{"id":43952,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/stockholders-rights-agreement-netflix-com-inc-reed-hastings.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"stockholders-rights-agreement-netflix-com-inc-reed-hastings","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/securities\/stockholders-rights-agreement-netflix-com-inc-reed-hastings.html","title":{"rendered":"Stockholders&#8217; Rights Agreement &#8211; NetFlix.com Inc., Reed Hastings and Marc Randolph"},"content":{"rendered":"<pre>                               NETFLIX.COM, INC.\n\n              AMENDED AND RESTATED STOCKHOLDERS' RIGHTS AGREEMENT\n\n     THIS AMENDED AND RESTATED STOCKHOLDERS' RIGHTS AGREEMENT (this 'Agreement')\nis made as of this 13\/th\/ day of April, 2000 by and among NetFlix.com, Inc., a\nDelaware corporation (the 'Company'), Reed Hastings and Marc Randolph (such\nindividuals collectively, the 'Founders' and each a 'Founder'), the holders of\nthe Company's Series A Preferred Stock (the 'Series A Preferred'), the holders\nof the Company's Series B Preferred Stock (the 'Series B Preferred'), the\nholders of the Company's Series C Preferred Stock (the 'Series C Preferred'),\nthe holders of the Company's Series D Preferred Stock (the 'Series D Preferred')\nand the purchasers of the Company's Series E Non-Voting Preferred Stock ('Series\nE Preferred') set forth on Exhibit A of that certain Series E Non-Voting\nPreferred Stock and Warrant Purchase Agreement of even date herewith (the\n'Purchase Agreement').  The holders of the Series A Preferred, Series B\nPreferred, Series C Preferred and Series D Preferred shall be referred to\nhereinafter individually as an 'Existing Holder' and collectively as the\n'Existing Holders'.  The purchasers of the Series E Preferred shall be referred\nhereinafter individually as a 'Purchaser' and collectively as the 'Purchasers.'\nAdditional persons may be added as parties to this Agreement as contemplated\nherein and each such addition will be evidenced by such person's execution of a\nsignature page hereto.\n\n                                   RECITALS\n\n     WHEREAS, the Company has granted the Existing Holders registration and\ncertain other rights under the Amended and Restated Stockholders' Rights\nAgreement dated as of June 22, 1999 (the 'Prior Agreement'); and\n\n     WHEREAS, the Company proposes to sell and issue up to five million three\nhundred thirty thousand four hundred ninety (5,330,490) shares of Series E\nPreferred warrants to purchase up to five hundred thirty-three thousand forty-\nnine (533,049) shares of Series E Preferred (the 'Warrants') pursuant to the\nPurchase Agreement; and\n\n     WHEREAS, as a condition of entering into the Purchase Agreement, the\nPurchasers have requested that the Company extend to them registration and\ncertain other rights with respect to the Series E Preferred as set forth below,\nand the Existing Holders are willing to amend the rights given to them pursuant\nto the Prior Agreement by replacing such rights in their entirety with the\nrights set forth in this Agreement.\n\n     NOW, THEREFORE, in consideration of the mutual promises, representations,\nwarranties, covenants and conditions set forth in this Agreement and in the\nPurchase Agreement, the parties mutually agree as follows:\n\n \n     1.  General\n         -------\n\n         (a)  Amendment of Prior Agreement.  Certain of the undersigned parties,\n              ----------------------------                                      \nwho constitute the requisite parties necessary to amend the Prior Agreement,\nhereby agree that effective upon the date hereof, the Prior Agreement is null\nand void and superseded in all respects by the rights and obligations set forth\nin this Agreement, and any application of the rights of participation (including\nany notice requirements) set forth in Section 17 of the Prior Agreement as to\nthe issuance of the Company's Series E Preferred and Warrants and Series E\nPreferred issuable upon exercise of the Warrants under the Purchase Agreement is\nhereby waived.\n\n         (b)  Certain Definitions.  As used in this Agreement, the following \n              -------------------  \nterms shall have the following respective meanings:\n\n              'Commission' shall mean the Securities and Exchange Commission or\nany successor agency.\n\n              'Common Stock' shall mean the Common Stock of the Company.\n\n              'Family Member' shall have the meaning ascribed to it in Section\n15 hereof.\n\n              'Form S-3' means Form S-3 under the Securities Act as in effect on\nthe date hereof or any successor registration form under the Securities Act\nsubsequently adopted by the Commission which permits inclusion or incorporation\nof substantial information by reference to other documents filed by the Company\nwith the Commission.\n\n              'Holder' shall mean any person owning of record Registrable\nSecurities or any transferee of Registrable Securities who, pursuant to Section\n15 below, is entitled to registration rights hereunder.\n\n              'Restricted Securities' shall have the meaning ascribed to it in\nSection 3 hereof.\n\n              'Registrable Securities' shall mean (i) shares of the Common Stock\nissued or issuable upon the conversion of the Shares (including Shares issuable\nor issued upon exercise of the Warrants); and (ii) Common Stock issued as (or\nissuable upon conversion or exercise of any warrant, right or other security\nwhich is issued as)  a dividend or other distribution with respect to, or in\nexchange for or in replacement of, securities described in clause (i) above.\nNotwithstanding the foregoing, Registrable Securities shall not include any\nsecurities sold by a person to the public either pursuant to a registration\nstatement or Rule 144 or sold in a private transaction in which the transferor's\nrights under this Agreement are not assigned.\n\n     The terms 'register,' 'registered' and 'registration' refer to a\nregistration effected by preparing and filing a registration statement in\ncompliance with the Securities Act, and the declaration or ordering of the\neffectiveness of such registration statement.\n\n                                      -2-\n\n \n              'Registration Expenses' shall mean all reasonable out-of-pocket\nexpenses incurred by the Company in complying with Sections 5, 6 and 9 hereof,\nincluding, without limitation, the legal fees of one special counsel to the\nHolders, and all registration, qualification and filing fees, printing expenses,\nescrow fees, fees and disbursements of counsel for the Company, blue sky fees\nand expenses, accounting fees of the Company, and the expense of any special\naudits incident to or required by any such registration.\n\n              'Sale of the Company' shall mean when the Company shall sell,\nconvey or otherwise dispose of all or substantially all of its property or\nbusiness or merge into or consolidate with any other corporation (other than a\nwholly-owned subsidiary corporation) or effect any other transaction or series\nof related transactions in which more than fifty (50%) of the voting power of\nthe Company is disposed of.\n\n              'Securities Act' shall mean the Securities Act of 1933, as\namended.