or amendments or supplements thereto, (i) furnish to the underwriters, if any, and to the Holders of such Registrable Securities copies of such documents proposed to be filed, which documents shall be subject to the review, comment and approval of such underwriters and Holders’ and their respective counsel, and (ii) make such changes in such documents concerning the Holders prior to the filing thereof as such Holders, or their counsel, may reasonably request.

(b)        (i) Prepare and file with the SEC such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the SEC such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the SEC with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to the Holders true and complete copies of all correspondence from and to the SEC relating to a Registration Statement (provided that, the Company shall excise any information contained therein which would constitute material non-public information regarding the Company or any of its Subsidiaries), and (iv) comply in all material respects with the applicable provisions of the 1933 Act and the 1934 Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

 

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(c)         If during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case prior to the Required Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the number of such Registrable Securities.

(d)        Promptly notify the Holders and the managing underwriter or underwriters, if any, of the Company’s becoming aware that (i) a Prospectus relating thereto is required to be delivered under the 1933 Act, of the happening of any event or passage of time of which the Company has knowledge as a result of which the Prospectus contained in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing or the financial statements included therein ineligible for inclusion or which becomes subject to a SEC, state or other governmental order suspending the effectiveness of the Registration Statement covering any of the Registrable Securities or (ii) the representations and warranties of the Company in any applicable underwriting agreement cease to be true and correct in all material respects.  The Company shall use its best efforts to ensure that the use of such Prospectus (as amended) may be resumed as promptly as practicable.  The Investor hereby covenants that it will not sell any Registrable Securities pursuant to such Prospectus during the period commencing at the time at which the Company gives the Investor notice of the suspension of the use of such Prospectus in accordance with this Section 4(d) and ending at the time the Company gives such Investor notice that the Investor may thereafter effect sales pursuant to the Prospectus, or until the Company delivers to the Investor or files with the SEC and amended or supplemented Prospectus.

(e)        Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

(f)         Furnish to each Holder and each underwriter, if any, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the SEC; provided, that any such item which is available on the EDGAR system (or successor thereto) need not be furnished in physical form.

 

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(g)        Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 4(d).

(h)        Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that, the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.

(i)          If requested by a Holder, managing underwriter or underwriter, if any, cooperate with such Holder, managing underwriter or underwriter to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holder may request.

(j)         Otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including any supplement or amendment thereof, with the SEC pursuant to Rule 424 under the Securities Act, promptly inform the Holders in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.

(k)        The Company shall use its best efforts to maintain eligibility for use of Form S-3 (or any successor form thereto) for the registration of the resale of Registrable Securities.

(l)          Promptly incorporate in a Prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters and the Holders of a majority of Registrable Securities being sold agree should be included therein relating to the plan of distribution with respect to such Registrable Securities; and make all required filings of such Prospectus supplement or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment.

 

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(m)        Deliver to each selling Holder and each underwriter, if any, without charge, as many copies of the applicable Prospectus (including each preliminary prospectus) and any amendment or supplement thereto and such other documents as such Holder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities by such Holder or underwriter (it being understood that the Company shall consent to the use of such Prospectus or any amendment or supplement thereto by each of the selling Holders and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto).

(n)        The Company shall use its reasonable best efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of such Registrable Securities.

(o)        The Company shall make such representations and warranties to the Holders whose Registrable Securities are being registered, and their underwriters or agents, if any, in form, substance and scope as are customarily made by issuers in public offerings similar to the offering then being undertaken.

(p)        The Company shall enter into such customary agreements (including underwriting and indemnification agreements) and take all such other actions as the participating Holders or the managing underwriter or underwriters, if any, reasonably request in order to expedite or facilitate the Registration and disposition of such Registrable Securities.

(q)        In the case of an underwritten Public Offering, the Company shall obtain for delivery to the Holders participating in such Public Offering and to the underwriter or underwriters, if any, an opinion or opinions (including a “negative assurance” or “disclosure letter”) from counsel for the Company dated the date of each closing under the underwriting agreement, in customary form, scope and substance, which opinions shall be reasonably satisfactory to such Holders or underwriters, as the case may be, and their respective counsel.

(r)         In the case of an underwritten Public Offering, obtain for delivery to the Company and the managing underwriter or underwriters, with copies to the Holders participating in the Public Offering or sale, a comfort letter from the Company’s independent certified public accountants or independent auditors (and, if necessary, any other independent certified public accountants or independent auditors of any subsidiary of the Company or any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement) and a letter from any other expert named in the Registration Statement in customary form and covering such matters of the type customarily covered by such letters as the managing underwriter or underwriters reasonably request, dated the date of execution of the underwriting agreement and brought down to the date of each closing under the underwriting agreement.

 

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(s)        The Company shall provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Registration Statement from and after a date not later than the effective date of such Registration Statement.

(t)        The Company shall use its best efforts to cause all Registrable Securities covered by the applicable Registration Statement to be listed on each securities exchange on which any of the Company’s equity securities are then listed or quoted and on each inter-dealer quotation system on which any of the Company’s equity securities are then quoted.

(u)        In the case of marketed Public Offering, cause the senior executive officers of the Company to participate in the customary “road show” presentations that may be reasonably requested by the managing underwriter or underwriters in any such offering and otherwise to facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto.

(v)        The Company shall make available upon reasonable notice at reasonable times and for reasonable periods for inspection by a representative appointed by the majority of the Holders covered by the applicable Registration Statement, by any underwriter participating in any disposition to be effected pursuant to such Registration Statement and by any attorney, accountant or other agent retained by such Holders or any such underwriter, all pertinent financial and other records and pertinent corporate documents and properties of the Company, and cause all of the Company’s officers, directors and employees and the independent public accountants who have certified its financial statements to make themselves available to discuss the business of the Company and to supply all information reasonably requested by any such Person in connection with such Registration Statement; provided, however, that any such Person gaining access to information regarding the Company pursuant to this Section 4(v) shall agree to hold in strict confidence and shall not make any disclosure or use any information regarding the Company that the Company determines in good faith to be confidential, and of which determination such Person is notified, unless (a) the release of such information is requested or required (by deposition, interrogatory, requests for information or documents by a governmental entity, subpoena or similar process), (b) disclosure of such information, in the opinion of counsel to such Person, is otherwise required by law, (c) such information is or becomes publicly known other than through a breach of this Agreement or any other agreement of which such Person has knowledge, (d) such information is or becomes available to such Person on a non-confidential basis from a source other than the Company or (e) such information is independently developed by such Person.

(w)        Take no direct or indirect action prohibited by Regulation M under the 1934 Act.

5.          Provision of Documents.  It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Holder that such Holder shall furnish to the Company the completed form of the Selling Stockholder Questionnaire attached hereto as Annex A and any other customary documents that the Company may reasonably request to assure compliance with federal and applicable state securities laws.

 

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6.          Non-Registration Events.  The Company and the Investors agree that the Investors will suffer damages if the Registration Statement is not filed by the Required Filing Date and not declared effective by the SEC by the Required Effectiveness Date or if, after it is declared effective, its effectiveness is not maintained in the manner and within the time periods contemplated by Section 2 hereof, and it would not be feasible to ascertain the extent of such damages with precision.  Accordingly, if (A) the Registration Statement is not filed on or before the Required Filing Date, (B) the Registration Statement is not declared effective on or before the Required Effectiveness Date, or (C) any Registration Statement described in Section 2 is declared effective but shall, at any time during the three (3) year period following the date hereof, thereafter cease to be effective for a period of time which shall exceed thirty (30) days in the aggregate per year (defined as a period of 365 days commencing on the date the Registration Statement is declared effective) (each such event, a “Non-Registration Event”), then the Company shall deliver to the Investors, as liquidated damages (“Liquidated Damages”), an amount equal to one percent (1.0%) of the aggregate purchase price paid by such Investor pursuant to the Purchase Agreement for any unregistered Registrable Securities then held by such Holder and for each subsequent thirty (30) day period (pro rata for any period less than thirty days) which are subject to such Non-Registration Event.  The maximum aggregate Liquidated Damages payable to the Investor under this Agreement shall be five percent (5.0%) of the aggregate purchase price paid by such Investor pursuant to the Purchase Agreement.  The Company must pay Liquidated Damages in cash within seven (7) business days following the occurrence of a Non-Registration Event.  In the event the Company fails to pay the Liquidated Damages to the Investor within seven (7) business days following the occurrence of a Non-Registration Event, interest will accrue on the amount of the unpaid Liquidated Damages at 10% interest per annum.  In the event a Registration Statement is filed by the Required Filing Date but is withdrawn prior to being declared effective by the SEC, then such Registration Statement will be deemed to have not been filed.

7.          Expenses.  All fees and expenses incident to the performance of or compliance with, this Agreement by the Company, including, without limitation, all registration and filing fees, printing expenses (if required), fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including reasonable counsel fees) incurred in connection with complying with state securities or “blue sky” laws, fees of the Financial Industry Regulatory Authority, Inc. (“FINRA”) in connection with any filing with FINRA pursuant to FINRA Rule 5110 that may be required to be made by any broker through which a Holder intends to make sales of Registrable Securities, transfer taxes, and fees of transfer agents and registrars, messenger, telephone and delivery expenses, 1933 Act liability insurance, if so desired by the Company, are called “Registration Expenses.”  The Company will pay all Registration Expenses in connection with any Registration Statement whether or not any Registrable Securities are sold pursuant to a Registration Statement; provided, that, (a) in the case of any Underwritten Takedown effected within two (2) years of the date hereof as a result of a Takedown Request delivered in accordance with Section 3(a), the Holders shall reimburse the Company for (i) its reasonable and documented third-party Registration Expenses in an amount up to but not exceeding Eighty-Five Thousand Dollars ($85,000) (the “Cap”) plus (ii) fees payable to the SEC and/or FINRA and reasonable and documented out-of-pocket travel expenses of senior management of the Company incurred in connection with any roadshow conducted in connection with such Underwritten Takedown, and (b) if more than one (1) Underwritten Takedown is effected between the second and fourth anniversary of the date hereof as a result of a Takedown Request delivered in accordance with Section 3(a), the Holders shall reimburse the Company (i) its reasonable and documented third-party Registration Expenses in an amount up to but not exceeding the Cap plus (ii) fees payable to the SEC and/or FINRA and reasonable and documented out-of-pocket travel expenses of senior management of the Company incurred in connection with any roadshow conducted in connection with such Underwritten Takedown(s).  Each Investor shall pay the fees and expenses of its counsel, if any, with respect hereto.

 

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8.          Indemnification and Contribution.

