Exhibit 4.2
EXECUTION COPY
FIFTH AMENDED AND RESTATED INVESTORS
RIGHTS AGREEMENT
THIS FIFTH AMENDED AND RESTATED
INVESTORS RIGHTS AGREEMENT (this “Agreement”) is made
as of the 29th day of June, 2004, by and among BIGBAND NETWORKS,
INC. a Delaware corporation (the “Company”); and those
individuals and entities set forth in Exhibit A hereto
(each, an “Investor” and together, severally but not
jointly the “Investors”); and N.B.T. Ltd., a company
organized under the laws of the British Virgin Islands
(“N.B.T.”), Amir Bassan-Eskenazi, an individual
(“ABE”) and OZ Holdings Ltd., a company organized under
the laws of the British Virgin Islands (“OZ”) (each of
N.B.T., ABE and OZ, a “Founder Shareholder” and
together, the “Founder Shareholders”).
WITNESSETH:
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WHEREAS,
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in connection
with the Company’s issuance of shares of Series A Convertible
Preferred Stock, par value $0.01 per share (“Series A
Preferred Stock”), Series A-l Convertible Preferred Stock,
par value $0.01 per share (“Series A-1 Preferred
Stock”), and Series A-2 Convertible Preferred Stock, par
value $0.01 per share (“Series A-2 Preferred Stock”)
pursuant to that certain Convertible Preferred Stock Purchase
Agreement dated as of July 1, 1999, the purchasers of Series A
Preferred Stock, Series A-l Preferred Stock and Series A-2
Preferred Stock, the Founder Shareholders (other than, ABE) and the
Company entered into that certain Investors Rights Agreement dated
October 15, 1999 (the “Investors Rights
Agreement”);
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WHEREAS,
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in connection
with the Company’s issuance of shares of Series B Convertible
Preferred Stock, par value $0.01 per share (“Series B
Preferred Stock, pursuant to that certain Series B Convertible
Preferred Stock Purchase Agreement dated April 12, 2000, the
purchasers of Series A Preferred Stock, Series A-l Preferred Stock,
Series A-2 Preferred Stock and Series B Preferred Stock, the
Founder Shareholders (other than ABE) and the Company entered into
that certain Amended and Restated Investors Rights Agreement dated
April 12, 2000 (the “Amended and Restated Investors Rights
Agreement”);
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WHEREAS,
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in connection
with the Company’s issuance of shares of Series C Convertible
Preferred Stock, par value $0.01 per share (“Series C
Preferred Stock”), pursuant to that certain Series C
Convertible Preferred Stock Purchase Agreement dated September 28,
2001, the purchasers of Series A Preferred Stock, Series A-l
Preferred Stock, Series A-2 Preferred Stock, Series B Preferred
Stock and Series C Preferred Stock, the Founder Shareholders (other
than ABE) and the Company entered into that certain Second Amended
and Restated Investors Rights Agreement dated September 28,
2001 (the “Second Amended and Restated Investors Rights
Agreement”);
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WHEREAS,
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in connection
with the Company’s issuance of additional shares of Series C
Preferred Stock, pursuant to that certain Amendment No. 1 to the
Series C Convertible Preferred Stock Purchase Agreement dated April
1, 2002 (the “First Amendment to the Series C Stock Purchase
Agreement”), the purchasers of Series A Preferred Stock,
Series A-1 Preferred Stock, Series A-2 Preferred Stock, Series B
Preferred Stock, the Series C Preferred Stock, the Founder
Shareholders (other than ABE) and the Company entered into that
certain Third Amended and Restated Investors Rights Agreement dated
April 1, 2002 (the “Third Amended and Restated Investors
Rights Agreement”);
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WHEREAS,
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in connection
with the Company’s issuance of shares of Series D Convertible
Preferred Stock, par value $0.01 per share (“Series D
Preferred Stock”) pursuant to that certain Series D
Convertible Preferred Stock Purchase Agreement dated May 20, 2003,
the purchasers of Series A Preferred Stock, Series A-1 Preferred
Stock, Series A-2 Preferred Stock, Series B Preferred Stock, Series
C Preferred Stock, Series D Preferred Stock, the Founder
Shareholders (other than ABE) and the Company entered into that
certain Fourth Amended and Restated Investors Rights Agreement
dated May 20, 2003 (the “Fourth Amended and Restated
Investors Rights Agreement”);
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WHEREAS,
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in connection
with the Company’s issuance of shares of Series E-1
Convertible Preferred Stock, par value $0.01 per share
(“Series E-1 Preferred Stock”), pursuant to that
certain Series E-1 Convertible Preferred Stock Purchase Agreement
(the “Stock Purchase Agreement”) dated May 24, 2004
(the Series A Preferred Stock, Series A-1 Preferred Stock, Series
A-2 Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock, Series E-1 Preferred Stock and
Series E-2 Preferred Stock (as defined herein), collectively, the
“Preferred Stock”), the Company and the other parties
to the Fourth Amended and Restated Investors Rights Agreement wish
to amend and restate the Fourth Amended and Restated Investors
Rights Agreement and to include the purchasers of Series E-1
Preferred Stock and ADC (as defined herein) as parties;
and
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WHEREAS,
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the purchasers
of Series E-1 Preferred Stock desire to become parties to this
Agreement.