\n\n              'Selling Expenses' shall mean all underwriting discounts, selling\ncommissions and stock transfer taxes applicable to the securities registered by\nthe Holders as well as fees and expenses of any special counsel in addition to\nthe one special counsel included in Registration Expenses, if any, to the\nHolders.\n\n              'Shares' shall mean the Company's Series A Preferred, Series B\nPreferred, Series C Preferred, Series D Preferred, and Series E Preferred.\n\n     2.  Restrictions on Transferability.  The Restricted Securities shall not \n         ------------------------------- \nbe transferable except upon the conditions specified in this Agreement, which\nconditions are intended, among other things, to ensure compliance with the\nprovisions of the Securities Act and other provisions, contained herein.  Each\nHolder of Restricted Securities will cause any proposed transferee of the\nRestricted Securities held by such Holder to agree in writing to take and hold\nsuch Restricted Securities subject to the provisions and upon the conditions\nspecified in this Agreement and to be bound by this Agreement in the same manner\nas the transferring Holder.  Without limiting the foregoing, a condition to any\nvalid transfer of any Restricted Securities shall be the addition of the\ntransferee to this Agreement and the execution by such transferee of a signature\npage hereto.\n\n     3.  Restrictive Legend.  Each certificate representing (i) Shares or (ii)\n         ------------------                                                   \nRegistrable Securities (any such securities listed in the preceding subsections\n(i) or (ii), 'Restricted Securities'), shall (unless otherwise permitted by the\nprovisions of  Section 4 below) be stamped or otherwise imprinted with a legend\nin the following form (in addition to any legend required under applicable state\nsecurities laws or the Purchase Agreement):\n\n     THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR\n     INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,\n     AS AMENDED (THE 'SECURITIES ACT').  THESE SHARES MAY NOT BE SOLD OR\n     TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM\n     UNDER THE SECURITIES ACT.  COPIES OF THE AGREEMENTS COVERING THE PURCHASE\n     OF THESE\n\n                                      -3-\n\n \n     SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN\n     REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY\n     OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.\n\n     4.  Notice of Proposed Transfers.  The Holder of each certificate \n         ---------------------------- \nrepresenting Restricted Securities by acceptance thereof agrees to comply in all\nrespects with the provisions of this Section 4. Prior to any proposed transfer\nof any Restricted Securities, unless there is in effect a registration statement\nunder the Securities Act covering the proposed transfer, the Holder thereof\nshall give written notice to the Company of such Holder's intention to effect\nsuch transfer. Each such notice shall describe the manner and circumstances of\nthe proposed transfer in sufficient detail, and shall, if the Company so\nrequests, be accompanied (except in transactions in compliance with Rule 144) by\nan unqualified written opinion of legal counsel who shall be reasonably\nsatisfactory to the Company, addressed to the Company and reasonably\nsatisfactory in form and substance to the Company's counsel, to the effect that\nthe proposed transfer of the Restricted Securities may be effected without\nregistration under the Securities Act, provided, however, that no opinion need\n                                       --------  -------                      \nbe obtained with respect to a transfer to (A) a partner, active or retired, of a\nHolder of Restricted Securities, (B) the estate of any such partner, (C) an\n'affiliate' of a Holder of Restricted Securities as that term is defined in Rule\n405 promulgated by the Commission under the Securities Act (an 'Affiliate'), or\n(D) the spouse, children, grandchildren or spouse of such children or\ngrandchildren of any Holder or to trusts for the benefit of any Holder or such\npersons, if the transferee agrees to be subject to the terms hereof.  Each\ncertificate evidencing the Restricted Securities transferred as above provided\nshall bear the appropriate restrictive legend set forth in  3 above, except that\nsuch certificate shall not bear such restrictive legend if in the opinion of\ncounsel for the Company such legend is not required in order to establish\ncompliance with any provisions of the Securities Act.\n\n     5.  Requested Registration.\n         ---------------------- \n\n         (a)  Request for Registration.  If at any time beginning the earlier \n              ------------------------ \nof (i) June 12, 2004 or (ii) six (6) months after the effective date of the\nfirst firm commitment underwritten public offering of equity securities of the\nCompany to the general public (an 'IPO'), the Company shall receive from any\nHolder or group of Holders holding more than fifty percent (50%) of the\nRegistrable Securities then outstanding (any such holder, or group of holders,\nthe 'Initiating Holders') a written request that the Company affect any\nregistration, qualification or compliance with respect to Registrable Securities\nhaving a reasonably anticipated aggregate offering price to the public, before\ndeduction of underwriter discounts and commissions, of at least $20,000,000, the\nCompany will:\n\n              (x) within ten (10) days of receipt thereof, give written notice\nof the proposed registration, qualification or compliance to all other Holders\nwho are not Initiating Holders; and\n\n              (y) as soon as practicable and in any event within sixty (60) days\nof the receipt of such request, use its reasonable efforts to affect such\nregistration, qualification or\n\n                                      -4-\n\n \ncompliance (including, without limitation, the execution of an undertaking to\nfile post-effective amendments, appropriate qualification under applicable blue\nsky or other state securities laws and appropriate compliance with applicable\nregulations issued under the Securities Act and any other governmental\nrequirements or regulations) as may be so requested and as would permit or\nfacilitate the sale and distribution of all or such portion of such Registrable\nSecurities as are specified in such request, together with all or such portion\nof the Registrable Securities of any Holder(s) joining in such request as are\nspecified in a written request received by the Company within thirty (30) days\nafter the date of such written notice from the Company;\n\n          Provided, however, that the Company shall not be obligated to take any\naction to affect any such registration, qualification or compliance pursuant to\nthis Section 5:\n\n                    (A)  In any particular jurisdiction in which the Company\nwould be required to execute a general consent to service of process in\naffecting such registration, qualification or compliance unless the Company is\nalready subject to service in such jurisdiction and except as may be required by\nthe Securities Act;\n\n                    (B)  After the Company has affected two (2) such\nregistrations pursuant to this Section 5(a), such registrations have been\ndeclared or ordered effective and the securities offered pursuant to such\nregistrations have been sold; or\n\n                    (C)  During the period starting with the date sixty (60)\ndays prior to the Company's estimated date of filing of, and ending on the date\nthree (3) months immediately following the effective date of, any registration\nstatement pertaining to securities of the Company (other than a registration\nstatement relating to the sale of the Company's securities in connection with a\nRule 145 transaction, an employee benefit plan or the IPO), provided that the\nCompany is actively employing in good faith all reasonable efforts to cause such\nregistration statement to become effective;\n\n     Subject to the foregoing clauses (A) through (C), the Company shall file a\nregistration statement covering the Registrable Securities so requested to be\nregistered as soon as practicable after receipt of the request or requests of\nthe Initiating Holders.  