(a)         In the event of a registration of any Registrable Securities under the 1933 Act pursuant to Section 2, the Company will, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, each of the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person (the “Holder Indemnified Parties”), to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement under which such Registrable Securities was registered under the 1933 Act pursuant to Section 2, any preliminary prospectus or final Prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances when made, and (2) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of the Company’s obligations under this Agreement and will, subject to the provisions of Section 8(c), reimburse each Holder Indemnified Party for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Loss; provided, however, that the Company shall not be liable to the Investor to the extent, but only to the extent, that any such Losses are based upon an untrue statement or omission made in any preliminary prospectus if (i) the Investor failed to send or deliver a copy of the final prospectus delivered by the Company to the Investor with or prior to the delivery of written confirmation of the sale by the Investor to the person asserting the claim from which such damages arise, (ii) the final prospectus would have corrected such untrue statement or alleged untrue statement or such omission or alleged omission, or (iii) to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by any such Investor in writing specifically for use in such Registration Statement or prospectus.

 

12

(b)        In the event of a registration of any of the Registrable Securities under the 1933 Act pursuant to Section 2, each Holder severally but not jointly will, to the extent permitted by law, indemnify and hold harmless the Company, and each person, if any, who controls the Company within the meaning of the 1933 Act, each officer of the Company who signs the Registration Statement, each director of the Company, against all Losses, as incurred, to which the Company or such officer, director or controlling person may become subject under the 1933 Act or otherwise, insofar as such Losses arise out of or are based solely upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement under which such Registrable Securities were registered under the 1933 Act pursuant to Section 2, any preliminary prospectus or final Prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such officer, director and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Loss, provided, however, that a Holder will only be liable hereunder in any such case if and only to the extent that any such Loss arises out of or is based solely upon an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with information pertaining to such Holder, as such, furnished in writing to the Company by such Holder specifically for use in such Registration Statement or Prospectus, and provided, further, however, that the liability of the Holder hereunder shall be limited to the net proceeds actually received by the Holder from the sale of Registrable Securities pursuant to the Registration Statement giving rise to such indemnification obligation.

(c)        Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to such indemnified party under this Section, except and only if and to the extent the indemnifying party is prejudiced by such omission (as determined by a court).  In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected, provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be reasonable defenses available to indemnified party which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, the indemnified parties, as a group, shall have the right to select one separate counsel, reasonably satisfactory to the indemnified and indemnifying party, and to assume such legal defenses and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred.  Subject to the terms of this Agreement, all reasonable fees and expenses of the indemnified party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such proceeding in a manner not inconsistent with this Section) shall be paid to the indemnified party, as incurred, within ten (10) Business Days of written notice thereof to the indemnifying party; provided, that, the indemnified party shall promptly reimburse the indemnifying party for that portion of such fees and expenses applicable to such actions for which such indemnified party is finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.  No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending proceeding in respect of which any indemnified party is a party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding.

 

13

(d)        In order to provide for just and equitable contribution in the event of joint liability under the 1933 Act in any case in which either (i) a Holder, or any controlling person of a Holder, makes a claim for indemnification pursuant to this Section 8 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 8 provides for indemnification in such case, or (ii) contribution under the 1933 Act may be required on the part of the Investor or controlling person of the Holder in circumstances for which indemnification is not provided under this Section 8; then, and in each such case, the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amounts paid or payable by such indemnified party as a result of such Loss or action 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 which resulted in such Loss or action as well as any other relevant equitable considerations; provided, that the maximum amount of liability in respect of such contribution shall be limited, in the case of each Holder, to an amount equal to the net proceeds (after underwriting fees, commissions or discounts) actually received by the Holder from the sale of Registrable Securities effected pursuant to such registration.  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 or alleged 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.  The Parties agree that it would not be just and equitable if contribution pursuant hereto were determined by pro rata allocation or by any other method or allocation which does not take account of the equitable considerations referred to herein.  No Person guilty or liable of fraudulent misrepresentation shall be entitled to contribution from any Person; and

(e)        The indemnity and contribution agreements contained in this Section 8 are in addition to any other liability that the indemnifying parties may have to the indemnified parties.

 

14

9.          Miscellaneous.

(a)        Remedies.  In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement.  Each of the Company and each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.

(b)        Compliance.  Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it in connection with sales of Registrable Securities pursuant to a Registration Statement.

(c)        Piggy-Back Registrations. If, at any time from and after the date hereof through the end of the Effectiveness Period, there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the SEC a registration statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the 1933 Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company’s stock option or other employee benefit plans, then the Company shall deliver to each Holder a written notice of such determination and, if within fifteen days after the date of the delivery of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such Holder requests to be registered; provided, however, that the Company shall not be required to register any Registrable Securities pursuant to this Section 9(c) that are eligible for resale pursuant to Rule 144 promulgated by the SEC pursuant to the 1933 Act or that are the subject of a then effective Registration Statement and each Holders rights to sell or transfer Registrable Securities that are excluded from registration pursuant to this Section 9(c) shall not be precluded or limited by any registration that the Holder would be entitled to piggy-back on but for this proviso.

(d)        Amendments and Waivers.  The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of a majority of the then outstanding Registrable Securities.   Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of a Holder or some Holders and that does not directly or indirectly affect the rights of other Holders may be given by such Holder or Holders of all of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the first sentence of this Section 9(d).

 

15

(e)        Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreement.

(f)         Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder.  The Company may not assign (except by merger) its rights or obligations hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities.  The Investor and each subsequent Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under Section 9.1 of the Purchase Agreement.

(g)        Execution and Counterparts.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

(h)        Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with Section 9.3 of the Purchase Agreement.

(i)         Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction.  It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(j)         Headings. The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit or affect any of the provisions hereof.

(k)        Independent Nature of Holders’ Obligations and Rights.  The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder.  Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement.  Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose.

 

16

(l)         No Inconsistent Agreements.  Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.  Neither the Company nor any of its Subsidiaries has previously entered into any agreement granting any registration rights with respect to any of its securities to any person that have not been satisfied in full.

(m)       Discontinued Disposition.  By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 4(d), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed.  The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.  The Company agrees and acknowledges that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be subject to the provisions of Section 6.

(Signature Pages Follow)

 

17

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.

	 	
RICEBRAN TECHNOLOGIES

	 		 
	 	
By:

	
/s/ Robert Smith

	 	 	 	 
	 	 	
Name:

	
Robert Smith, Ph.D

	 	 	 	 
	 	 	
Title:

	
Chief Executive Officer

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

[Signature Page to Registration Rights Agreement]

 

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.

	 	
CONTINENTAL GRAIN COMPANY

	 		 
	 	
By:   

	/s/ Ari Gendason
	 	
Name:   

	
Ari Gendason

	 	
Title:     

	
Senior Vice President – Corporate Investments

 

[Signature Page to Registration Rights Agreement]

 

Annex A

 

RICEBRAN TECHNOLOGIES

Selling Stockholder Notice and Questionnaire

The undersigned beneficial owner of Registrable Securities (as defined in the Registration Rights Agreement to which this document is Annexed) of RiceBran Technologies, a California corporation (the “Company”), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “SEC”) a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement.  A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below.  All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus.  Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.

NOTICE

 

The undersigned beneficial owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration Statement.

The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:

QUESTIONNAIRE

	
1.

	
Name.

(a)           Full Legal Name of Selling Stockholder:

(b)           Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held:

(c)           Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire):

 

A-1

	
2.

	
Address for Notices to Selling Stockholder:

Telephone:

Fax:

Contact Person:

	
3.

	
Broker-Dealer Status:

(a)            Are you a broker-dealer?

Yes   ☐                     No   ☐

 

(b)            If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?

 

Yes   ☐                     No   ☐

 

Note:       If “no” to Section 3(b), the SEC’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

 

(c)            Are you an affiliate of a broker-dealer?

 

Yes   ☐                     No   ☐

 

(d)           If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?

 

Yes   ☐                     No   ☐

 

Note:       If “no” to Section 3(d), the SEC’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

	
4.

	
Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder.

Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable pursuant to the Purchase Agreement.

 

A-2

(a)           Type and Amount of other securities beneficially owned by the Selling Stockholder:

	
5.

	
Relationships with the Company:

Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.

State any exceptions here:

 

The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective.

By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto.  The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements thereto.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.

	
Date:

	
Beneficial Owner:

	 
	 	 	 	 
	 	
By:

	 	 
	 	 	 	 
	 	 	
Name:

	 
	 	 	 	 
	 	 	
Title:

	 

PLEASE FAX A COPY (OR EMAIL A .PDF COPY) OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

 

A-3

Annex B

 

PLAN OF DISTRIBUTION

 

Each Selling Stockholder (the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the principal Trading Market or any other stock exchange, market or trading facility on which the securities are traded or in private transactions.  These sales may be at fixed or negotiated prices.  A Selling Stockholder may use any one or more of the following methods when selling securities:

 

		·	
ordinary brokerage transactions and transactions in which the broker‐dealer solicits purchasers;

 

		·	
block trades in which the broker‐dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;

 

		·	
purchases by a broker‐dealer as principal and resale by the broker‐dealer for its account;

 

		·	
an exchange distribution in accordance with the rules of the applicable exchange;

 

		·	
privately negotiated transactions;

 

		·	
settlement of short sales;

 

		·	
in transactions through broker‐dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;

 

		·	
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

 

		·	
a combination of any such methods of sale; or

 

		·	
any other method permitted pursuant to applicable law.

 

The Selling Stockholders may also sell securities under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), if available, rather than under this prospectus.

 

Broker‐dealers engaged by the Selling Stockholders may arrange for other brokers‐dealers to participate in sales.  Broker‐dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker‐dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.

 

B-1

In connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume.  The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities.  The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

 

The Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales.  In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.  Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.

 

The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities.  The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

 

Because Selling Stockholders may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act including Rule 172 thereunder.  In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. The Selling Stockholders have advised us that there is no underwriter or coordinating broker acting in connection with the proposed sale of the resale securities by the Selling Stockholders.

 

We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect.  The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

 

B-2

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution.  In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of securities of the common stock by the Selling Stockholders or any other person.  We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

 

 

B-3Exhibit 4.2

 

EXECUTION VERSION

 

CARGURUS, INC.

 

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

TABLE OF CONTENTS

 

	
1.
    	