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BigBand
Networks FIFTH AMENDED AND RESTATED INVESTORS RIGHTS
AGREEMENT
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NOW, THEREFORE, in consideration of
the mutual promises and covenants contained in this Agreement and
other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto amend and restate the
Fourth Amended and Restated Investors Rights Agreement to read in
its entirety as follows:
NOW, THEREFORE, in consideration of
the mutual promises and covenants set forth herein, the parties
hereby agree as follows:
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1.
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Definitions . As used herein, the following terms have the
following meanings:
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1.1.
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“Acquisition Agreement” shall mean
that certain Acquisition Agreement dated as of May 24, 2004 by
and between the Company and ADC Telecommunications, Inc.
(“ADC”) pursuant to which the Company is acquiring all
of the outstanding shares of stock of ADC Broadband Access Systems,
Inc. in consideration for shares of Class B Common Stock and Series
E-2 Convertible Preferred Stock (the “Series E-2 Preferred
Stock”) of the Company.
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1.2.
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“Commission” or “SEC”
shall mean the Securities and Exchange Commission, or any other
federal agency at the time administering the Securities
Act.
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1.3.
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“Common
Stock” shall mean, collectively, shares of the
Company’s Class A Common Stock, $.001 par value
(“Class A Common Stock”) and Class B Common Stock,
$.001 par value (“Class B Common Stock”).
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1.4.
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“Exchange
Act” shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and
regulations thereunder, all as the same shall be in effect at the
time.
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1.5.
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“Holder” means any holder of
outstanding Registrable Securities or shares convertible into
Registrable Securities.
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1.6.
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“Form
S-3” means Form S-3 or Form F-3 under the United States
Securities Act of 1933, as amended (the “Securities
Act”), as in effect on the date hereof or any registration
form under the Securities Act subsequently adopted by the SEC which
permits inclusion or incorporation of substantial information by
reference to other documents filed by the Company with the
SEC.
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1.7.
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“Fraudulent Act” means any action
that is determined to be fraudulent, or involve other willful or
intentional misconduct, or involve a breach of the duty of loyalty
to the Company or its stockholders, or an action or omission not in
good faith or which involves intentional misconduct or a knowing
violation of law under Section 174 of the DGCL or any other
action from which an improper personal benefit is received with
respect to the other parties in connection with this Agreement.
A
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BigBand
Networks FIFTH AMENDED AND RESTATED INVESTORS RIGHTS
AGREEMENT
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1.8.
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“Initiating Holders” means Holders
holding more than fifty percent (50%) of the Registrable
Securities, assuming for purposes of such determination the
conversion of all shares convertible into Registrable
Securities.
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1.9.
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“Initial
Public Offering” or “IPO” means the closing of
the sale of Class A Common Stock of the Company to the public
in a bona fide firm commitment underwriting pursuant to a
registration statement under the Securities Act, where the price
paid by the public for such shares of Common Stock reflects a
valuation of the Company immediately prior to the offering of not
less than $150,000,000 (One Hundred Fifty Million Dollars), and
with net proceeds to the Company of not less than $15,000,000
(Fifteen Million Dollars) (as adjusted for share combinations,
subdivisions or other recapitalization of the Company’s
shares).