If, however, the Company shall furnish to the\nInitiating Holders a certificate signed by the Chief Executive Officer or\nPresident of the Company stating that, in the good faith judgment of the Board\nof Directors of the Company (the 'Board of Directors'), it would be seriously\ndetrimental to the Company and its stockholders for such registration statement\nto be filed and it is therefore advisable to defer the filing of such\nregistration statement, the Company shall have the right to defer such filing\nfor a period of not more than ninety (90) days after receipt of the request of\nthe Initiating Holders, provided, however, that the Company may not utilize this\nright more than once in any twelve (12) month period.\n\n         (b)  Underwriting.  If the Initiating Holders intend to distribute the\n              ------------                                                     \nRegistrable Securities covered by their request by means of an underwriting,\nthey shall so advise the Company as a part of their request made pursuant to\nSection 5(a) and the Company shall include such information in the written\nnotice referred to in Section 5(a)(x). The right of any Holder to\n\n                                      -5-\n\n \nregistration pursuant to Section 5 shall be conditioned upon such Holder's\nparticipation in such underwriting and the inclusion of such Holder's\nRegistrable Securities in the underwriting to the extent requested and to the\nextent provided herein.\n\n     The Company shall (together with all Holders proposing to distribute their\nsecurities through such underwriting) enter into an underwriting agreement in\ncustomary form with the managing underwriter which managing underwriter shall be\nselected by the Company.  Upon the request of such underwriter, the Company\nagrees to provide all necessary cooperation in connection with such underwriting\nincluding participation in meetings, due diligence sessions, road shows, the\npreparation of prospectuses and similar documents, and the preparation and\ndelivery of customary certificates or documents.  Notwithstanding any other\nprovision of this Section 5, if the managing underwriter advises the Initiating\nHolders in writing that marketing factors require a limitation of the number of\nshares to be underwritten, then, subject to the provisions of Section 5(a), the\nCompany shall so advise all Holders and the number of shares of Registrable\nSecurities that may be included in the registration and underwriting shall be\nallocated among all Holders requesting inclusion in the following priority: (i)\nthe Common Stock (other than shares as to which any person holds contractual\nrights to inclusion) held by all persons other than the Holders shall first be\nexcluded from such registration and underwriting to the extent required; and\n(ii) if a limitation of the number of shares to be included in such registration\nand underwriting is still required, such limitation shall be allocated among the\nHolders (including the Initiating Holders), in proportion, as nearly as\npracticable, to the respective amounts of securities contractually entitled to\ninclusion (determined without regard to any requirement of a request to be\nincluded in such registration) in such registration held by all such Holders at\nthe time of filing the registration statement.  No Registrable Securities\nexcluded from the underwriting by reason of the managing underwriter's marketing\nlimitation shall be included in such registration.\n\n     If any Holder proposing to participate in an underwriting pursuant to this\nSection 5(b) disapproves of the terms of such underwriting, such Holder may\nelect to withdraw therefrom by written notice to the Company, the managing\nunderwriter and the Initiating Holders.  The Registrable Securities and\/or other\nsecurities so withdrawn shall also be withdrawn from registration; provided,\nhowever, that if by the withdrawal of such Registrable Securities a greater\nnumber of Registrable Securities held by other Holders may be included in such\nregistration (up to the maximum of any limitation imposed by the underwriters),\nthen the Company shall offer to all Holders who have included Registrable\nSecurities in the registration the right to include additional Registrable\nSecurities in the same proportion used in determining the underwriter limitation\nin this Section 5(b).  If the registration does not become effective due to the\nwithdrawal of Registrable Securities, then either (1) the Holders requesting\nregistration shall reimburse the Company for expenses incurred in complying with\nthe request or (2) the aborted registration shall be treated as affected for\npurposes of Section 5(a)(B) and Section 9.\n\n     6.  Company Registration.\n         -------------------- \n\n         (a)  Notice of Registration.  If the Company shall determine to \n              ---------------------- \nregister any of its securities, either for its own account or the account of a\nsecurity holder or holders exercising their\n\n                                      -6-\n\n \nrespective demand registration rights, other than (i) a registration relating to\nemployee benefit plans or, (ii) a registration relating solely to a Commission\nRule 145 transaction, the Company will:\n\n              (i)   promptly give to each Holder written notice thereof; and\n\n              (ii)  include in such registration (and any related qualification\nunder blue sky laws or other compliance), and in any underwriting involved\ntherein, all the Registrable Securities specified in a written request or\nrequests, made within thirty (30) days after receipt of such written notice from\nthe Company, by any Holder, except as set forth in Section 6(b) below.\n\n         (b)  Underwriting.  