 
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
Registration Rights
    	
5
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.1
    	
Demand Registration
    	
5
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.2
    	
Company Registration
    	
6
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.3
    	
Underwriting   Requirements
    	
7
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.4
    	
Obligations of the   Company
    	
8
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.5
    	
Furnish Information
    	
9
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.6
    	
Expenses of   Registration
    	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.7
    	
Delay of Registration
    	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.8
    	
Indemnification
    	
10
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.9
    	
Reports Under Exchange   Act
    	
12
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.10
    	
Limitations on   Subsequent Registration Rights
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.11
    	
“Market Stand-off”   Agreement
    	
13
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.12
    	
Restrictions on   Transfer
    	
14
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.13
    	
Termination of   Registration Rights
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.14
    	
Registration Rights   Limited to Class A Common Stock
    	
15
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
Information and   Observer Rights
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.1
    	
Delivery of Financial   Statements
    	
16
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.2
    	
Inspection
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.3
    	
Observer Rights
    	
17
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.4
    	
Termination of   Information Rights and Observer Rights
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
Rights to Future Stock   Issuances
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
4.1
    	
Right of First Offer
    	
18
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
4.2
    	
Termination
    	
20
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
Additional Covenants
    	
20
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
5.1
    	
Employee Agreements
    	
20
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
5.2
    	
Employee Stock
    	
20
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
5.3
    	
Board Matters
    	
20
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
5.4
    	
Successor   Indemnification
    	
20
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
5.5
    	
Indemnification Matters
    	
21
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
5.6
    	
Right to Conduct   Activities
    	
21
    

 

i

 

	
 
    	
 
    	
5.7
    	
FCPA
    	
22
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
5.8
    	
Termination of   Covenants
    	
22
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.
    	
 
    	
Miscellaneous
    	
22
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.1
    	
Successors and Assigns
    	
22
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.2
    	
Governing Law
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.3
    	
Counterparts
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.4
    	
Titles and Subtitles
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.5
    	
Notices
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.6
    	
Amendments and Waivers
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.7
    	
Severability
    	
24
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.8
    	
Aggregation of Stock
    	
25
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.9
    	
Additional Investors
    	
25
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.10
    	
Entire Agreement
    	
25
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.11
    	
Dispute Resolution
    	
25
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.12
    	
Delays or Omissions
    	
26
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.13
    	
Effect on Prior   Agreement
    	
26
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCHEDULE   A -
    	
Schedule of Investors
    	
 
    
						

 

ii

 

AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

THIS AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this “Agreement”), is made as of the 23rd day of August, 2016, by and among CarGurus, Inc., a Delaware corporation (the “Company”), and each of the investors listed on Schedule A hereto (together with any subsequent investors, or transferees, who become parties hereto as “Investors” pursuant to Subsection 6.9 below, the “Investors”).

 

RECITALS

 

WHEREAS, certain of the Investors (the “Existing Investors”) hold shares of the Company’s Preferred Stock and/or shares of Common Stock issued upon conversion thereof and possess registration rights, information rights, and other rights pursuant to an Investors’ Rights Agreement, dated as of July 7, 2015, by and between the Company and such Investors (the “Prior Agreement”); and

 

WHEREAS, the Existing Investors represent the Majority Investors (as defined in the Prior Agreement), and with the Company desire to amend and restate the Prior Agreement in its entirety and to accept the rights created pursuant to this Agreement in lieu of the rights granted to them under the Prior Agreement; and

 

WHEREAS, certain of the Investors are parties to that certain Series E Preferred Stock Purchase Agreement of even date herewith between the Company and certain of the Investors (the “Purchase Agreement”), under which certain of the Company’s and such Investors’ obligations are conditioned upon the execution and delivery of this Agreement by such Investors, Existing Investors representing the Majority Investors under the Prior Agreement, and the Company.

 

NOW, THEREFORE, the Existing Investors hereby agree that the Prior Agreement shall be superseded and replaced in its entirety by this Agreement, and the parties to this Agreement further agree as follows:

 

1.             Definitions. For purposes of this Agreement:

 

1.1          “Advisory Investor” means a mutual fund, pension fund, pooled investment vehicle or separate account advised by an investment advisor registered under the Investment Adviser’s Act of 1940, as amended.

 

1.2          “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including without limitation any general partner, managing member, officer or director of such Person or any venture capital or other investment fund now or hereafter existing that is controlled by one or more general partners or managing members or investment advisor of, or shares the same management company with, such Person.

 

1.3          “Certificate of Incorporation” means the Company’s Second Amended and Restated Certificate of Incorporation, as may be amended from time to time.

 

 

1.4          “Common Stock” means shares of the Company’s Class A common stock, par value $0.001 per share and Class B common stock, par value $0.001 per share.

 

1.5          “Competitor” means a Person engaged, directly or indirectly (including through any partnership, limited liability company, corporation, joint venture or similar arrangement (whether now existing or formed hereafter)), in the field of online automotive research and shopping, but shall not include (w) any financial investment firm or collective investment vehicle that, together with its Affiliates, holds less than twenty percent (20%) of the outstanding equity of any Competitor and does not, nor do any of its Affiliates, have a right to designate any members of the Board of Directors of any Competitor, (x) any Advisory Investor, (y) Growth Capital Fund I, L.P. or (z) Foxhaven Master Fund, LP or Foxway, LP.

 

1.6          “Damages” means any loss, damage, claim or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an 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 indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.

 

1.7          “Derivative Securities” means any securities or rights convertible into, or exercisable or exchangeable for (in each case, directly or indirectly), Common Stock, including options and warrants.

 

1.8          “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

1.9          “Excluded Registration” means (i) a registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) 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 the Registrable Securities; or (iv) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered.

 

1.10        “Fidelity” shall mean Fidelity Management & Research Company and any successor or affiliated registered investment advisor to the Fidelity Investors.

 

1.11        “Fidelity Investors” shall mean any Investors advised or subadvised by Fidelity or one of its Affiliates.

 

1.12        “Form S-1” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.

 

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1.13        “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC.

 

1.14        “GAAP” means generally accepted accounting principles in the United States.

 

1.15        “Holder” means any holder of Registrable Securities who is a party to this Agreement.

 

1.16        “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including, adoptive relationships, of a natural person referred to herein.

 

1.17        “Initiating Holders” means, collectively, Holders who properly initiate a registration request under this Agreement.

 

1.18        “Institutional Investors” means, collectively, (w) Growth Capital Fund I, L.P., (x) T. Rowe Price, (y) each Fidelity Investor and (z) Foxhaven Master Fund, LP or Foxway, LP (together with its/their Affiliates).

 

1.19        “Lead Investor” means Growth Capital Fund I, L.P. and/or its Affiliates and assigns.

 

1.20        “Qualified IPO” means a firm commitment underwritten public offering by the Company of shares of its Common Stock, the public offering price per share of which is not less than $5.00 per share (subject to appropriate adjustment for stock splits, stock dividends, combinations, and other recapitalizations), and which results in aggregate cash proceeds to the Company of not less than $75 million (net of underwriting discounts and commissions).

 

1.21        “Key Employee” means (i) Langley Steinert, (ii) any other executive-level employee and (iii) any employee who, either alone or in concert with others, has significant involvement in the development, invention, programming or design of any Company Intellectual Property (as defined in the Purchase Agreement).

 

1.22        “Major Investor” means (a) any Investor that, individually or together with such Investor’s Affiliates, holds at least (i) 800,000 shares of Common Stock, with respect to Investors holding Common Stock, (ii) 400,000 shares of Series A Preferred Stock, with respect to Investors holding Series A Preferred Stock, (iii) 400,000 shares of Series B Preferred Stock, with respect to Investors holding Series B Preferred Stock, (iv) 500,000 shares of Series C Preferred Stock, with respect to Investors holding Series C Preferred Stock, (v) 500,000 shares of Series D Preferred Stock, with respect to Investors holding Series D Preferred Stock (in each case, as adjusted for any stock split, stock dividend, combination, or other recapitalization or reclassification effected after the date hereof), or (vi) 100,000 shares of Series E Preferred Stock, with respect to Investors holding Series E Preferred Stock (in each case, as adjusted for any stock

 

3

 

split, stock dividend, combination, or other recapitalization or reclassification effected after the date hereof) and (b) any Holder that is an Advisory Investor.

 

1.23        “New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities.

 

1.24        “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.

 

1.25        “Preferred Directors” means any director of the Company that the holders of record of the Preferred Stock are entitled to elect pursuant to the Certificate of Incorporation.

 

1.26        “Preferred Stock” means, collectively, shares of the Company’s Series A Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), Series B Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”), Series C Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”), Series D Preferred Stock, par value $0.001 per share (the “Series D Preferred Stock”) and Series E Preferred Stock, par value $0.001 per share (the “Series E Preferred Stock”).

 

1.27        “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of the Preferred Stock; (ii) any Common Stock, or any Common Stock issued or issuable (directly or indirectly) upon conversion and/or exercise of any other securities of the Company, acquired by the Investors after the date hereof; and (iii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in clauses (i) and (ii) above; excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which the applicable rights under this Agreement are not assigned pursuant to Subsection 6.1, and excluding for purposes of Section 2.8 any shares for which registration rights have terminated pursuant to Subsection 2.13 of this Agreement.

 

1.28        “Registrable Securities then outstanding” means the number of shares determined by adding the number of shares of outstanding Common Stock that are Registrable Securities and the number of shares of Common Stock issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities that are Registrable Securities.

 

1.29        “Restricted Securities” means the securities of the Company required to be notated with the legend set forth in Subsection 2.12(b) hereof.

 

1.30        “SEC” means the Securities and Exchange Commission.

 

1.31        “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.

 

1.32        “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.

 

4

 

1.33        “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

1.34        “Selling Expenses” means 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, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Subsection 2.6.

 

1.35        “T. Rowe Price” means T. Rowe Price Associates, Inc. and/or its Affiliates and assigns.

 

1.36        “2015 Equity Incentive Plan” means the Amended and Restated 2015 Equity Incentive Plan of the Company, as may be amended from time to time.

 

2.             Registration Rights. The Company covenants and agrees as follows:

 

2.1          Demand Registration.

 

(a)           Form S-1 Demand. If at any time after the date that is one hundred eighty (180) days after the effective date of the registration statement for a Qualified IPO, the Company receives a request from Holders of fifty percent (50%) of the Registrable Securities then outstanding that the Company file a Form S-1 registration statement with respect to the Registrable Securities then outstanding, then the Company shall (x) within ten (10) days after the date such request is given, give notice thereof (the “Demand Notice”) to all Holders other than the Initiating Holders; and (y) as soon as practicable, and in any event within sixty (60) days after the date such request is given by the Initiating Holders, file a Form S-1 registration statement under the Securities Act covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Subsections 2.1(c) and 2.3.

 

(b)           Form S-3 Demand. If at any time when it is eligible to use a Form S-3 registration statement, the Company receives a request from any Holder or Holders of Registrable Securities then outstanding that the Company file a Form S-3 registration statement with respect to outstanding Registrable Securities of such Holder or Holders having an anticipated aggregate offering price, net of Selling Expenses, of at least $5 million, then the Company shall (i) within ten (10) days after the date such request is given, give a Demand Notice to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event within sixty (60) days after the date such request is given by the Initiating Holders, file a Form S-3 registration statement under the Securities Act covering all Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) business days of the date the Demand Notice is given, and in each case, subject to the limitations of Subsections 2.1(c) and 2.3.