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1.10.
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“Register”, “registered”
and “registration” refer to a registration effected by
filing a registration statement in compliance with the Securities
Act and the declaration or ordering by the Commission of
effectiveness of such registration statement, or the equivalent
actions under the laws of another jurisdiction.
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1.11.
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“Registrable
Securities” shall mean all of the following to the extent the
same have not been sold to the public (i) any and all shares
of Common Stock of the Company issued or issuable upon conversion
of shares of the Company’s Preferred Stock, upon exercise of
any warrants or options held by the Investors to purchase Common
Stock or Preferred Stock or issued pursuant to the Series C Stock
Purchase Agreement; or (ii) any and all shares of Common Stock
of the Company issued to ADC pursuant to the Acquisition Agreement
and any and all shares of Common Stock issued or issuable upon
(x) conversion of shares of the Company’s Series E-2
Preferred Stock or (y) warrants to purchase Common Stock
issued to ADC pursuant to the Acquisition Agreement or related
lending arrangements; or (iii) stock issued in respect of
stock referred to in (i) or (ii) above in any
reorganization; or (iv) stock issued in respect of the stock
referred to in (i), (ii) or (iii) as a result of a stock
split, stock dividend, recapitalization or combination; or
(v) for purposes of Sections 7.1 and 7.3 shares of Common
Stock held by the Founder Shareholders, excluding shares included
in clauses (i), (ii), (iii) and (iv) above.
Notwithstanding the foregoing, Registrable Securities shall not
include otherwise Registrable Securities (i) sold by a person
in a transaction in which his rights under this
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BigBand
Networks FIFTH AMENDED AND RESTATED INVESTORS RIGHTS
AGREEMENT
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Agreement are not properly
assigned; or (ii) (A) sold to or through a broker or
dealer or underwriter in a public distribution or a public
securities transaction, or (B) the registration rights
associated with such securities have been terminated pursuant to
this Agreement, provided, however, than any Common Stock that could
be sold pursuant to Rule 144 by the Holder thereof (in accordance
with applicable law) within three (3) months without
registration of such shares, shall not be deemed to be Registrable
Securities; and provided that in no event shall the Company be
required to register any shares of Class B Common Stock.
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1.12.
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“Rule
144” shall mean Rule 144 under the Securities Act or any
successor or similar rule as may be enacted by the Commission from
time to time, but shall not include Rule 144A.
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1.13.
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“Rule
144A” shall mean Rule 144A under the Securities Act or any
successor or similar rule as may be enacted by the Commission from
time to time, but shall not include Rule 144.
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1.14.
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“Securities Act” shall mean the
Securities Act of 1933, as amended, or any similar federal statute
and the rules and regulations thereunder, all as the same shall be
in effect at the time.
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2.
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Affirmative
Covenants . The Company
covenants that, until the Initial Public Offering:):
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2.1.
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Delivery of
Financial Statements .
The Company shall deliver to each Holder or group of Holders who
individually, or as a group, hold at least 4,310,345 shares of the
outstanding Common Stock of the Company (or other shares including
shares of Preferred Stock convertible into at least 4,310,345
shares of the Common Stock of the Company on an as-if converted
basis) the following:
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2.1.1.
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As soon as practicable, but in
any event within ninety (90) days after the end of each fiscal
year of the Company, audited financial statements, including a
consolidated balance sheet of •the Company and its
subsidiaries as of the end of such year, and statements of income
and statements of cash flow of the Company for such year, setting
forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with
U.S. Generally Accepted Accounting Principles (“GAAP”),
audited by a firm of Independent Certified Public Accountants
affiliated with one of the “Big Four” US accounting
firms (a “CPA”), and
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BigBand
Networks FIFTH AMENDED AND RESTATED INVESTORS RIGHTS
AGREEMENT
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accompanied by an opinion of such
firm which opinion shall state that such financial statements have
been prepared in accordance with GAAP applied on a basis consistent
with that of the preceding fiscal year, and present fairly and
accurately the financial position of the Company as of their date,
and that the audit by such accountants in connection with such
financial statements has been made in accordance with generally
accepted auditing standards; and
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2.1.2.