If the registration of which the Company gives \n              ------------ \nnotice is for a registered public offering involving an underwriting, the\nCompany shall so advise the Holders as a part of the written notice given\npursuant to Section 6(a)(i). In such event the right of any Holder to\nregistration pursuant to Section 6 shall be conditioned upon such Holder's\nparticipation in such underwriting and the inclusion of such Holder's\nRegistrable Securities in the underwriting to the extent provided herein. All\nHolders proposing to distribute their securities through such underwriting shall\n(together with the Company and other holders distributing their securities\nthrough such underwriting) enter into an underwriting agreement in customary\nform with the underwriter or underwriters selected for such underwriting by the\nCompany. Notwithstanding any other provision of this Section 6, if the managing\nunderwriter advises the Company in writing that marketing factors require a\nlimitation of the number of shares to be underwritten, then the managing\nunderwriter may limit the number of Registrable Securities to be included in the\nregistration and underwriting by reducing the number of Registrable Securities\nincluded on behalf of the Holders, on a pro-rata basis (or in such other\nproportions as shall mutually be agreed upon by such Holders), based on the\ntotal number of Registrable Securities entitled to registration held by each\nHolder, but in no event shall the amount of securities of the Holders included\nin the offering be reduced below ten percent (10%) of the total amount of\nsecurities included in such offering, unless such offering is the initial public\noffering of the Company, in which case the securities of the Holders can be\nexcluded in their entirety; provided, however, that any such limitation or\n'cutback' shall be first applied to all shares proposed to be sold in such\noffering other than for the account of the Company which are not Registrable\nSecurities. The Company shall advise all Holders of Registrable Securities which\nwould otherwise be registered and underwritten pursuant hereto of any such\nlimitations. If any Holder disapproves of the terms of any such underwriting, he\nmay elect to withdraw therefrom by written notice to the Company and the\nunderwriter. Any Registrable Securities excluded or withdrawn from such\nunderwriting shall not be included in such registration.\n\n     7.  Expenses of Registration.  All Registration Expenses incurred in \n         ------------------------ \nconnection with any registration, qualification or compliance pursuant to\nSections 5, 6 and 9 shall be borne by the Company. All Selling Expenses relating\nto securities registered by the Holders shall be borne by the Holders of such\nsecurities pro rata on the basis of the number of shares so registered.\n\n     8.  Registration Procedures.  In the case of each registration, \n         -----------------------  \nqualification or compliance effected by the Company pursuant to this Agreement,\nthe Company will keep each Holder advised in\n\n                                      -7-\n\n \nwriting as to the initiation of each registration, qualification and compliance\nand as to the completion thereof. At its expense the Company will:\n\n         (a)  Prepare and file with the Commission a registration statement with\nrespect to such securities and use its reasonable efforts to cause such\nregistration statement to become and remain effective for at least one hundred\ntwenty (120) days or until the distribution described in the registration\nstatement has been completed; provided, however, that such one hundred twenty\n(120) day period shall be extended for a period of time equal to the period the\nHolder refrains from selling any securities included in such registration at the\nrequest of an underwriter of Common Stock (or other securities) of the Company;\n\n         (b)  Prepare and file with the Commission such amendments and\nsupplements to such registration statement and the prospectus used in connection\nwith such registration statement as may be necessary to comply with the\nprovisions of the Securities Act with respect to the disposition of all\nsecurities covered by such registration statement;\n\n         (c)  Furnish to the Holders participating in such registration and to\nthe underwriters of the securities being registered such reasonable number of\ncopies of the registration statement, preliminary prospectus, final prospectus\nand such other documents as such underwriters may reasonably request in order to\nfacilitate the public offering of such securities;\n\n         (d)  Use its reasonable efforts to register and qualify the securities\ncovered by such registration statement under such other securities or blue sky\nlaws of such jurisdictions as shall be reasonably requested by the Holders;\nprovided that the Company shall not be required in connection therewith or as a\ncondition thereto to qualify to do business or to file a general consent to\nservice of process in any such states or jurisdictions, unless the Company is\nalready subject to service in such jurisdiction and except as may be required by\nthe Securities Act;\n\n         (e)  In the event of any underwritten public offering, enter into and\nperform its obligations under an underwriting agreement, in usual and customary\nform, with the managing underwriter of such offering; provided that each Holder\nparticipating in such underwriting shall also enter into and perform its\nobligations under such underwriting agreement;\n\n         (f)  Notify each Holder of Registrable Securities covered by such\nregistration statement at any time when a prospectus relating thereto is\nrequired to be delivered under the Securities Act of the happening of any event\nknown to the Company as a result of which the prospectus included in such\nregistration statement, as then in effect, includes an untrue statement of\nmaterial fact or omits to state a material fact required to be stated therein or\nnecessary to make the statements therein not misleading in the light of the\ncircumstances then existing;\n\n         (g)  Cause such Registrable Securities registered pursuant hereunder to\nbe listed on each securities exchange on which similar securities issued by the\nCompany are then listed; and\n\n                                      -8-\n\n \n         (h)  Provide a transfer agent and registrar for all Registrable\nSecurities registered pursuant hereunder and a CUSIP number for all such\nRegistrable Securities, in each case not later than the effective date of such\nregistration.\n\n         (i)  Use its best efforts to furnish, at the request of any Holder\nrequesting registration of Registrable Securities pursuant to this Agreement, on\nthe date that such Registrable Securities are delivered to the underwriters for\nsale in connection with a registration pursuant to this Agreement, if such\nsecurities are being sold through underwriters, or, if such securities are not\nbeing sold through underwriters, on the date that the registration statement\nwith respect to such securities becomes effective, (i) an opinion, dated such\ndate, of the counsel representing the Company for the purposes of such\nregistration, in form and substance as is customarily given to underwriters in\nan underwritten public offering, addressed to the underwriters, if any, and the\nHolders requesting registration of Registrable Securities and (ii) a letter\ndated such date, from the independent certified public accountants of the\nCompany, in form and substance as is customarily given by independent certified\npublic accountants to underwriters in an underwritten public offering, addressed\nto the underwriters, if any, and to the Holders requesting registration of\nRegistrable Securities.