 

(c)           Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Subsection 2.1 a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s

 

5

 

Board of Directors it would be materially detrimental to the Company and its stockholders for such registration statement to be filed and it is therefore necessary to defer the filing of such registration statement, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than ninety (90) days after the request of the Initiating Holders is given; provided, however, that the Company may not invoke this right more than once in any twelve (12) month period.

 

(d)           The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Subsection 2.1(a) (i) during the period that is forty-five (45) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is one hundred eighty (180) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; (ii) after the Company has effected one registration pursuant to Subsection 2.1(a); or (iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Subsection 2.1(b). The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Subsection 2.1(b) (i) during the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is one hundred twenty (120) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or (ii) if the Company has effected two registrations pursuant to Subsection 2.1(b) within the twelve (12) month period immediately preceding the date of such request. A registration shall not be counted as “effected” for purposes of this Subsection 2.1(d) until such time as the applicable registration statement has been declared effective by the SEC, unless the Initiating Holders withdraw their request for such registration, elect not to pay the registration expenses therefor, and forfeit their right to one demand registration statement pursuant to Subsection 2.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Subsection 2.1(d).

 

2.2          Company Registration. If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the Holders) any of its securities under the Securities Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration), the Company shall, at such time, promptly give each Holder notice of such registration. Upon the request of each Holder given within twenty (20) days after such notice is given by the Company, the Company shall, subject to the provisions of Subsection 2.3, cause to be registered all of the Registrable Securities that each such Holder has requested to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Subsection 2.2 before the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Subsection 2.6.

 

6

 

2.3          Underwriting Requirements.

 

(a)           If, pursuant to Subsection 2.1, 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 Subsection 2.1, and the Company shall include such information in the Demand Notice. The underwriter(s) will be selected by the Company and shall be reasonably acceptable to a majority in interest of the Initiating Holders. In such event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Subsection 2.4(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Subsection 2.3, if the underwriter(s) advise(s) the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable Securities, including the Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holder or in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number of Registrable Securities held by the Holders to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares.

 

(b)           In connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Subsection 2.2, the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated among the selling Holders in proportion (as nearly as practicable to) the number of Registrable Securities owned by each selling Holder or in such other proportions as shall mutually be agreed to by all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares. Notwithstanding the foregoing, in no event shall (i) the number of Registrable Securities included in the offering be reduced unless all other

 

7

 

securities (other than securities to be sold by the Company) are first entirely excluded from the offering, or (ii) the number of Registrable Securities included in the offering be reduced below twenty-five percent (25%) of the total number of securities included in such offering, unless such offering is a Qualified IPO, in which case the selling Holders may be excluded further if the underwriters make the determination described above and no other stockholder’s securities are included in such offering. For purposes of the provision in this Subsection 2.3(b) concerning apportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, stockholders, and Affiliates of such Holder, or the estates and Immediate Family Members of any such partners, 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 “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence.

 

(c)           For purposes of Subsection 2.1, a registration shall not be counted as “effected” if, as a result of an exercise of the underwriter’s cutback provisions in Subsection 2.3(a), fewer than fifty percent (50%) of the total number of Registrable Securities that Holders have requested to be included in such registration statement are actually included.

 

2.4          Obligations of the Company. Whenever required under this Section 2.4 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

 

(a)           prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that (i) such one hundred twenty (120) day period shall be extended for a period of time equal to the period the Holder refrains, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration, and (ii) in the case of any registration of Registrable Securities on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such one hundred twenty (120) day period shall be extended for up to sixty (60) days, if necessary, to keep the registration statement effective until all such Registrable Securities are sold;

 

(b)           prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement;

 

(c)           furnish to the selling Holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;

 

8

 

(d)           use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(e)           in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;

 

(f)            use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;

 

(g)           provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

 

(h)           promptly make available for inspection by the selling Holders, any underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;

 

(i)            notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and

 

(j)            after such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus.

 

In addition, the Company shall ensure that, at all times after any registration statement covering a public offering of securities of the Company under the Securities Act shall have become effective, its insider trading policy shall provide that the Company’s directors may implement a trading program under Rule 10b5-1 of the Exchange Act.

 

2.5          Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2.5 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of

 

9

 

such securities as is reasonably required to effect the registration of such Holder’s Registrable Securities.

 

2.6          Expenses of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 2.8, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements, not to exceed $50,000, of one counsel for the selling Holders (“Selling Holder Counsel”), shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Subsection 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to registration pursuant to Subsections 2.1(a) or 2.1(b), as the case may be. All Selling Expenses relating to Registrable Securities registered pursuant to this Section 2.6 shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.

 

2.7          Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

 

2.8          Indemnification. If any Registrable Securities are included in a registration statement under this Section 2.8:

 

(a)           To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers, directors, and stockholders of each such Holder; legal counsel, accountants and investment advisors for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 2.8(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.

 

(b)           To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the

 

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Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such registration; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 2.8(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Subsections 2.8(b) and 2.8(d) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.

 

(c)           Promptly after receipt by an indemnified party under this Subsection 2.8 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Subsection 2.8, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Subsection 2.8, to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Subsection 2.8.

 

(d)           To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either: (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Subsection 2.8 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Subsection 2.8 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Subsection 2.8, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such

 

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proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect 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 allegedly untrue statement of a material fact, or the omission or alleged omission of 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; provided, however, that, in any such case (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall a Holder’s liability pursuant to this Subsection 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Subsection 2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.

 

(e)           Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

 

(f)            Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and Holders under this Subsection 2.8 shall survive the completion of any offering of Registrable Securities in a registration under this Section 2.8, and otherwise shall survive the termination of this Agreement.

 

2.9          Reports Under Exchange Act. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company shall:

 

(a)           make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the registration statement filed by the Company for the IPO;

 

(b)           use commercially reasonable efforts to file with the SEC 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 the Company has become subject to such reporting requirements); and

 

(c)           furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety

 

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(90) days after the effective date of the registration statement filed by the Company for the IPO), the Securities Act, and the Exchange Act (at any time after the Company has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after the Company so qualifies); and (ii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration (at any time after the Company has become subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time after the Company so qualifies to use such form).

 

2.10        Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the holders of a majority of the Series E Preferred Stock then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company that would provide to such holder the right to include securities in any registration on other than either a pro rata basis with respect to the Registrable Securities or on a subordinate basis after all holders of Series E Preferred Stock have had the opportunity to include in the registration and offering all shares of Registrable Securities that they wish to so include; provided that this limitation shall not apply to any additional Investor who becomes a party to this Agreement in accordance with Subsection 6.9.

 

2.11        “Market Stand-off” Agreement. Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the Company’s initial public offering (the “IPO”) and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days), or such other period (not to exceed 210 days following the date of the final prospectus relating to the IPO) as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (1) the publication or other distribution of research reports, and (2) analyst recommendations and opinions, including, but not limited to, the restrictions contained in FINRA Rule 2241 or NYSE Rule 472(f), or any successor provisions or amendments thereto, (i) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock held immediately before the effective date of the registration statement for the IPO or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Subsection 2.11  shall only apply to the IPO, shall not apply to shares of Common Stock acquired in the IPO or in the open market following the IPO, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and shall be applicable to the Holders only if all officers, directors and other holders of at least 1% of the outstanding Common Stock (after giving effect to the conversion into Common Stock of all outstanding Preferred Stock) are subject to the same restrictions and the underwriter agrees that if any of the obligations described in this Subsection 2.11 are waived or terminated with respect to any of the securities of any such Holder, officer, director or one-percent or greater stockholder (in any such case, the “Released Securities”), the foregoing provisions shall be waived or terminated, as applicable, to the same extent and with respect to the

 

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same percentage of securities of each Holder as the percentage of Released Securities represent with respect to the securities held by the applicable Holder, officer, director or stockholder. The underwriters in connection with such registration are intended third-party beneficiaries of this Subsection 2.11 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Subsection 2.11 or that are necessary to give further effect thereto.

 

2.12        Restrictions on Transfer.

 

(a)           The Preferred Stock and the Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company shall not recognize and shall issue stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer, except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the provisions of the Securities Act. A transferring Holder will cause any proposed purchaser, pledgee, or transferee of the Preferred Stock and the Registrable Securities held by such Holder to agree to take and hold such securities subject to the provisions and upon the conditions specified in this Agreement.

 

(b)           Each certificate, instrument, or book entry representing (i) the Preferred Stock, (ii) the Registrable Securities, and (iii) any other securities issued in respect of the securities referenced in clauses (i) and (ii), upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event, shall (unless otherwise permitted by the provisions of Subsection 2.12(c)) be notated with a legend substantially in the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT, AND NOT WITH A VIEW, TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.

 

THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN INVESTORS’ RIGHTS AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

The Holders consent to the Company making a notation in its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer set forth in this Subsection 2.12.

 

(c)           The holder of such Restricted Securities, by acceptance of ownership thereof, agrees to comply in all respects with the provisions of this Section 2.12. In connection with any sale, pledge, or transfer of any Restricted Securities, unless there is in effect a

 

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registration statement under the Securities Act covering the proposed transaction or, following the IPO, the transfer is made pursuant to SEC Rule 144, the Holder thereof shall give notice to the Company of such sale, pledge, or transfer. Each such notice shall describe the manner and circumstances of the sale, pledge, or transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such Holder’s expense by either (i) a written opinion of legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed transaction may be effected without registration under the Securities Act; (ii) a “no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer of such Restricted Securities without registration will not result in a recommendation by the staff of the SEC that action be taken with respect thereto; or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the Restricted Securities may be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance with the terms of the notice given by the Holder to the Company. The Company will not require such a legal opinion or “no action” letter (x) in any transaction in compliance with SEC Rule 144; (y) in any transaction in which such Holder distributes Restricted Securities to an Affiliate of such Holder for no consideration or (z) any transaction involving the transfer of Restricted Securities from any Holder who is an Advisory Investor to another Advisory Investor with the same or an affiliated registered investment advisor; provided that each transferee (other than a transferee pursuant to clause (x)) agrees in writing to be subject to the terms of this Subsection 2.12. Each certificate, instrument, or book entry representing the Restricted Securities transferred as above provided shall be notated with, except if such transfer is made pursuant to SEC Rule 144 or pursuant to an effective registration statement, the appropriate restrictive legend set forth in Subsection 2.12(b), except that such certificate instrument, or book entry shall not be notated with such restrictive legend if, in the opinion of counsel for such Holder and the Company, such legend is not required in order to establish compliance with any provisions of the Securities Act.

 

2.13        Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Subsections 2.1 or 2.2 shall terminate upon the earliest to occur of:

 

(a)           the closing of a Deemed Liquidation Event, as such term is defined in the Certificate of Incorporation; provided that the Holders shall have received only cash or liquid securities in connection with such Deemed Liquidation Event; and

 

(b)           the second anniversary of a Qualified IPO.

