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FIFTH AMENDED AND RESTATED INVESTORS? RIGHTS AGREEMENT

Investors Rights Agreement

FIFTH AMENDED AND RESTATED

 

INVESTORS? RIGHTS AGREEMENT
 | Document Parties: WINTEGRA INC | Magnum Communication Fund L.P. | Magnum Communication Fund (Israel) L.P. | Magnum Communication Entrepreneurs Fund L.P. | Concord Ventures II (Israel), L.P. | Concord Ventures II (Cayman), L.P. | Concord Venture Advisors II (Cayman), L.P. You are currently viewing:
This Investors Rights Agreement involves

WINTEGRA INC | Magnum Communication Fund L.P. | Magnum Communication Fund (Israel) L.P. | Magnum Communication Entrepreneurs Fund L.P. | Concord Ventures II (Israel), L.P. | Concord Ventures II (Cayman), L.P. | Concord Venture Advisors II (Cayman), L.P.

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Title: FIFTH AMENDED AND RESTATED INVESTORS? RIGHTS AGREEMENT
Governing Law: Delaware     Date: 3/30/2006

FIFTH AMENDED AND RESTATED

 

INVESTORS? RIGHTS AGREEMENT
, Parties: wintegra inc , magnum communication fund l.p. , magnum communication fund (israel) l.p. , magnum communication entrepreneurs fund l.p. , concord ventures ii (israel)  l.p. , concord ventures ii (cayman)  l.p. , concord venture advisors ii (cayman)  l.p.
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FIFTH AMENDED AND RESTATED

 

INVESTORS’ RIGHTS AGREEMENT

 

 

 

February 9, 2006

 

 

 


 

FIFTH AMENDED AND RESTATED

 

INVESTORS’ RIGHTS AGREEMENT

 

THIS FIFTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT is made as of the 9 th day of February, 2006, by and among Wintegra, Inc., a Delaware corporation (the “ Company ”), the investors listed on Schedule A hereto, each of which is herein referred to as a “ D-Investor ”, the holders of Series A Preferred Shares listed on Schedule B hereto, each of which is herein referred to as an “A-Investor”, the holders of Series B Preferred Shares listed on Schedule C hereto, each of which is herein referred to as an “B-Investor” and the holders of Series C Preferred Shares listed on Schedule D hereto, each of which is referred to as a " C-Investor " (the D-Investors, C-Investors, B-Investors and the A-Investors shall jointly be referred to as the “Investors” ) and the holders of Common Stock listed on Schedule E hereto, each of whom is herein referred to as a “ Founder .”

 

RECITALS

 

WHEREAS, the Company, the Founders, the C-Investors, the B-Investors and the A-Investors are parties to the Fourth Amended and Restated Investors’ Rights Agreement dated January, 2005 (the “ Previous IR Agreement ”); and

 

WHEREAS, the parties to the Previous IR Agreement wish to amend and restate the Previous IR Agreement so that this Agreement shall govern the rights of the Investors and the Founders to cause the Company to register shares of Common Stock issued or issuable to them and certain other matters as set forth herein and shall replace the Previous IR Agreement;

 

NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

 

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

 

1.1    Definitions . Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Series D Agreement. For purposes of this Agreement:

 

(i)    The term “ Act ” means the Securities Act of 1933, as amended.

 

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

 

(iii)    The term “ Holder ” means any person owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with Section 1.11 hereof; provided, however, that the Founders shall not be deemed to be Holders for purposes of Section 1.2, 1.12 and 1.11.

 


 

(iv)    The term “ Major Holder ” means a Holder that holds at least 3% of the Registrable Securities then outstanding; provided however, that each of TI, CDIB and Grindylow Group Ltd. (“ Grindylow ”) shall each be considered a Major Holder for so long as it holds at least 2% of the Registrable Securities and further provided that PMC-Sierra, Inc. (" PMC-Sierra ") shall be considered a Major Holder for so long as it holds more than 1.5% of the Registrable Securities.

 

(v)    The term “ Major Investor ” means an Investor that holds at least 3% of the Registrable Securities then outstanding, provided however, that Grindylow shall be considered a “Major Investor” for so long as it holds at least 2% of the Registrable Securities then outstanding (on an as-converted basis) and further provided that PMC-Sierra shall be considered a Major Investor for so long as it holds more than 1.5% of the Registrable Securities then outstanding (on an as-converted basis).