\n\n     9.  Registration on Form S-3.  In addition to the rights set forth in \n         ------------------------- \nSection 5, if the Holders request in writing that the Company file a\nregistration statement on Form S-3 (or any successor form thereto) for a public\noffering of shares of Registrable Securities the reasonably anticipated\naggregate price to the public of which is at least two million dollars\n($2,000,000), and the Company is a registrant entitled to use Form S-3 to\nregister securities for such an offering, the Company shall use its reasonable\nefforts to cause such shares to be registered for the offering on such form (or\nany successor thereto). The Company will promptly give written notice of the\nrequest for the proposed registration to all other Holders and include all\nRegistrable Securities of any Holder or Holders joining in such request as are\nspecified in a written request received by the Company within thirty (30) days\nafter the date of such written notice from the Company. The substantive\nprovisions of Section 5(b) shall be applicable to each registration initiated\nunder this Section 9. Notwithstanding Section 5(a)(B), the Holders shall be\nentitled to four (4) registrations on Form S-3, but not more than two (2) in any\ntwelve month period.\n\n     10.  Termination of Registration Rights.  Except as provided elsewhere in \n          ----------------------------------  \nAgreement, the registration rights granted pursuant to this Agreement shall\nterminate (i) as to all Holders on the fifth anniversary of the closing of the\nIPO and (ii) as to any Holder, at such time as such Holder is able to sell all\nof its Registrable Securities under Rule 144 in a three (3) month period or such\nHolder is able to sell all Registrable Securities held by it pursuant to Rule\n144(k) promulgated under the Securities Act.\n\n     11.  Indemnification.\n          --------------- \n\n         (a)  The Company will indemnify each Holder, each of its officers,\ndirectors and partners and such Holder's legal counsel and independent\naccountants, and each person controlling such Holder within the meaning of\nSection 15 of the Securities Act, with respect to which registration,\nqualification or compliance has been affected pursuant to this Agreement, and\neach\n\n                                      -9-\n\n \nunderwriter, if any, and each person who controls any underwriter within the\nmeaning of Section 15 of the Securities Act, against all expenses, claims,\nlosses, damages and liabilities (or actions in respect thereof), including any\nof the foregoing incurred in settlement of any litigation, arising out of or\nbased on any untrue statement (or alleged untrue statement) of a material fact\ncontained in any registration statement, prospectus, offering circular or other\ndocument, or any amendment or supplement thereto, incident to any such\nregistration, qualification or compliance affected pursuant to this Agreement,\nor based on any omission (or alleged omission) to state therein a material fact\nrequired to be stated therein or necessary to make the statements therein, not\nmisleading, or any violation by the Company of any rule or regulation\npromulgated under the Securities Act applicable to the Company and relating to\naction or inaction required of the Company in connection with any such\nregistration, qualification or compliance, and will reimburse each such Holder,\neach of its officers, directors and partners and such Holder's legal counsel and\nindependent accountants, and each person controlling such Holder, each such\nunderwriter and each person who controls any such underwriter, for any legal and\nany other expenses reasonably incurred in connection with investigating,\npreparing or defending any such claim, loss, damage, liability or action,\nprovided that the Company will not be liable in any such case to the extent that\nany such claim, loss, damage, liability or expense arises out of or is based on\nany untrue statement or omission or alleged untrue statement or omission\ncontained in any registration statement, prospectus, offering circular or other\ndocument or any amendment or supplement thereto, incident to any registration,\nqualification or compliance affected pursuant to this Agreement, made in\nreliance upon and in conformity with written information furnished to the\nCompany by an instrument duly executed by such Holder or underwriter and stated\nto be specifically for use therein.\n\n         (b)  Each Holder will, if Registrable Securities held by such Holder\nare included in the securities as to which such registration, qualification or\ncompliance is being affected, indemnify the Company, each of its directors and\nofficers and its legal counsel and independent accountants, each underwriter, if\nany, of the Company's securities covered by such a registration statement, each\nperson who controls the Company or such underwriter within the meaning of\nSection 15 of the Securities Act, and each other such Holder, each of its\nofficers and directors and each person controlling such Holder within the\nmeaning of Section 15 of the Securities Act, against all claims, losses, damages\nand liabilities (or actions in respect thereof) arising out of or based on any\nuntrue statement (or alleged untrue statement) of a material fact contained in\nany such registration statement, prospectus, offering circular or other\ndocument, or any omission (or alleged omission) to state therein a material fact\nrequired to be stated therein or necessary to make the statements therein not\nmisleading, and will reimburse the Company, such Holders, such directors,\nofficers, legal counsel, independent accountants, underwriters or control\npersons for any legal or any other expenses reasonably incurred in connection\nwith investigating or defending any such claim, loss, damage, liability or\naction, in each case to the extent, but only to the extent, that such untrue\nstatement (or alleged untrue statement) or omission (or alleged omission) is\nmade in such registration statement, prospectus, offering circular or other\ndocument in reliance upon and in conformity with written information furnished\nto the Company by an instrument duly executed by such Holder and stated to be\nspecifically for use therein; provided, however, that the obligations of any\nsuch Holder hereunder shall be limited to an amount equal to the gross proceeds\nbefore expenses and commissions to such Holder of Registrable Securities sold as\ncontemplated herein.