 

2.14        Registration Rights Limited to Class A Common Stock. Notwithstanding anything to the contrary contained in this Agreement, the registration rights set forth in this Section 2 shall only provide the Holders with rights to request registration of shares of the Company’s Class A Common Stock, par value $0.001 per share (the “Class A Common Stock”), or to request inclusion of Class A Common Stock, in any registration pursuant to Subsections 2.1 or 2.2, and nothing contained herein shall be construed as granting the Holders any rights to request registration of shares of the Company’s Class B Common Stock, par value $0.001 per share.

 

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3.             Information and Observer Rights.

 

3.1          Delivery of Financial Statements. So long as there are outstanding shares of Preferred Stock and until the consummation of a Qualified IPO, the Company shall deliver to each Major Investor, provided that the Board of Directors has not reasonably determined that such Major Investor is a Competitor:

 

(a)           as soon as practicable, but in any event within one hundred eighty (180) days after the end of each fiscal year of the Company (i) an audited balance sheet as of the end of such year, (ii) audited statements of income, retained earnings and changes in financial position for such year, and (iii) an audited statement of stockholders’ equity as of the end of such year;

 

(b)           as soon as practicable, but in any event within thirty (30) days after the end of each of quarter each fiscal year of the Company, unaudited statements of income and cash flows for such fiscal quarter, and an unaudited balance sheet and statement of stockholders’ equity as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end adjustments; and (ii) not contain all notes thereto that may be required in accordance with GAAP); and

 

(c)           as soon as practicable, but in any event within forty-five (45) days after the end of each quarter of each fiscal year of the Company, a statement showing the number of shares of each class and series of capital stock and securities convertible into or exercisable for shares of capital stock outstanding at the end of the period, the Common Stock issuable upon conversion or exercise of any outstanding securities convertible or exercisable for Common Stock and the exchange ratio or exercise price applicable thereto, and the number of shares of issued stock options and stock options not yet issued but reserved for issuance, if any, all in sufficient detail as to permit the Major Investors to calculate their respective percentage equity ownership in the Company, and certified by the chief financial officer or chief executive officer of the Company as being true, complete, and correct.

 

(d)           as soon as practicable upon a request by a Major Investor, the Company shall use its reasonable commercial efforts to promptly respond or cause its transfer agent, if applicable, to promptly respond, to requests for information made on behalf of any Major Investor relating to (a) accounting or securities law matters required in connection an audit of the Major Investor or (b) the actual holdings of the Major Investor’s accounts, including in relation to the outstanding capital stock of the Company; provided, however, that the Company shall not be obligated to provide any such information that could reasonably result in a violation of applicable law or conflict with the Company’s insider trading policy or a confidentiality obligation of the Company (unless the Company believes the issue can be resolved by using a non-disclosure agreement and a non-disclosure agreement or confidentiality obligations are either already in place or are put in place). The rights given to any Major Investor pursuant to this Section 3.1(d) shall expire once that Investor’s account holds or could hold no securities of the Company that are restricted from resale under the Securities Act of 1933, as amended.

 

If, for any period, the Company has any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period the financial statements

 

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delivered pursuant to the foregoing sections shall be the consolidated and consolidating financial statements of the Company and all such consolidated subsidiaries.

 

Notwithstanding anything else in this Subsection 3.1 to the contrary, the Company may cease providing the information set forth in this Subsection 3.1 during the period starting with the date sixty (60) days before the Company’s good-faith estimate of the date of filing of a registration statement if it reasonably concludes it must do so to comply with the SEC rules applicable to such registration statement and related offering; provided that the Company’s covenants under this Subsection 3.1 shall be reinstated at such time as the Company is no longer actively employing its commercially reasonable efforts to cause such registration statement to become effective.

 

Notwithstanding anything else in this Subsection 3.1 to the contrary, with respect to Holders who are Affiliates of Institutional Investors, the Company shall not be required to provide the information set forth in this Subsection 3.1 to each such Holder, and instead shall only be required to provide such information to a single investment advisor to be designated by each Institutional Investors from time to time; provided, however that in the case of the Fidelity Investors, the information may be provided to up to five (5) investment advisors.

 

3.2          Inspection. The Company shall permit each Major Investor (provided that the Board of Directors has not reasonably determined that such Major Investor is a Competitor), at such Major Investor’s expense, to visit and inspect the Company’s properties; examine its books of account and records; and discuss the Company’s affairs, finances, and accounts with its officers, during normal business hours of the Company as may be reasonably requested by the Major Investor; provided, however, that the Company shall not be obligated pursuant to this Subsection 3.2 to provide access to any information that it reasonably and in good faith considers to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form acceptable to the Company, or by Section 10.17 of the Stockholders’ Agreement dated on or about the date hereof by and among the Company and the parties thereto (the “Stockholders’ Agreement”)) or the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.

 

3.3          Observer Rights.

 

(a)           As long as T. Rowe Price owns not less than ten percent (10%) of the shares of the Series D Preferred Stock owned by it as of the date of this Agreement, the Company shall invite one (1) representative of T. Rowe Price to attend all meetings of its Board of Directors in a nonvoting observer capacity and, in this respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors; provided, however, that such representative shall agree to hold in confidence and trust all information so provided; and provided further, that the Company reserves the right to withhold any information and to exclude such representative from any meeting or portion thereof if the board reasonably concludes that access to such information or attendance at such meeting could adversely affect the attorney-client privilege between the Company and its counsel or result in disclosure of trade secrets or a conflict of interest, or if such Investor or its representative is a Competitor, each as determined in good faith by the Company.

 

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(b)           The Company shall invite one (1) representative of the Investors, which shall be designated by the Lead Investor, to attend all meetings of its Board of Directors and any committees thereof in a nonvoting observer capacity and, in this respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors or committee members at the same time and in the same manner as provided to such directors; provided, however, that such representative shall agree to hold in confidence and trust all information so provided; and provided further, that the Company reserves the right to withhold any information and to exclude such representative from any meeting or portion thereof if the board reasonably concludes that access to such information or attendance at such meeting could adversely affect the attorney-client privilege between the Company and its counsel or result in disclosure of trade secrets or a conflict of interest, or if such Investor or its representative is a Competitor, each as determined in good faith by the Company. The Company shall reimburse the representative for its reasonable expenses incurred in connection with attendance at meetings of the Board of Directors or any of its committees.

 

(c)           As long as the Lead Investor owns not less than ten percent (10%) of the shares of the Series E Preferred Stock it originally purchased under the Purchase Agreement (as adjusted for any stock split, stock dividend, combination, or other recapitalization or reclassification effected after the date hereof or an equivalent amount of Common Stock issued upon conversion thereof), the Lead Investor will be entitled to appoint one (1) representative to attend any meetings of the Company’s subsidiaries’ board of directors or managers (or a similar body) and any committee thereof, as applicable, in a nonvoting observer capacity on the same terms noted in Section 3.3(b) above, if any only if, any of the Company’s holders of Preferred Stock, acting alone as a separate class or series (or a combination thereof), are specifically entitled to appoint a board member or manager (or comparable person) of such Company subsidiary and elect to appoint such board member or manager (or comparable person). The Company shall reimburse the representative for its reasonable expenses incurred in connection with attendance at meetings of the Board of Directors or the meetings of the managers (or a similar body), as applicable and the committees thereof.

 

3.4          Termination of Information Rights and Observer Rights. The covenants set forth in Subsection 3.1, Subsection 3.2 and Subsection 3.3 shall terminate and be of no further force or effect (i) immediately before the consummation of a Qualified IPO, (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon a Deemed Liquidation Event, as such term is defined in Article FOURTH, Sections C.2.3.1(a) and (b) of the Certificate of Incorporation; provided that the Investors receive only cash and liquid securities in connection with such Deemed Liquidation Event, whichever event occurs first.

 

4.             Rights to Future Stock Issuances.

 

4.1          Right of First Offer. Subject to the terms and conditions of this Subsection 4.1 and applicable securities laws, if the Company proposes to offer or sell any New Securities, the Company shall first offer such New Securities to each Investor. An Investor shall be entitled to apportion the right of first offer hereby granted to it in such proportions as it deems appropriate, among itself and its Affiliates. For purposes of this Section 4.1, “Affiliates” shall be deemed to include Advisory Investors with the same or affiliated registered investment advisor.

 

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(a)           The Company shall give notice (the “Offer Notice”) to each Investor, stating (i) its bona fide intention to offer such New Securities, (ii) the number of such New Securities to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such New Securities.

 

(b)           By notification to the Company within twenty (20) business days after the Offer Notice is given, each Investor may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to that portion of such New Securities which equals the proportion that the Common Stock then held by such Investor (including all shares of Common Stock then issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held by such Investor) bears to the total Common Stock of the Company then outstanding (assuming full conversion and/or exercise, as applicable, of all Preferred Stock and other Derivative Securities). At the expiration of such twenty (20) business day period, the Company shall promptly notify each Investor that elects to purchase or acquire all the shares available to it (each, a “Fully Exercising Investor”) of any other Investor’s failure to do likewise. During the ten (10) day period commencing after the Company has given such notice, each Fully Exercising Investor may, by giving notice to the Company, elect to purchase or acquire, in addition to the number of shares specified above, up to that portion of the New Securities for which Investors were entitled to subscribe but that were not subscribed for by the Investors which is equal to the proportion that the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of Preferred Stock and any other Derivative Securities then held, by such Fully Exercising Investor bears to the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held, by all Fully Exercising Investors who wish to purchase such unsubscribed shares. The closing of any sale pursuant to this Subsection 4.1(b) shall occur within the later of ninety (90) days of the date that the Offer Notice is given and the date of initial sale of New Securities pursuant to Subsection 4.1(c).

 

(c)           If all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Subsection 4.1(b), the Company may, during the one hundred twenty (120) day period following the expiration of the periods provided in Subsection 4.1(b), offer and sell the remaining unsubscribed portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offer Notice. If the Company does not enter into an agreement for the sale of the New Securities within such period, or if such agreement is not consummated within sixty (60) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Major Investors in accordance with this Subsection 4.1.

 

(d)           The right of first offer in this Subsection 4.1 shall not be waived with respect to the rights of any holders of the Series E Preferred Stock unless such right is waived as to all Investors.

 

(e)           The right of first offer in this Subsection 4.1 shall not be applicable to Exempted Securities (as defined in the Certificate of Incorporation that is in effect as of the date hereof).

 

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4.2          Termination. The covenants set forth in Subsection 4.1 shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, or (ii) upon a Deemed Liquidation Event (as defined in Article FOURTH, Sections C.2.3.1(a) and (b) of the Certificate of Incorporation) provided that pursuant to such Deemed Liquidation Event the Investors receive only cash or liquid securities, whichever event occurs first.