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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 to
the extent requested by a Holder, a consolidated balance sheet of
the Company as at the end of each such period and unaudited
consolidated statements of (i) income and (ii) cash flow
of the Company for such period and for the period from the
beginning of the current fiscal year to the end of such quarterly
period, setting forth in each case in comparative form the figures
for the corresponding period of the previous fiscal year, all in
reasonable detail and certified by the chief financial officer (or
if none, by the chief executive officer) of the Company (the
“CFO”).
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2.2.
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Reporting to
the Board . The Company
shall deliver to each Holder or group of Holders for so long as
such Holder, individually, or as a group, holds at least 7,789,063
of the outstanding Common Stock of the Company (or other shares
including shares of Preferred Stock convertible into at least
7,789,063 of the Common Stock of the Company on an as-if converted
. basis) (herein, a “Major Investor”) the
following:
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2.2.1.
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As soon as
practicable, but in any event within thirty (30) days after
the end of each month, the Company shall submit to the Board of
Directors of the Company (the “Board”) and to each
Major Investor, at such Major Investor’s request, a report,
in a format acceptable to the Board, which will include a
description of any event likely to have a significant impact upon
the Company or its business and other information and data with
respect to the Company’s operations during that month. The
monthly report shall include a comparison of the actual figures to
the budget with respect of such reported period, all in reasonable
detail.
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2.2.2.
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As soon as practicable, but not
less than sixty (60) days prior to the beginning of each
fiscal year, the Company shall submit to
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BigBand
Networks FIFTH AMENDED AND RESTATED INVESTORS RIGHTS
AGREEMENT
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its Board and to each Major
Investor, at such Major Investor’s request, a budget and a
business plan for the coming fiscal year. The management of the
Company shall establish annually an operating plan and budget for
the Company (the “Annual Plan”), in consultation with
the Board. The Annual Plan for the following year shall be
submitted to the Board for its approval at least sixty
(60) days prior to the first day of the fiscal year covered by
such Annual Plan. In addition, the Company’s management shall
submit to the Board monthly and other reports in such format, and
containing such information, as the Board shall require.
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2.2.3.
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If and to the
extent requested by the Board of Directors, the Company shall
prepare and submit to each Major Investor a separate balance sheet
and statement of income for any designated subsidiary of the
Company for the period or periods so specified.
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2.3.
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The Board may
(with the consent of at least two (2) directors designated
solely by the Investors) postpone the delivery of the financial
reports required by Sections 2.1 and 2.2 for a period not to exceed
thirty (30) days.
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2.4.
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Accounting . The Company will maintain a system of
accounting established and administered in accordance with GAAP
consistently applied on a consolidated basis, and will set aside on
its books all such proper reserves as shall be required by
GAAP.
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2.5.
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Confidentiality and Inventions
Agreements . The Company
and its subsidiaries will not employ, or continue to employ, any
person who will have access to material confidential information
with respect to the Company, its subsidiary and their respective
operations unless such person has executed and delivered a
Confidentiality and Inventions Agreement to the satisfaction (as to
substance and form) of the Company’s management and legal
counsel.
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2.6.
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Access to
Information . The Company
will permit representatives of each Major Investor full and free
access, at all reasonable times, and upon reasonable advance
notice, to any of the properties of the Company (including its
books and records) and at their own expense, to discuss its
affairs, finances and accounts with the Company’s officers
and auditor, for any purpose whatsoever. This Section 2.6
shall not be in limitation of any rights which the Major Investors
or directors designated by the Investors may have under applicable
law.
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BigBand
Networks FIFTH AMENDED AND RESTATED INVESTORS RIGHTS
AGREEMENT
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2.7.
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Directors
Indemnity Insurance . If
the Company provides liability insurance for any of its officers or
directors, it will also obtain such insurance for all of the
members of the Board. The Company shall obtain and maintain
liability insurance for all its directors and officers in an amount
and with a carrier satisfactory to the Board, which amount shall
not be less than $3,000,000 (or if such amount is not commercially
available, the maximum available amount).
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2.8.
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VC Fund
Indemnification .