\n\n                                      -10-\n\n \n         (c)  Each party entitled to indemnification under this Section 11 (the\n'Indemnified Party') shall give notice to the party required to provide\nindemnification (the 'Indemnifying Party') promptly after such Indemnified Party\nhas actual knowledge of any claim as to which indemnity may be sought, and shall\npermit the Indemnifying Party to assume the defense of any such claim or any\nlitigation resulting therefrom, provided that counsel for the Indemnifying\nParty, who shall conduct the defense of such claim or litigation, shall be\napproved by the Indemnified Party (whose approval shall not be unreasonably\nwithheld), and the Indemnified Party may participate in such defense at such\nparty's expense; provided, however, that the Indemnified Party (together with\nall other Indemnified Parties that may be represented without conflict by one\ncounsel) shall have the right to retain one separate counsel, with the fees and\nexpenses to be paid by the Indemnifying Party, if representation of such\nIndemnified Party by the counsel retained by the Indemnifying Party would be\ninappropriate due to actual or potential differing interests between such\nIndemnified Party and any other party represented by such counsel in such\nproceeding; and provided further that the failure of any Indemnified Party to\ngive notice as provided herein shall not relieve the Indemnifying Party of its\nobligations under this Agreement, except to the extent, but only to the extent,\nthat the Indemnifying Party's ability to defend against such claim or litigation\nis impaired as a result of such failure to give notice. No Indemnifying Party,\nin the defense of any such claim or litigation, shall, except with the consent\nof each Indemnified Party, consent to entry of any judgment or enter into any\nsettlement which does not include as an unconditional term thereof the giving by\nthe claimant or plaintiff to such Indemnified Party of a release from all\nliability in respect to such claim or litigation.\n\n         (d)  If the indemnification provided for in paragraphs (a) and (b) of\nthis Section 11 is unavailable or insufficient to hold harmless an Indemnified\nParty thereunder, then each Indemnifying Party thereunder shall contribute to\nthe account paid or payable by such Indemnified Party as a result of the losses,\nclaims, damages, costs, expenses, liabilities or actions referred to in\nparagraphs (a) and (b) of this Section 11 in such proportion as is appropriate\nto reflect the relative fault of the Indemnifying Party on the one hand and the\nIndemnified Party on the other in connection with statements or omissions which\nresulted in such losses, claims, damages or liabilities, as well as any other\nrelevant equitable considerations. The relative fault shall be determined by\nreference to, among other things, whether the untrue or alleged untrue statement\nof a material fact or the omission or alleged omission to state a material fact\nrelates to information supplied by the Indemnifying Party or the Indemnified\nParty and the parties' relative intent, knowledge, access to information and\nopportunity to correct or prevent such untrue statements or omission. The\nparties hereto agree that it would not be just and equitable if contributions\npursuant to this paragraph (d) of Section 11 were to be determined by pro rata\nor per capita allocation or by any other method of allocation which does not\ntake account of the equitable considerations referred to in the first sentence\nof this paragraph (d) of Section 11. The amount paid by an Indemnified Party as\na result of the losses, claims, damages or liabilities referred to in the first\nsentence of this paragraph (d) of Section 11 shall be deemed to include any\nlegal or other expenses reasonably incurred by such Indemnified Party in\nconnection with investigating or defending any action or claim which is the\nsubject of this paragraph (d) of Section 11. Promptly after receipt by an\nIndemnified Party of notice of the commencement of any action against such party\nin respect of which a claim for contribution may be made against an Indemnifying\nParty under this paragraph (d) of Section 11, such Indemnified Party shall\nnotify the \n\n                                      -11-\n\n \nIndemnifying Party in writing of the commencement thereof if the notice\nspecified in paragraph (c) of this Section 11 has not been given with respect to\nsuch action; provided that the omission so to notify the Indemnifying Party \n             --------                        \nshall not relieve the Indemnifying Party from any liability which it may have to\nany Indemnified Party otherwise under this paragraph (d) of Section 11, except\nto the extent that the Indemnifying Party is actually prejudiced by such failure\nto give notice. The parties hereto agree with each other and shall agree with\nthe underwriters of the Common Stock of the Company pursuant to the terms\nhereof, if requested by such underwriters, that (a) the underwriters' portion of\nsuch contribution shall not exceed the underwriting discount, commission and\nother compensation and (b) except for the Company, the amount of such\ncontribution shall not exceed an amount equal to the proceeds received by such\nIndemnifying Party from the sale of securities in the offering to which the\nlosses, claims, damages or liabilities of the indemnified parties relate. No\nperson guilty of fraudulent misrepresentation (within the meaning of Section\n11(f) of the Securities Act) shall be entitled to contribution from any person\nwho was not guilty of such fraudulent misrepresentation.\n\n         12.  Lock-up Agreement.  In consideration for the Company agreeing to \n              ----------------- \nits obligations under this Agreement each Holder of Registrable Securities and\neach transferee pursuant to Section 15 hereof agrees, in connection with the\nfirst registration of the Company's securities, upon request of the underwriters\nmanaging such underwritten offering of the Company's securities, not to sell,\nmake any short sale of, loan, grant any option for the purchase of, or otherwise\ndispose of any Registrable Securities or other securities of the Company (other\nthan those included in the registration and securities acquired in open market\ntransactions on or after the effective date of such registration) without the\nprior written consent of the Company or such underwriters, as the case may be,\nfor such period of time from the effective date of such registration as the\nCompany or the underwriters may specify, which period shall not exceed one\nhundred eighty (180) days following the effective date of the IPO; provided,\nhowever that (i) all directors, officers and 1% stockholders of the Company\nagree to the same lockup and (ii) such agreement shall provide that any\ndiscretionary waiver or termination of the restrictions of such agreements by\nthe Company or representatives of the underwriters shall apply to all persons\nsubject to such agreements pro rata based on the number of shares subject to\nsuch agreements. Each Holder agrees that the Company may instruct its transfer\nagent to place stop transfer notations in its records to enforce the provisions\nof this Section 12.\n\n     13.  Information by Holder.  The Holder or Holders of Registrable \n          ----------------------  \nSecurities included in any registration shall furnish to the Company such\ninformation regarding such Holder or Holders and the distribution proposed by\nsuch Holder or Holders as the Company may request in writing and as shall be\nrequired in connection with any registration, qualification or compliance\nreferred to in this Agreement.\n\n     14.  Rule 144 Reporting.  