 

5.             Additional Covenants.

 

5.1          Employee Agreements. The Company will cause (i) each person now or hereafter employed by it or by any subsidiary (or engaged by the Company or any subsidiary as a consultant/independent contractor) with access to confidential information and/or trade secrets to enter into a nondisclosure and proprietary rights assignment agreement; and (ii) each Key Employee to enter into a one (1) year noncompetition and nonsolicitation agreement, substantially in the form approved by the Board of Directors. In addition, the Company shall not amend, modify, terminate, waive, or otherwise alter, in whole or in part, any of the above-referenced agreements or any restricted stock agreement between the Company and any employee, without the consent of the Preferred Directors.

 

5.2          Employee Stock. Unless otherwise approved by the Board of Directors, all future employees and consultants of the Company who purchase, receive options to purchase, receive restricted stock units or receive awards of shares of the Company’s capital stock after the date hereof shall be required to execute option or restricted stock unit agreements, as applicable, providing for (i) with respect to options, vesting of shares over a four (4) year period, with the first twenty-five percent (25%) of such shares vesting following twelve (12) months of continued employment or service, and the remaining shares or units vesting in equal monthly installments over the following thirty-six (36) months, (ii) with respect to restricted stock units, time based vesting of restricted stock units and/or event based vesting of restricted stock units consistent with the terms of the 2015 Equity Incentive Plan and (ii) a market stand-off provision substantially similar to that in Subsection 2.11. In addition, unless otherwise approved by the Board of Directors, the Company shall retain a “right of first refusal” on employee transfers until the consummation of a Qualified IPO and shall have the right to repurchase unvested shares or units at cost upon termination of employment of a holder of restricted stock or restricted stock units.

 

5.3          Board Matters. Unless otherwise determined by the vote of a majority of the directors then in office, the Board of Directors shall meet at least quarterly in accordance with an agreed-upon schedule. The Company shall reimburse the nonemployee directors for all reasonable out-of-pocket travel expenses incurred (consistent with the Company’s travel policy) in connection with attending meetings of the Board of Directors.

 

5.4          Successor Indemnification. If the Company or any of its successors or assignees consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of members of the Board of Directors as in effect immediately before such transaction, whether such obligations are

 

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contained in the Company’s Bylaws, its Certificate of Incorporation, or elsewhere, as the case maybe.

 

5.5          Indemnification Matters. The Company hereby acknowledges that one (1) or more of the directors nominated to serve on the Board of Directors by the Investors (each a “Fund Director”) may have certain rights to indemnification, advancement of expenses and/or insurance provided by one or more of the Investors and certain of their affiliates (collectively, the “Fund Indemnitors”). The Company hereby agrees (a) that it is the indemnitor of first resort (i.e., its obligations to any such Fund Director are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Fund Director are secondary), (b) that it shall be required to advance the full amount of expenses incurred by such Fund Director and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by or on behalf of any such Fund Director to the extent legally permitted and as required by the Certificate of Incorporation or Bylaws of the Company (or any agreement between the Company and such Fund Director), without regard to any rights such Fund Director may have against the Fund Indemnitors, and, (c) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of any such Fund Director with respect to any claim for which such Fund Director has sought indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Fund Director against the Company.

 

5.6          Right to Conduct Activities. The Company hereby agrees and acknowledges that the Institutional Investors are professional investment funds, and as such invests in numerous portfolio companies, some of which may be deemed competitive with the Company’s business (as currently conducted or as currently propose to be conducted). The Company hereby agrees that, to the extent permitted under applicable law, the Institutional Investors shall not be liable to the Company for any claim arising out of, or based upon, (i) the investments by the Institutional Investors in any entity competitive with the Company, or (ii) actions taken by any partner, officer or other representative of the Institutional Investors to assist any such competitive company, whether or not such action was taken as a member of the board of directors of such competitive company or otherwise, and whether or not such action has a detrimental effect on the Company. Furthermore, the Company acknowledges that the execution of this Agreement and the Stockholders Agreement and the access to the Company’s confidential information hereunder or thereunder shall in no way be construed to prohibit or restrict an Institutional Investor or its investment advisor or such investment advisor’s other investment advisory clients from maintaining, making or considering investments in public or private companies, including, without limitation, companies that may compete either directly or indirectly with the Company, or from otherwise operating in the ordinary course of business; provided, however, that the foregoing shall not relieve (x) any of the Investors from liability associated with the unauthorized disclosure of the Company’s confidential information obtained pursuant to this Agreement, or (y) any director or officer of the Company from any liability associated with his or her fiduciary duties to the Company.

 

21

 

5.7          FCPA. The Company represents that it shall not (and shall not permit any of its subsidiaries or affiliates or any of its or their respective directors, officers, managers, employees, independent contractors, representatives or agents to) promise, authorize or make any payment to, or otherwise contribute any item of value to, directly or indirectly, to any third party, including any Non-U.S. Official (as (as such term is defined in the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”)), in each case, in violation of the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. The Company further represents that it shall (and shall cause each of its subsidiaries and affiliates to) cease all of its or their respective activities, as well as remediate any actions taken by the Company, its subsidiaries or affiliates, or any of their respective directors, officers, managers, employees, independent contractors, representatives or agents in violation of the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. The Company further represents that it shall (and shall cause each of its subsidiaries and affiliates to) maintain systems of internal controls (including, but not limited to, accounting systems, purchasing systems and billing systems) to ensure compliance with the FCPA, the U.K. Bribery Act, or any other applicable anti-bribery or anti-corruption law. Upon request, the Company agrees to provide responsive information and/or certifications concerning its compliance with applicable anti¬corruption laws. The Company shall promptly notify each Investor if the Company becomes aware of any Enforcement Action (as defined in the Purchase Agreement). The Company shall, and shall cause any direct or indirect subsidiary or entity controlled by it, whether now in existence or formed in the future, to comply with the FCPA. The Company shall use its best efforts to cause any direct or indirect subsidiary, whether now in existence or formed in the future, to comply in all material respects with all applicable laws.

 

5.8          Termination of Covenants. The covenants set forth in this Section 5, except for Subsections 5.4, 5.5 and 5.6, shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, or (ii) upon a Deemed Liquidation Event (as defined in Article FOURTH, Sections C.2.3.1(a) and (b) of the Certificate of Incorporation) provided that pursuant to such Deemed Liquidation Event the Investors receive only cash or liquid securities, whichever event occurs first.

 

6.             Miscellaneous.

 

6.1          Successors and Assigns. The rights under this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee of Registrable Securities that (i) is an Affiliate of a Holder; (ii) is a Holder’s Immediate Family Member or trust for the benefit of an individual Holder or one or more of such Holder’s Immediate Family Members; or (iii) after such transfer, holds at least 100,000 shares of Registrable Securities (subject to appropriate adjustment for stock splits, stock dividends, combinations, and other recapitalizations); provided, however, that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the Registrable Securities with respect to which such rights are being transferred; and (y) such transferee agrees in a written instrument delivered to the Company to be bound by and subject to the terms and conditions of this Agreement, including the provisions of Subsection 2.11. For the purposes of determining the number of shares of Registrable Securities held by a transferee, the holdings of a transferee (1) that is an Affiliate or stockholder of a Holder; (2) who is a Holder’s Immediate Family Member; or (3) that is a trust for the benefit of an individual Holder or such Holder’s Immediate Family

 

22

 

Member shall be aggregated together and with those of the transferring Holder; provided further that all transferees who would not qualify individually for assignment of rights shall have a single attorney-in-fact for the purpose of exercising any rights, receiving notices, or taking any action under this Agreement. The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.

 

6.2          Governing Law. This Agreement shall be governed by the internal law of the State of Delaware.

 

6.3          Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

6.4          Titles and Subtitles. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement.

 

6.5          Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or (i) personal delivery to the party to be notified; (ii) when sent, if sent by electronic mail or facsimile during the recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their addresses as set forth on Schedule A hereto, or to the principal office of the Company and to the attention of the Chief Executive Officer, in the case of the Company, or to such email address, facsimile number, or address as subsequently modified by written notice given in accordance with this Subsection 6.5. If notice is given to the Company, a copy shall also be sent to Morgan, Lewis & Bockius LLP, One Federal Street, Boston, MA 02110, Attention: Lawrence I. Silverstein, Facsimile No. (617) 428-6325 and if notice is given to the Investors, a copy shall also be sent to Cooley LLP, 500 Boylston Street, 14th Floor, Boston, Massachusetts 02116, Attention: Alfred L. Browne, III Facsimile No. (617) 937-2400.

 

6.6          Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived o(either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and the holders of a majority of the Registrable Securities then outstanding; provided that the Company may in its sole discretion waive compliance with Subsection 2.12(c) (and the Company’s failure to object promptly in writing after notification of a proposed assignment allegedly in violation of Subsection 2.12(c) shall be deemed to be a waiver); and provided further

 

23

 

that Sections 1.1, 2.11, 3.3, 3.4 and 5.8 shall not be amended or waived, and Sections 2.12, 2.13 and 4.1 shall not be amended or waived in any manner that adversely affects (i) the holders of Series D Preferred Stock, without the prior written consent of the holders of at least a majority of the Series D Preferred Stock (or Common Stock issued upon conversion thereof) then outstanding or (ii) the holders of Series E Preferred Stock, without the prior written consent of the holders of at least a majority of the Series E Preferred Stock (or Common Stock issued upon conversion thereof) then outstanding; and provided further that Sections 1.5, 1.18, 1.21, 1.22 and 2.10 shall not be amended or waived, and Section 5.6 shall not be amended or waived in any manner that adversely affects (i) the holders of Series D Preferred Stock, without the prior written consent of the holders of at least a majority of the Series D Preferred Stock (or Common Stock issued upon conversion thereof) then outstanding or (ii) the holders of Series E Preferred Stock, without the prior written consent of the holders of sixty-five percent (65%) of the Series E Preferred Stock (or Common Stock issued upon conversion thereof) then outstanding; and provided further that Sections 1.5(z), 1.18(w), 1.19, 3.3(b), 3.3(c) and 3.4 and this proviso of this Section 6.6 shall not be amended, modified or waived without the prior written consent of the Lead Investor; and provided further that Sections 2.11, 3.1, and 3.4 shall not be amended or waived in any manner that adversely affects the Advisory Investors without the prior written consent of the holders of at least a majority of the Registrable Securities held by all Advisory Investors; and provided further that any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party. Notwithstanding the foregoing, this Agreement may not be amended or terminated and the observance of any term hereof may not be waived with respect to any Investor without the written consent of such Investor, unless such amendment, termination, or waiver applies to all Investors in the same fashion (it being agreed that a waiver of the provisions of Section 4 with respect to a particular transaction shall be deemed to apply to all Investors in the same fashion if such waiver does so by its terms, notwithstanding the fact that certain Investors may nonetheless, by agreement with the Company, purchase securities in such transaction), provided, however, that, notwithstanding any waiver of any of the provisions of Section 4, in the event any Investor actually purchases any New Securities in any offering by the Company, then each other Investor shall be permitted to participate in such offering on a pro rata basis, in accordance with the other provisions set forth in Section 4 (and any amendment, modification or waiver of this proviso shall not be enforceable against any Investor unless such amendment, modification or waiver is contained in a written instrument signed by such Investor). The Company shall give prompt notice of any amendment or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, termination, or waiver. Any amendment, termination, or waiver effected in accordance with this Subsection 6.6 shall be binding on all parties hereto, regardless of whether any such party has consented thereto. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.