 

(vi)    The term “ Initial Offering ” means the Company’s first firm commitment underwritten public offering of its Common Stock under the Act.

 

(vii)    The term “ 1934 Act ” means the Securities Exchange Act of 1934, as amended.

 

(viii)    The term “Common Stock ” means the Company’s Common Stock, par value $0.001 per share.

 

(ix)    The term “ Preferred Stock ” means the Company’s Series A Preferred Stock, par value $0.001 per share, the Company’s Series B Preferred Stock, par value $0.001 per share, the Company’s Series C Preferred Stock, par value $0.001 per share and the Company’s Series D Preferred Stock, par value $0.001 per share (the “ Series D Preferred Stock ”) issued to the Investors, as defined in the Series D Agreement.

 

(x)    The term “ register ,” “ registered ,” and “ registration ” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or document.

 

(xi)    The term “ Preferred Registrable Securities ” means (i) the Common Stock issuable or issued upon conversion of the Preferred Stock, (ii) any Common Stock of the Company 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 (i) above, excluding in all cases, however, any Registrable Securities sold by a person in a transaction in which his rights under this Section 1 are not assigned.

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(xii)    The term “ Founder Registrable Securities ” means (i)  Common Stock held by the Founders as of the date of the signing of this Agreement, provided, however, that such shares of Common Stock shall not be deemed Registrable Securities for the purposes of Section 1.2, 1.11 and 1.12 and (ii) any Common Stock of the Company 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 (i) above, excluding in all cases, however, any Registrable Securities sold by a Founder in a transaction in which his rights under this Section 1 are not assigned.

 

(xiii)    The term “ Registrable Securities ” means Preferred Registrable Securities and Founder Registrable Securities.

 

(xiv)    The term “ Merger and Acquisition " means (A) the acquisition of this Company by another entity by means of any transaction or series of related trans-actions (including, without limitation, any reorganization, merger or consolidation) that results in the transfer of fifty percent (50%) or more of the outstanding voting power of this corporation; or (B)  a sale of all or substantially all of the Company’s assets or shares.

 

(xv)    The number of shares of " Registrable Securities then outstanding " shall be determined by the number of Common Stock outstanding, calculated on an as-converted basis, which are Registrable Securities.

 

(xvi)    Permitted Transferee ” means with regards to any shareholder of the Company, any person or entity, directly or indirectly, that controls or is controlled by or is under common control with such shareholder, any corporation wholly owned by such shareholder, the shareholders of such shareholder, the spouse or member of such shareholder’s immediate family, or a custodian, trustee (including a trustee of a voting trust), executor, or other fiduciary for the account of such shareholder’s spouse or members of such shareholder’s immediate family, or a trust for such shareholder’s own self, or a charitable remainder trust, or, if the shareholder is a partnership, any partner of the partnership or any other partnership or other entity managed by the same manager, and the general or limited partners or managing entities of such shareholder, or any affiliate of such shareholder or partner under common or related management or control with such shareholder, and in the case of either Genesis Partners II LDC or Genesis Partners II (Israel) L.P., either of Genesis Partners I L.P. or Genesis Partners I (Cayman) L.P., provided that each such transferee or assignee, prior to the completion of the sale, transfer, or assignment shall have executed documents assuming the obligations of such shareholder under this Agreement.

 

Rights to transfer shares of the Company to a Permitted Transferee are intended to facilitate a shareholder's allocation of such shareholder's shares of the Company among commonly controlled or similarly situated persons or entities and are not intended to be used to facilitate a change in control of the Company.

 

(xvii)    TI ” means Texas Instruments Incorporated, a company incorporated under the laws of the state of Delaware.

 

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1.2    Request for Registration .