Notwithstanding any contrary provision herein, the Company further
agrees to indemnify, defend and hold harmless each of the Investors
identified as a “VC Fund Investor” in Exhibit B
attached hereto (which shall be deemed to include ADC upon its
execution of a counterpart to this Agreement) and their respective
affiliates (the “Indemnitees”) against losses arising
in whole or in part out of any occurrence related to the fact that
Indemnitees are or were or may be deemed a director, officer,
stockholder, employee, controlling person, agent, or fiduciary of
the Company, except with respect to Fraudulent Acts. Wherein
“Affiliate” for this purpose shall mean, with respect
to any person or entity, any person or entity which, directly or
indirectly, controls, is controlled by or is under common control
with such person or entity, on or after the date first written
above, including, without limitation, any partner, officer,
director, member or employee of such person or entity and any
venture capital fund now or hereafter existing which is controlled
by or under common control with one or more general partners or
shares the same management company with such person or entity. In
furtherance of and not in limitation of the foregoing, the Company
shall advance expenses, including, without limitation,
attorneys’ fees, incurred by any Indemnitee in defending any
civil, criminal, administrative or investigative action, suit or
proceeding in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of
such Indemnitee to repay such advance if it shall be ultimately
determined that such Indemnitee is not entitled to be indemnified
by the Company. The foregoing right of indemnification shall in no
way be exclusive of any other rights of indemnification to which
any Indemnitee may be entitled, under any by-law, agreement, vote
of directors or stockholders or otherwise.
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2.9.
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The Company
shall not amend the by-laws without the consent of at least two
(2) of the directors designated solely by the holders of
Preferred Stock.
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3.
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[intentionally omitted] .
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BigBand
Networks FIFTH AMENDED AND RESTATED INVESTORS RIGHTS
AGREEMENT
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4.
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Restrictions
on Transferability . The
Registrable Securities shall not be sold, assigned, transferred or
pledged, except upon the conditions specified in this Agreement,
which conditions are intended to ensure compliance with the
provisions of the Securities Act or any applicable securities laws.
Each Holder will cause any proposed assignee, transferee, or
pledgee of the Registrable Securities held by a Holder to agree to
take and hold such securities subject to the provisions and upon
the conditions specified in this Agreement.
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5.
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Restrictive
Legend . Each certificate
representing Registrable Securities shall (unless otherwise
permitted by the provisions of this Agreement) be stamped or
otherwise imprinted with a legend substantially in the following
form (in addition to any legend required under applicable state
securities laws or otherwise):
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“THESE SECURITIES HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“ACT”) OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED, EXCEPT IN
COMPLIANCE WITH REGULATION S UNDER THE ACT, IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED, OR UNLESS SOLD PURSUANT TO
RULE 144 PROMULGATED UNDER THE ACT. ANY SUCH TRANSFER MAY ALSO BE
SUBJECT TO APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE ACT.”
Each Holder consents to the Company
making a notation on its records and giving instructions to any
transfer agent of the Registrable Securities in order to implement
the restrictions on transfer established in this
Agreement.
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6.
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Notice of
Proposed Transfer . The
Holder of each certificate representing Registrable Securities, by
acceptance thereof, agrees to comply in all respects with the
provisions of this Section 6. Each such Holder agrees not to
make any disposition of all or any portion of any Registrable
Securities held by it directly or indirectly unless and
until:
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6.1.
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There is in
effect a registration statement under the Securities Act covering
such proposed disposition and such disposition is made in
accordance with such registration statement; or
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BigBand
Networks FIFTH AMENDED AND RESTATED INVESTORS RIGHTS
AGREEMENT
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6.2.
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(i) Such Holder
shall have notified the Company of the proposed disposition and
shall have furnished the Company with a detailed statement of the
circumstances surrounding the proposed disposition; and
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(ii) If reasonably requested by the
Company, such Holder shall furnish the Company with an opinion of
counsel, reasonably satisfactory to the Company that such
disposition shall not require registration of such shares under the
Securities Act. It is agreed, however, that no such opinion will be
required for Rule 144 or Rule 144A transactions, except in unusual
circumstances.
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6.3.
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Notwithstanding
the provisions of paragraphs 6.2(i) and (ii) above, no such
registration statement or opinion of counsel shall be necessary for
a transfer by a Holder to a party to which such holder may make a
transfer or assignment pursuant to Section 11.3 below,
provided, that such transferee agrees in writing to be subject to
all of the terms hereof to the same extent as if he were an
original Holder hereunder.