 

6.7          Severability. In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law.

 

24

 

6.8          Aggregation of Stock. All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliated persons may apportion such rights as among themselves in any manner they deem appropriate. For purposes of this Section 6.8, “Affiliates” shall be deemed to include Advisory Investors with the same or affiliated registered investment advisor”.

 

6.9          Additional Investors. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of Preferred Stock after the date hereof, whether pursuant to the Purchase Agreement or otherwise, any purchaser of such shares of Preferred Stock may become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement, and thereafter shall be deemed an “Investor” for all purposes hereunder. No action or consent by the Investors shall be required for such joinder to this Agreement by such additional Investor, so long as such additional Investor has agreed in writing to be bound by all of the obligations as an “Investor” hereunder.

 

6.10        Entire Agreement. This Agreement (including any Schedules and Exhibits hereto) constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.

 

6.11        Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Delaware or the United States District Court for the District of Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

 

WAIVER OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND

 

25

 

VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

6.12        Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or nondefaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to 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. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

6.13        Effect on Prior Agreement. Upon the execution and delivery of this Agreement by (a) the Company and (b) the Existing Investors representing the Majority Investors (as defined in the Prior Agreement), the Prior Agreement automatically shall terminate and be of no further force and effect and shall be superseded and replaced in its entirety as set forth in this Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

26

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	
 
    	
COMPANY: 
    
	
 
    	
 
    
	
 
    	
CARGURUS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Langley Steinert
    
	
 
    	
 
    	
Name:   
    	
Langley   Steinert
    
	
 
    	
 
    	
Title:   
    	
Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LEAD   INVESTOR:
    
	
 
    	
 
    
	
 
    	
GROWTH   CAPITAL FUND I, L.P.
    
	
 
    	
 
    
	
 
    	
By:   Growth Capital GP I, LLC
    
	
 
    	
Its:   General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    	
Stephanie   Simon, Managing Director
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
CARGURUS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
Langley   Steinert
    
	
 
    	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
LEAD   INVESTOR:
    
	
 
    	
 
    
	
 
    	
GROWTH   CAPITAL FUND I, L.P.
    
	
 
    	
 
    
	
 
    	
By:   Growth Capital GP I, LLC
    
	
 
    	
Its:   General Partner
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Stephanie Simon
    
	
 
    	
 
    	
Title:
    	
Stephanie   Simon, Managing Director
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INVESTORS:   
    
	
 
    	
 
    
	
 
    	
/s/   Langley Steinert
    
	
 
    	
Langley   Steinert
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Simon   Rothman
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
David   Parker
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Stephen   Kaufer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Nicholas   Shanny
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Ian   G. Smith
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Lawrence   I. Silverstein
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Matthew   J. Cushing
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Paul   A. Gould
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
David   Blundin
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INVESTORS:   
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Langley   Steinert
    
	
 
    	
 
    
	
 
    	
/s/   Simon Rothman
    
	
 
    	
Simon   Rothman
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
David   Parker
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Stephen   Kaufer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Nicholas   Shanny
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Ian   G. Smith
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Lawrence   I. Silverstein
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Matthew   J. Cushing
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Paul   A. Gould
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
David   Blundin
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INVESTORS:   
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Langley   Steinert
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Simon   Rothman
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   David Parker
    
	
 
    	
David   Parker
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Stephen   Kaufer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Nicholas   Shanny
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Ian   G. Smith
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Lawrence   I. Silverstein
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Matthew   J. Cushing
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Paul   A. Gould
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
David   Blundin
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INVESTORS:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Langley   Steinert
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Simon   Rothman
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
David   Parker
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Stephen Kaufer
    
	
 
    	
Stephen   Kaufer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Nicholas   Shanny
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Ian   G. Smith
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Lawrence   I. Silverstein
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Matthew   J. Cushing
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Paul   A. Gould
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
David   Blundin
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
INVESTORS:   
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Langley   Steinert
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Simon   Rothman
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
David   Parker
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Stephen   Kaufer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Nicholas   Shanny
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Ian G. Smith
    
	
 
    	
Ian   G. Smith
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Lawrence   I. Silverstein
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Matthew   J. Cushing
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Paul   A. Gould
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
David   Blundin
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
Argonaut   22 LLC
    
	
 
    	
By:   
    	
Spinnaker   Capital LLC, its Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Anastasios Parafestas
    
	
 
    	
 
    	
Name:   
    	
Anastasios   Parafestas
    
	
 
    	
 
    	
Title:   
    	
Sole   Managing Member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Promerica   Capital LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Anastasios Parafestas
    
	
 
    	
 
    	
Name:   
    	
Anastasios   Parafestas
    
	
 
    	
 
    	
Title:   
    	
Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GC   Holdings Investors LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Anastasios Parafestas
    
	
 
    	
 
    	
Name:   
    	
Anastasios   Parafestas
    
	
 
    	
 
    	
Title:   
    	
Manager
    
	
 
    	
 
    
	
 
    	
Allen &   Company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
Argonaut   22 LLC
    
	
 
    	
By:   
    	
Spinnaker   Capital LLC, its Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
Promerica   Capital LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
GC   Holdings Investors LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
Allen &   Company LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Peter DiIorio
    
	
 
    	
 
    	
Name:   
    	
Peter   DiIorio
    
	
 
    	
 
    	
Title:   
    	
General   Counsel
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
The   Matthews G. Rightmire Trust, dated 12/22/05
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
The   NP 2003 Family Trust
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Anastasios Parafestas
    
	
 
    	
 
    	
Name:   
    	
Anastasios   Parafestas
    
	
 
    	
 
    	
Title:   
    	
Co-Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Fowler   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
					

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
T.   Rowe Price New Horizons Fund, Inc.
    
	
 
    	
T.   Rowe Price New Horizons Trust
    
	
 
    	
T.   Rowe Price U.S. Equities Trust
    
	
 
    	
Each   account, severally and not jointly
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   T. Rowe Price Associates, Inc., Investment Adviser
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   J. David Wagner
    
	
 
    	
Name:
    	
J.   David Wagner
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
T.   Rowe Price Associates, Inc.
    
	
 
    	
100   East Pratt Street
    
	
 
    	
Baltimore,   MD 21202
    
	
 
    	
Attn:   Matthew Dow, Vice President
    
	
 
    	
Phone:   410-345-3468
    
	
 
    	
E-mail:   matthew_dow@troweprice.com 
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
T. Rowe   Price Small-Cap Stock Fund, Inc.
    
	
 
    	
T.   Rowe Price Institutional Small-Cap Stock Fund
    
	
 
    	
T.   Rowe Price Personal Strategy Income Fund
    
	
 
    	
T.   Rowe Personal Strategy Balanced Fund
    
	
 
    	
T.   Rowe Price Personal Strategy Growth Fund
    
	
 
    	
T.   Rowe Price Personal Strategy Balanced Portfolio
    
	
 
    	
U.S.   Small-Cap Stock Trust
    
	
 
    	
VALIC   Company I - Small Cap Fund
    
	
 
    	
TD   Mutual Funds - TD U.S. Small-Cap Equity Fund
    
	
 
    	
T.   Rowe Price U.S. Small-Cap Core Equity Trust
    
	
 
    	
Advantus Capital   Management, Inc. Minnesota Life Insurance Co.
    
	
 
    	
Costco   401(k) Retirement Plan
    
	
 
    	
Each   account, severally and not jointly
    
	
 
    	
 
    
	
 
    	
By:   T. Rowe Price Associates, Inc., Investment Adviser or Subadviser,   as applicable
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gregory A. McCrickand
    
	
 
    	
Name:
    	
Gregory   A. McCrickand
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
T.   Rowe Price Associates, Inc.
    
	
 
    	
100   East Pratt Street
    
	
 
    	
Baltimore,   MD 21202
    
	
 
    	
Attn:   Matthew Dow, Vice President
    
	
 
    	
Phone:   410-345-3468
    
	
 
    	
E-mail:   matthew_dow@troweprice.com 
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
T.   Rowe Price Small-Cap Value Fund, Inc.
    
	
 
    	
T.   Rowe Price U.S. Small-Cap Value Equity Trust
    
	
 
    	
Each   account, severally and not jointly
    
	
 
    	
 
    
	
 
    	
By:   T. Rowe Price Associates, Inc., Investment Adviser
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   J. David Wagner
    
	
 
    	
Name:
    	
J.   David Wagner
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
T.   Rowe Price Associates, Inc.
    
	
 
    	
100   East Pratt Street
    
	
 
    	
Baltimore,   MD 21202
    
	
 
    	
Attn:   Matthew Dow, Vice President
    
	
 
    	
Phone:   410-345-3468
    
	
 
    	
E-mail:   matthew_dow@troweprice.com 
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

 

	
 
    	
FOXHAVEN   MASTER FUND, LP
    
	
 
    	
 
    
	
 
    	
By:   Foxhaven Asset Management, LP, its Investment Manager
    
	
 
    	
 
    
	
 
    	
By: Piedmont P&L, LLC, its   general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Nicholas Lawler
    
	
 
    	
Name:   
    	
Nicholas   Lawler
    
	
 
    	
Title:   
    	
Managing   Member
    

 

 

	
 
    	
FOXWAY,   LP
    
	
 
    	
 
    
	
 
    	
By:   Foxhaven Asset Management, LP, its Investment Manager
    
	
 
    	
 
    
	
 
    	
By: Piedmont P&L, LLC, its   general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Nicholas Lawler
    
	
 
    	
Name:   
    	
Nicholas   Lawler
    
	
 
    	
Title:   
    	
Managing   Member
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
FIDELITY   SECURITIES FUND: FIDELITY OTC PORTFOLIO
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Colm Hogan
    
	
 
    	
Name:   
    	
Colm   Hogan
    
	
 
    	
Title:   
    	
Authorized   Signatory
    

 

	
 
    	
 
    
	
 
    	
FIDELITY   OTC COMMINGLED POOL
    
	
 
    	
 
    
	
 
    	
By:   Fidelity Management & Trust Co.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Colm Hogan
    
	
 
    	
Name:   
    	
Colm   Hogan
    
	
 
    	
Title:   
    	
Authorized   Signatory
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
T.   Rowe Price New Horizons Fund, Inc.
    