 

(i)    Subject to the conditions of this Section 1.2, if the Company shall receive within the five (5) year period commencing 90 days after the effective date of the Initial Offering a written request from the Holders of at least 35% of the Preferred Registrable Securities then outstanding (the “ Initiating Holders ”) that the Company file a registration statement under the Act covering the registration of Registrable Securities that requests the registration of shares in a minimum amount of five million United States dollars ($5,000,000), then the Company shall, within twenty (20) days of the receipt thereof, give written notice of such request to all Holders, and subject to the limitations of this Section 1.2, use best efforts to effect, as soon as practicable, the registration under the Act of all Registrable Securities that the Holders request to be registered in a written request received by the Company within twenty (20) days of the mailing of the Company’s notice pursuant to this Section 1.2(i).

 

(ii)    If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 1.2 and the Company shall include such information in the written notice referred to in Section 1.2(i). In such event the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by a majority in interest of the Initiating Holders which underwriter or underwriters shall be reasonably acceptable to a majority in interest of the Initiating Holders.

 

(iii)    If the underwriter advises the Company that marketing factors require a limitation of the number of securities underwritten (including Registrable Securities), then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on the number of Registrable Securities held by all such Holders (including the Initiating Holders). Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.

 

(iv)    The Company shall not be required to effect a registration pursuant to this Section 1.2:

 

(a) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as may be required under the Act; or

 

(b) after the Company has effected two (2) registrations pursuant to this Section 1.2, and such registrations have been declared or ordered effective; or

 

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(c) during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date one hundred eighty (180) days following the effective date of, or, if earlier, upon completion of the distribution contemplated by, a Company-initiated registration subject to Section 1.3 below, provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective; or

 

(d) if the Initiating Holders propose to dispose of Registrable Securities that may be registered on Form S-3 pursuant to Section 1.4 hereof; or

 

(e) if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 1.2, a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its shareholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders, provided that such right to delay a request shall be exercised by the Company not more than once in any twelve (12)-month period.

 

1.3    Company Registration . If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for shareholders other than the Holders) any of its stock or other securities under the Act in connection with the public offering of such securities (other than: (a) a registration relating solely to the sale of securities to participants in a Company stock plan, (b) a registration relating to a corporate reorganization, merger, acquisition or other transaction under Rule 145 of the Act, (c) 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 which, for the sake of clarification, shall not be deemed to include a registration on Form S-3 or any equivalent form), or (d) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered), the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder given within twenty (20) days after mailing of such notice by the Company in accordance with Section 3.5, the Company shall, subject to the provisions of Section 1.3(ii), use all reasonable efforts to cause to be registered under the Act all of the Registrable Securities that each such Holder has requested to be registered.

 

(i)    Right to Terminate Registration . The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 1.3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The expenses of such withdrawn registration shall be borne by the Company in accordance with Section 1.7 hereof.

 

(ii)    Underwriting Requirements . In connection with any offering involving an underwriting of shares of the Company’s capital stock, the Company shall not be required under this Section 1.3 to include any of the Holders’ securities in such underwriting unless they accept the terms of the underwriting, in customary form, as agreed upon between the Company and the underwriters selected by it (or by other persons entitled to select the underwriters) and enter into an underwriting agreement in customary form with an underwriter or underwriters selected by the Company and approved by majority in interest of holders of Preferred Registrable Securities, and then only in such quantity as the underwriters determine in their sole discretion will not materially and adversely jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by Holders to be included in such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion could materially and adversely jeopardize 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, that the underwriters determine in their sole discretion will not materially and adversely jeopardize the success of the offering, the securities so included to be apportioned among the holders of Registrable Securities requested to be included in such offering and among the holders of the Founder Registrable Securities requested to be included in such offering as follows: 75% of the shares to be sold by shareholders shall be allocated among the holders of Preferred Registrable Securities and 25% shall be allocated between the holders of the Founder Registrable Securities, with the internal allocation among such groups being on a pro rata basis based on the number of Registrable Securities held by all the holders requested to be included in such offering, provided however, that in no event shall the number of Founder Registrable Securities sold by any Founder (as a percentage of all shares sold in the offering by shareholders) exceed the Founder’s percentage holding in the Company.

 

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(iii)    For purposes of the preceding parenthetical concerning apportionment, for any Stockholder that is a Holder of Registrable Securities that is a partnership or corporation, the partners, retired partners and stockholders of such Holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons (“Related Party”) shall be deemed to be a single “Holder,” as applicable and any pro rata reduction with respect to such “Holder” shall be based upon the aggregate amount of Registrable Securities owned by all such related entities and individuals.