With a view to making available the benefits of\n          ------------------                                                  \ncertain rules and regulations of the Commission which may at any time permit the\nsale of the Restricted Securities to the public without registration, after such\ntime as a public market exists for the Common Stock of the Company, the Company\nagrees to:\n\n                                      -12-\n\n \n          (a)  Use its reasonable efforts to make and keep public information\navailable, as those terms are understood and defined in Rule 144 under the\nSecurities Act, at all times after the effective date of the IPO;\n\n          (b)  Use its reasonable efforts to then file with the Commission in a\ntimely manner all reports and other documents required of the Company under the\nSecurities Act and the Securities Exchange Act of 1934, as amended (at any time\nafter it has become subject to such reporting requirements); and\n\n          (c)  Furnish to Holders of Registrable Securities forthwith upon\nrequest, a written statement by the Company as to its compliance with the\nreporting requirements of Rule 144 (at any time after ninety (90) days after the\neffective date of the IPO, and of the Securities Act and the Securities Exchange\nAct of 1934, as amended, (at any time after it has become subject to such\nreporting requirements), a copy of the most recent annual or quarterly report of\nthe Company, and such other reports and documents of the Company as a Holder of\nRegistrable Securities may reasonably request in availing itself of any rule or\nregulation of the Commission allowing such Holder to sell any such securities\nwithout registration.\n\n     15.  Transfer of Registration Rights.  The right to cause the Company to\n          -------------------------------                                    \nregister securities granted hereunder may be assigned to a transferee or\nassignee who is an affiliate (as that term is defined in Rule 405 promulgated by\nthe Commission under the Securities Act), or who acquires at least two hundred\nthousand (200,000) shares of Series A Preferred, Series B Preferred, Series C\nPreferred, Series D Preferred, Series E Preferred or the Common Stock issued\nupon conversion thereof (adjusted for stock splits, reverse stock splits or\nsimilar events after the date hereof), provided that the Company is given\nwritten notice of such assignment prior to such assignment.  In addition, rights\nto cause the Company to register securities may be freely assigned (a) to any\nconstituent partner or retired partner of a Holder, where such Holder is a\npartnership, (b) to any officer, director or principal shareholder thereof,\nwhere such Holder is a corporation or (c) to the spouse, children, grandchildren\nor spouse of such children or grandchildren of any Holder or to trusts for the\nbenefit of any Holder or such persons where the Holder is a natural person (each\nperson or entity in this subsection (c), a 'Family Member').\n\n     16.  Information Rights.  The Company hereby covenants and agrees as \n          ------------------  \nfollows:\n\n          (a)  Annual Financial Information.  The Company will furnish to each \n               ----------------------------  \nHolder who holds at least ten percent (10%) of the number of originally issued\nshares of Series A Preferred, Series B Preferred, Series C Preferred, Series D\nPreferred or Series E Preferred (adjusted for stock splits, reverse stock splits\nor similar events after the date hereof), as the case may be, as soon as\npracticable after the end of each fiscal year, and in any event within ninety\n(90) days thereafter, an income statement for such fiscal year, a balance sheet\nof the Company and statement of stockholder's equity as of the end of such year,\nand a statement of cash flows for such year, such year-end financial reports to\nbe in reasonable detail, prepared in accordance with generally accepted\naccounting principles ('GAAP'), and audited and certified by an independent\npublic accounting firm\n\n                                      -13-\n\n \nof nationally recognized standing selected by the Company, and the Company's\nannual financial plan for the upcoming fiscal year to be in reasonable detail\nand broken down on a monthly basis.\n\n          (b)  Monthly Financial Information.  Upon written request, the \n               ----------------------------- \nCompany will deliver to each Holder who holds at least ten percent (10%) of the\nnumber of originally issued shares of Series A Preferred, Series B Preferred,\nSeries C Preferred, Series D Preferred or Series E Preferred (adjusted for stock\nsplits, reverse stock splits or similar events after the date hereof), as the\ncase may be, as soon as practicable after the end of each month, and in any\nevent within thirty (30) days thereafter, an unaudited income statement and\nschedule as to the sources and applications of funds and balance sheet and\ncomparison to prior year results and budget for and as of the end of such month.\n\n          (c)  Assignment of Rights to Financial Information.  The rights to \n               ---------------------------------------------\nreceive information pursuant to this Section 16 may be assigned or otherwise\nconveyed to any transferee of Shares.\n\n          (d)  Termination of Information Rights.  The information rights set \n               --------------------------------- \nforth in this Section 16 shall expire upon the earlier of (i) the IPO or (ii)\nthe date of a Sale of the Company.\n\n     17.  Right to Maintain.\n          ----------------- \n\n          (a)  In the event the Company desires to sell and issue any shares of,\nor securities convertible into or exchangeable or exercisable for any shares of,\nany class of its capital stock ('New Securities'), then the Company shall first\nnotify each Holder of the material terms of the proposed sale and shall permit\neach such Holder to acquire, at the time of consummation of such proposed\nissuance and sale and on such terms as are specified in the Company's notice\npursuant hereto, a certain number of the New Securities (such right, the 'Right\nto Maintain'). Each Holder shall have thirty (30) days after the date of such\nnotice to elect by notice to the Company to purchase up to the number of such\nNew Securities available to them pursuant to Section 17(b) below.\n\n          (b)  The number of New Securities that each Holder may acquire\nhereunder shall be determined by calculating such number as would result in such\nHolder maintaining its voting rights in the Company following such proposed\nissuance of New Securities, on an as-converted, outstanding percentage basis, at\nthe level held by it immediately prior to such issuance of New Securities after\ngiving effect to the anti-dilution protections, if any, set forth in the\nCompany's Certificate of Incorporation. In addition, each Holder shall have a\nright of over-allotment such that if any Holder fails to exercise its rights\nhereunder to purchase the maximum number of New Securities which it is entitled\nto purchase pursuant to the preceding sentence, the other Holders may purchase\non a proportional basis (determined with respect to the number of shares which\nthe Holders are entitled to purchase pursuant to the preceding sentence) such\nshortfall number of New Securities by notice to the Company within the thirty\nday period after the date of the Company notice pursuant to Section 17(a) above.