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7.
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Registration. The following provisions shall govern the
registration of the Company’s securities:
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7.1.
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Incidental
(“Piggyback”) Registration. If the Company at any time proposes to register
any of its securities, other than in a demand registration pursuant
to Section 7.2(a) or Section 7.3 of this Agreement, it
shall give notice to the Holders of such intention. Upon the
written request of any Holder given within twenty (20) days
after receipt of any such notice, the Company shall take all
actions under its power and control to include in such registration
all of the Registrable Securities indicated in such request, so as
to permit the disposition of the shares so registered.
Notwithstanding any other provision of this Section, if the
managing underwriter advises the Company in writing that marketing
factors require a limitation of the number of shares to be
underwritten, then there shall be excluded from such registration
and underwriting to the extent necessary to satisfy such
limitation, first shares held by shareholders other than the
Holders, and then to the extent necessary, shares held by the
Holders (pro rata to the respective number of Registrable
Securities held by such Holders). The Company shall have the right
to terminate or withdraw any registration initiated by it under
this Section 7.1 prior to the effectiveness of such
registration whether or not any Holder has elected to include
securities in such registration. The registration expenses of such
withdrawn registration shall be borne by the Company in accordance
with Section 7.6.
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BigBand
Networks FIFTH AMENDED AND RESTATED INVESTORS RIGHTS
AGREEMENT
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7.2.
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Demand
Registration .
(a) At any time beginning six (6) months following the
closing of an IPO, the Initiating Holders may request in writing
that all or part of the Registrable Securities held by such Holder
shall be registered for trading. Within twenty (20) days after
receipt of any such request, the Company shall give written notice
of such request to the other Holders and shall take all actions
under its power and control to include in such registration all
Registrable Securities held by all such Holders who wish to
participate in such demand registration and who provide the Company
with written requests for inclusion therein within fifteen
(15) days after the receipt of the Company’s notice.
Thereupon, the Company shall effect the registration of all
Registrable Securities as to which it has received requests for
registration with an underwriter acceptable to the holders of a
majority of the participating Registrable Securities. The Company
shall not be required to effect more than two
(2) registrations under this Section 7.2, nor shall the
Company be required to effect a registration for the sale of shares
with an anticipated sales price of less than Five Million Dollars
($5,000,000). Notwithstanding any other provision of this
Section 7.2, if the managing underwriter advises the Company
in writing that marketing factors require a limitation of the
number of shares to be underwritten, then there shall be excluded
from such registration and underwriting to the extent necessary to
satisfy such limitation, first shares held by shareholders other
than the Holders, and then to the extent necessary, shares held by
the Holders (pro rata to the respective number of Registrable
Securities held by such Holders).
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(b) In the event that the Initiating
Holders request to effect a registration under this Section and the
Company decides to join and register any of its securities
thereunder, then, such registration shall not be regarded as a
Demand Registration under Section 7.2.
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7.3.
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Form S-3
Registration . In case
the Company shall receive from any Holder or Holders a written
request or requests that the Company effect a registration on Form
S-3, and any related qualification or compliance, with respect to
Registrable Securities, the reasonably anticipated aggregate price
to the public of which would exceed $1,000,000 (One Million
Dollars), the Company will within twenty (20) days after
receipt of any such request give written notice of the proposed
registration, and any related qualification or compliance, to all
other Holders, and shall take all actions under its power and
control to include in such registration all Registrable Securities
held by all such Holders who wish to participate in such
registration and who provide the Company with written requests for
inclusion therein within fifteen (15) days after the receipt
of the Company’s notice. Thereupon, the Company shall take
all actions under its power and
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BigBand
Networks FIFTH AMENDED AND RESTATED INVESTORS RIGHTS
AGREEMENT
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control to effect such
registration and all such qualifications and compliances as may be
so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Holder’s or
Holders’ Registrable Securities as are specified in such
request, together with all or such portion of the Registrable
Securities of any other Holder or Holders joining in such request
as are specified in a written request given within fifteen
(15) days after receipt of such written notice from the
Company; provided, however, that the Holders of Registrable
Securities may not request more than two (2) registrations
pursuant to this Section 7.3 during any twelve-month period
and any such registration pursuant to this Section 7.3 shall
not be counted as a demand for registration pursuant to section
7.2.