 

1.4    Form S-3 Registration . In case the Company shall receive from the (i) Initiating Holders (as such term is defined in section 1.2 above) or (ii) the Holders of the majority in interest of the Founder Registrable Securities (" Initiating Founders "), a written request or requests that the Company effect a registration on Form S-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company shall:

 

(i)    promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders; and

 

(ii)    use best efforts to effect, as soon as practicable, such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company, provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this section 1.4:

 

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(a) if Form S-3 is not available for such offering by the Holders;

 

(b) if the Company shall furnish to the Holders a certificate signed by the Chairman of the Board of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its shareholders for such Form S-3 Registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than ninety (90) days after receipt of the request of the Holder or Holders under this Section 1.4; provided, however, that the Company shall not utilize this right more than once in any twelve month period;

 

(c) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.

 

(iii)    Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Holders. Registrations effected pursuant to this Section 1.4 shall not be counted as requests for registration effected pursuant to Sections 1.2.

 

1.5    Obligations of the Company . Whenever required under this Section 1 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

 

(i)    prepare and file with the SEC a registration statement with respect to such Registrable Securities and use best efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred eighty (180) days or, if earlier, until the distribution contemplated in the Registration Statement has been completed;

 

(ii)    prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement;

 

(iii)    furnish to the Holders such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them;

 

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(iv)    use best efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions;

 

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

 

(vi)    notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Act or the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;

 

(vii)    notify each Holder of Registrable Securities covered by such registration statement, promptly after the Company shall receive notice thereof, of the time when such registration statement becomes effective or when any amendment or supplement or any prospectus forming a part of such registration has been filed.

 

(viii)    notify each Holder of Registrable Securities covered by such registration statement, promptly of any request by the SEC for the amending of supplementing of such registration statement or prospectus for additional information.

 

(ix)    advise each Holder whose Registrable Shares are included in such registration statement promptly after the Company shall receive notice or otherwise obtain knowledge of the issuance of any order by the SEC suspending the effectiveness of such registration statement or amendment thereto or of the initiation or threatening of any proceeding for that purpose; and promptly use its best efforts to prevent the issuance of any stop order or to obtain its withdrawal promptly if a stop order should be issued.

 

(x)    use its best efforts to furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this agreement on the date that such Registrable Securities are delivered to the underwriters for sale in connection with a registration pursuant to this agreement, if such securities are being sold through underwriters, on the date that the registration statement with respect to such securities becomes effective, (i) an opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any.

 

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(xi)    cause all such Registrable Securities registered pursuant hereunder to be listed on each securities exchange on which similar securities issued by the Company are then listed; and

 

(xii)    provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.

 

1.6    Information from Holder . It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 1 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required under the Act to effect the registration of such Holder’s Registrable Securities.

 

1.7    Expenses of Registration . All expenses other than underwriting discounts and commissions incurred in connection with registrations, filings or qualifications pursuant to Sections 1.2, 1.3 and 1.4 including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements of one counsel for the selling Holders shall be borne by the Company. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 1.2 or Section 1.4 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 participating Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be requested in the withdrawn registration), unless, in the case of a registration requested under Section 1.2, the Holders of a majority of the Registrable Securities agree to forfeit their right to one demand registration pursuant to Section 1.2, provided, however, that if at the time of such withdrawal, the Holders have learned of a material adverse change in the condition, business, or prospects of the Company that is different from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness following disclosure by the Company of such material adverse change, then the Holders shall not be required to pay any of such expenses and shall retain their rights pursuant to Section 1.2 or 1.4.

 

1.8    Delay of Registration . No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 1.

 

1.9    Indemnification . In the event any Registrable Securities are included in a registration statement under this Section 1:

 

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(i)    To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners or officers, directors and shareholders of each Holder, legal counsel and accountants for each Holder, any underwriter (as defined in the Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Act or the 1934 Act, against any losses, claims, damages or liabilities (joint or several) to which they may become subject under the Act, the 1934 Act or any state securities laws, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based


 
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