	
 
    	
T.   Rowe Price New Horizons Trust
    
	
 
    	
T.   Rowe Price U.S. Equities Trust
    
	
 
    	
Each   account, severally and not jointly
    
	
 
    	
 
    
	
 
    	
By:   T. Rowe Price Associates, Inc., Investment Adviser
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael Blandino
    
	
 
    	
Name:
    	
Michael   Blandino
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
T.   Rowe Price Associates, Inc.
    
	
 
    	
100   East Pratt Street
    
	
 
    	
Baltimore,   MD 21202
    
	
 
    	
Attn:   Matthew Dow, Vice President
    
	
 
    	
Phone:   410-345-3468
    
	
 
    	
E-mail:   matthew_dow@troweprice.com 
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

	
 
    	
T.   Rowe Price Small-Cap Stock Fund, Inc.
    
	
 
    	
T.   Rowe Price Institutional Small-Cap Stock Fund
    
	
 
    	
T.   Rowe Price Personal Strategy Income Fund
    
	
 
    	
T.   Rowe Personal Strategy Balanced Fund
    
	
 
    	
T.   Rowe Price Personal Strategy Growth Fund
    
	
 
    	
T.   Rowe Price Personal Strategy Balanced Portfolio
    
	
 
    	
U.S.   Small-Cap Stock Trust
    
	
 
    	
VALIC   Company I — Small Cap Fund
    
	
 
    	
TD   Mutual Funds — TD U.S. Small-Cap Equity Fund
    
	
 
    	
T.   Rowe Price U.S. Small-Cap Core Equity Trust
    
	
 
    	
Advantus Capital   Management, Inc. Minnesota Life Insurance Co.
    
	
 
    	
Costco   401(k) Retirement Plan
    
	
 
    	
Each   account, severally and not jointly
    
	
 
    	
 
    
	
 
    	
By:   T. Rowe Price Associates, Inc., Investment Adviser or Subadviser,   as applicable
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gregory A. McCrickand
    
	
 
    	
Name:
    	
Gregory   A. McCrickand
    
	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
T.   Rowe Price Associates, Inc.
    
	
 
    	
100   East Pratt Street
    
	
 
    	
Baltimore,   MD 21202
    
	
 
    	
Attn:   Matthew Dow, Vice President
    
	
 
    	
Phone:   410-345-3468
    
	
 
    	
E-mail:   matthew_dow@troweprice.com 
    

 

SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

 

 

SCHEDULE A

 

INVESTORS

 

Name and Address

 

Series A Preferred Stock

 

Argonaut 22 LLC

One Joy Street

Boston, MA 02108

 

GC Holdings Investors LLC

One Joy Street

Boston, MA 02108

 

Promerica Capital LLC

c/o Peter M. Nicholas

P.O. Box 1558

Boca Grande, FL 33921

With a copy to:

One Joy Street

Boston, MA 02108

 

Allen & Company LLC

711 Fifth Avenue

New York, NY 10022

 

Langley Steinert

199 Nashawtuc Rd

Concord, MA 01742

 

Steve Kaufer

95 Dudley Road

Newton, MA 02459

 

David Parker

77 Revere Street

Boston, Ma 02114

 

Nicholas Shanny

21 Endicott Street

Newton, MA 02459

 

The Matthews G. Rightmire Trust, dated 12/22/05

10 Conant Road

Hanover, NH 03755

 

 

Lawrence I. Silverstein

40 Lawmarissa Road

Newton, MA 02468

 

Matthew J. Cushing

25 Edgemere Road

Lynnfield, MA 01940

 

Simon Rothman

1205 Forest Avenue

Palo Alto, CA 94301

 

The NP 2003 Family Trust

C/O The Bollard Group LLC

One Joy Street

Boston, MA 02108

 

Ian G. Smith

197 Greenoaks Drive

Atherton, CA 94027

 

Paul A. Gould

70 South Quaker Hill Road

Pawling, NY 12564

 

David Blundin

162 Pine Ridge Road

North Andover, MA 01845

 

Series B Preferred Stock

 

Argonaut 22 LLC

One Joy Street

Boston, MA 02108

 

GC Holdings Investors LLC

One Joy Street

Boston, MA 02108

 

 

Promerica Capital LLC

c/o Peter M. Nicholas

P.O. Box 1558

Boca Grande, FL 33921

With a copy to:

One Joy Street

Boston, MA 02108

 

Langley Steinert

199 Nashawtuc Rd

Concord, MA 01742

 

Allen & Company LLC

711 Fifth Avenue

New York, NY 10022

 

The NP 2003 Family Trust

C/O The Bollard Group LLC

One Joy Street

Boston, MA 02108

 

Fowler LLC

9 E 79th Street

New York, NY 10075

 

Benjamin Peretsman

9 E 79th Street

New York, NY 10075

 

Jessica Peretsman

9 E 79th Street

New York, NY 10075

 

Tyler Clement

9 E 79th Street

New York, NY 10075

 

Peter Clement

9 E 79th Street

New York, NY 10075

 

Paul A. Gould

70 South Quaker Hill Road

Pawling, NY 12564

 

 

Ian G. Smith

197 Greenoaks Drive

Atherton, CA 94027

 

Stephen D. Greenberg

1120 Fifth Avenue

New York, NY 10128

 

Kaveh Khosrowshahi

411 Sleepy Hollow Road

Briarcliff Manor, NY 10510

 

Harry Wagner

14 E 75th Street, Apartment 5A

New York, NY 10021

 

David M. Wehner

149 Linden Avenue

Atherton, CA 94027

 

Salima Vahabzadeh

124 Hudson Street

New York, NY 10013

 

Series C Preferred Stock

 

Argonaut 22 LLC

One Joy Street

Boston, MA 02108

 

GC Holdings Investors LLC

One Joy Street

Boston, MA 02108

 

Promerica Capital LLC

c/o Peter M. Nicholas

P.O. Box 1558

Boca Grande, FL 33921

With a copy to:

One Joy Street

Boston, MA 02108

 

Langley Steinert

199 Nashawtuc Rd

Concord, MA 01742

 

 

Allen & Company LLC

711 Fifth Avenue

New York, NY 10022

 

Fowler LLC

9 E 79th Street

New York, NY 10075

 

Paul A. Gould

70 South Quaker Hill Road

Pawling, NY 12564

 

Ian G. Smith

197 Greenoaks Drive

Atherton, CA 94027

 

Stephen D. Greenberg

1120 Fifth Avenue

New York, NY 10128

 

The NP 2003 Family Trust

C/O The Bollard Group LLC

One Joy Street

Boston, MA 02108

 

Kaveh Khosrowshahi

411 Sleepy Hollow Road

Briarcliff Manor, NY 10510

 

Salima Vahabzadeh

124 Hudson Street

New York, NY 10013

 

David M. Wehner

149 Linden Avenue

Atherton, CA 94027

 

Harry Wagner

14 E 75th Street, Apartment 5A

New York, NY 10021

 

Lawrence I. Silverstein

40 Lawmarissa Road

Newton, MA 02468

 

 

Matthew J. Cushing

25 Edgemere Road

Lynnfield, MA 01940

 

Series D Preferred Stock

 

T. Rowe Price New Horizons Fund, Inc.

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

T. Rowe Price New Horizons Trust

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

T. Rowe Price U.S. Equities Trust

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

T. Rowe Price Small-Cap Stock Fund, Inc.

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

T. Rowe Price Institutional Small-Cap Stock Fund

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

T. ROWE PRICE PERSONAL STRATEGY

INCOME FUND

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

 

T. ROWE PRICE PERSONAL STRATEGY

BALANCED FUND

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

T. ROWE PRICE PERSONAL STRATEGY

GROWTH FUND

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

T. ROWE PRICE PERSONAL STRATEGY

BALANCED PORTFOLIO

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

U.S. Small-Cap Stock Trust

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

VALIC Company I- Small Cap Fund

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

TD Mutual Funds - TD U.S. Small-Cap Equity Fund

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

T. Rowe Price U.S. Small-Cap Core Equity Trust

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

 

Advantus Capital Management, Inc. Minnesota Life

Insurance Co.

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

Costco 401(k) Retirement Plan

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

T. Rowe Price Small-Cap Value Fund, Inc.

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

T. Rowe Price U.S. Small-Cap Value Equity Trust

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

T. Rowe Price U.S. Equities Trust

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

 

Series E Preferred Stock

 

Growth Capital Fund I, L.P.

Winslow Capital Management, LLC

4720 IDS Tower

80 South 8th Street

Minneapolis, MN 55402

 

Fidelity Securities Fund: Fidelity OTC Portfolio

The Northern Trust Company

Attn: Trade Securities Processing, C-1N

801 South Canal Street

Chicago, IL 60607

 

 

Fidelity Securities Fund: Fidelity OTC Portfolio

Reference Account # F68304

Email: NTINQUIRY@NTRS.COM

Fax number: 312-557-5417

 

Fidelity OTC Commingled Pool

Brown Brothers Harriman & Co.

Harborside Financial Center

1150 Plaza Five

Jersey City NJ 07311

Attn: Michael Lerman 15th Floor

Corporate Actions

Email: michael.lerman@bbh.com

Fax number: 617 772-2418

 

Foxhaven Master Fund, LP

Foxhaven Asset Management, LP

Attn: Nick Lawler

410 E Water Street, Suite 888

Charlottesville, VA 22902

 

Foxway, LP

Foxhaven Asset Management, LP

Attn: Nick Lawler

410 E Water Street, Suite 888

Charlottesville, VA 22902

 

T. Rowe Price New Horizons Fund, Inc.

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

 

T. Rowe Price New Horizons Trust

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

 

 

T. Rowe Price U.S. Equities Trust

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

 

T. Rowe Price Small-Cap Stock Fund, Inc.

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

 

T. Rowe Price Institutional Small-Cap Stock Fund

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

 

T. ROWE PRICE PERSONAL STRATEGY INCOME FUND

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

 

T. ROWE PRICE PERSONAL STRATEGY BALANCED FUND

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

 

 

T. ROWE PRICE PERSONAL STRATEGY GROWTH FUND

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

 

T. ROWE PRICE PERSONAL STRATEGY BALANCED PORTFOLIO

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

 

U.S. Small-Cap Stock Trust

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

 

VALIC Company I — Small Cap Fund

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

 

TD Mutual Funds — TD U.S. Small-Cap Equity Fund

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

 

 

T. Rowe Price U.S. Small-Cap Core Equity Trust

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

 

Advantus Capital Management, Inc. Minnesota Life Insurance Co.

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

 

Costco 401(k) Retirement Plan

c/o T. Rowe Price Associates, Inc.

100 East Pratt Street

Baltimore, MD 21202

Attn: Matthew Dow, Vice President

Phone: 410-345-3468

E-mail: matthew_dow@troweprice.com

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