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7.4.
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Notwithstanding
Sections 7.2 and 7.3 above, the Company shall not be required to
effect any registration: (i) within one hundred and twenty
(120) days after the effective date of any other registration
effected; or (iii) during the pending period of any Demand
Blackout Period (as hereinafter defined).
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“Blackout Periods.” If
the Company’s Board of Directors determines in good faith
that the registration and distribution of Registrable Securities
(or the use of a registration statement or related prospectus)
would interfere with any pending financing, acquisition, corporate
reorganization or any other material corporate development
involving the Company (or would require premature disclosure
thereof), and promptly gives the Holders written notice of such
determination following their request to register any Registrable
Securities, the Company shall be entitled to postpone the filing of
the registration statement otherwise required to be prepared and
filed by the Company pursuant to Sections 7.2 or 7.3 for a
reasonable period of time, but not to exceed 90 days (a
“Demand Blackout Period”). The Company shall promptly
notify the Holders of the expiration or earlier termination of any
Demand Blackout Period.
In any event of a Demand Blackout
Period, the Company undertakes to extend the effectiveness of the
then current registration statement beyond the anticipated nine
months period for the respective periods of such Demand Blackout
Period.
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7.5.
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Designation
of Underwriter. (a) In the case of any registration
effected pursuant to Section 7.2 or 7.3 and in the event the
Initiating Holders intend to distribute the Registrable Securities
by means of an underwriting, a majority of the Initiating Holders
that submitted requests for registration shall have the right to
designate the managing underwriter(s) in any underwritten offering
who shall be a prominent and reputable underwriter, subject to the
consent of the Company, which consent shall not be unreasonably
withheld.
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BigBand
Networks FIFTH AMENDED AND RESTATED INVESTORS RIGHTS
AGREEMENT
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(b) In the case of any registration
initiated by the Company, the Company shall have the right to
designate the managing underwriter in any underwritten
offering.
(c) 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 entering into an underwriting agreement in
customary form with the underwriter or underwriters.
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7.6.
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Expenses . All expenses incurred in connection with any
registration under Section 7.1, Section 7.2 or
Section 7.3, including the reasonable fees and expenses of one
counsel for the selling shareholders (including the Holders), shall
be borne by the Company; provided , however, that each of
the Holders participating in such registration shall pay its pro
rata portion of the fees, discounts or commissions payable to any
underwriter,
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7.7.
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Indemnities . In the event of any registered offering of
Common Stock pursuant to this Section 7:
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7.7.1.
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The Company will indemnify and
hold harmless, to the fullest extent permitted by law, any Holder
and any underwriter for such Holder, the partners, officers and
directors of each Holder and each person, if any, who controls the
Holder or such underwriter, from and against any and all losses,
damages, claims, liabilities, joint or several, costs and expenses
(including any amounts paid in any settlement effected with the
Company’s consent) to which the Holder or any such
underwriter or controlling person may become subject under
applicable law or otherwise, insofar as such losses, damages,
claims, liabilities (or actions or proceedings in respect thereof),
costs or expenses arise out of or are based upon (i) any
untrue statement or alleged 11 untrue statement of any material
fact contained in the registration statement or included in the
prospectus, as amended or supplemented, (ii) the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances in which they are made, not misleading,
or (iii) any violation or alleged violation by the Company of
the Securities Act, the Exchange Act or any rule or regulation
promulgated under the
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BigBand
Networks FIFTH AMENDED AND RESTATED INVESTORS RIGHTS
AGREEMENT
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Securities Act, the Exchange Act
or any state securities law in connection with the offering covered
by such registration statement and the Company will reimburse the
Holder, the partners, officers and directors of each Holder, such
underwriter and each such controlling person of the Holder or the
underwriter, promptly upon demand, for any reasonable legal or any
other expenses incurred by them in connection with investigating,
preparing to defend or defending against or appearing as a
third-party witness in connection with such loss, claim, damage,
liability, action or proceeding; provided , however ,
that the Company will not be liable in any such case to the extent
that any such loss
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