\n\n          (c)  Notwithstanding anything in this Section 17, New Securities shall\nnot be deemed to include (and no Right to Maintain shall apply to the issuance\nof) any securities issued or\n\n                                      -14-\n\n \nissuable (i) to employees, consultants or directors of the Company pursuant to\nany employee benefit plan; (ii) to banks, building developers or equipment\nlessors in connection with commercial credit arrangements, equipment financings\nor similar transactions provided such issuances are for other than primarily\nequity financing purposes and are approved by the Board of Directors; (iii) in\nconnection with any stock split, dividend or distribution in respect of the\nCompany's capital stock; (iv) in the IPO; (v) upon conversion of the Shares; or\n(vi) in connection with a Sale of the Company, a business combination, a\nstrategic partnership, a joint venture or a similar transaction, approved by the\nBoard of Directors.\n\n          (d)  The Right to Maintain for all parties shall terminate and be of\nno further force or effect upon the earlier of and with respect to (i) the date\nof the IPO or (ii) the date of a Sale of the Company.\n\n     18.  Co-Sale Rights. The sale or transfer of any Shares or Common Stock by\n          --------------                                                       \neither Founder to a purchaser other than any Family Member, shall be subject to\nthe Co-Sale Rights set forth in this Section 18 with respect to such sale or\ntransfer.  The Co-Sale Rights shall not apply to the sale or transfer of Shares\nor Common Stock by either of the Founders up to an aggregate of ten percent\n(10%) of the aggregate holdings of such Founder immediately following the\nclosing of the transactions contemplated by the Purchase Agreement.\n\n          (a)  Rights Granted.  In the event that any Founder proposes to sell\n               -------------- \nor otherwise transfer (a 'Selling Founder') any Shares or Common Stock ('Founder\nShares') to a purchaser other than any Family Member (a 'Proposed Founder\nSale'), the Selling Founder shall deliver to each Holder a written notice (a\n'Founder Co-Sale Notice') stating: (i) his bona fide intention to sell such\nFounder Shares; (ii) the name of each proposed buyer of such Founder Shares\n(each a 'Proposed Founder Buyer'); (iii) the number of Founder Shares to be\ntransferred to each Proposed Founder Buyer; and (iv) the bona fide cash price or\nother consideration for which he proposes to transfer the Founder Shares. Each\nHolder shall have the right, exercisable upon written notice to the Selling\nFounder within twenty (20) days after receipt of a Founder Co-Sale Notice, to\nparticipate in the Proposed Founder Sale pursuant to the specified terms and\nconditions of such Proposed Founder Sale in the manner described below.\n\n          (b)  Participation.  Each Holder may sell all or any part of that \n               ------------- \nnumber of Shares (including Common Stock issuable upon conversion thereof),\nequal to the product obtained by multiplying (i) the number of Founder Shares\nspecified in the Founder Co-Sale Notice by (ii) a fraction, the numerator of\nwhich is the number of shares of Registrable Securities held by such Holder\nimmediately prior to the Proposed Founder Sale, and the denominator of which is\nthe total number of shares of Common Stock (including shares of Common Stock\nissuable upon conversion of shares of Preferred Stock and upon exercise of any\noption to purchase Common Stock) owned by the Selling Founder, and all of the\nExisting Holders and Purchasers in the aggregate on the date of the Founder Co-\nSale Notice.\n\n          (c)  Delivery.  Each Holder shall effect its participation in the \n               --------  \nProposed Founder Sale, if any, by delivering to the Selling Founder for transfer\nto the Proposed Founder Buyer(s) one\n\n                                      -15-\n\n \nor more certificates, properly endorsed for transfer, which represent the number\nof Shares (including shares of Common Stock issuable upon conversion thereof)\nthat such Holder elects to sell pursuant to this Section 18.\n\n          (d)  Price; Payment.  The consideration for the Shares transferred \n               -------------- \nto the Selling Founder pursuant to this Section 18 shall be equal to the per\nshare price specified in the Founder Co-Sale Notice or such higher price as the\nSelling Founder may be paid for such shares. The Selling Founder shall, no later\nthan five (5) days after the closing of the Proposed Founder Sale, remit to each\nparticipating Holder the consideration described in the preceding sentence for\nthe Shares transferred pursuant to this Section 18.\n\n          (e)  Termination.  The Co-Sale Rights set forth in this Section 18 \n               ----------- \nshall terminate and be of no further force or effect immediately upon the\nclosing of an IPO which results in aggregate gross proceeds to the Company equal\nto or in excess of $20,000,000, prior to deduction of underwriting commissions\nand offering expenses.\n\n          (f)  If, from time to time during the term of this Agreement, there is\nany consolidation or merger immediately following which stockholders of the\nCompany hold more than 50% of the voting equity securities of the surviving\ncorporation, then, in such event, any and all new, substituted or additional\nsecurities to which any Founder is entitled by reason of his or her ownership of\nthe Founder Shares shall be immediately subject to the provisions of this\nAgreement and be included in the term 'Founder Shares' for all purposes of this\nAgreement with the same force and effect as the Founder Shares presently subject\nto this Agreement and with respect to which such securities were distributed.\n\n          (g)  In the event a Founder sells any Founder Shares in contravention\nof the Co-Sale Rights of a Holder under this Agreement (a 'Prohibited\nTransfer'), such Holder, in addition to such other remedies as may be available\nat law, in equity or hereunder, shall have the put option provided in Section\n18(h) below, and such Founder shall be bound by the applicable provisions of\nsuch put option.\n\n          (h)  In the event of a Prohibited Transfer, such Holder shall have the\nright to sell to the Founder who effected the Prohibited Transfer, and, if such\nright is exercised, the Founder shall have the obligation to purchase from such\nHolder, a number of Shares (including Common Stock issuable upon conversion\nthereof) equal to the number of Shares (including Common Stock issuable upon\nconversion thereof) such Holder would have been entitled to transfer to the\npurchaser in the Prohibited Transfer pursuant to the terms hereof. Such sale\nshall be made on the following terms and conditions:\n\n               (i)    The price per share at which the Shares (including Common\nStock issuable upon conversion thereof) are to be sold to the Founder shall be\nequal to the price per share paid by the purchaser to the Founder in the\nProhibited Transfer.\n\n               (ii)   Within twenty (20) days after the later of the dates on\nwhich the Holder (i) received notice from the Founder of the Prohibited Transfer\nor (ii) otherwise became\n\n                                      -16-\n\n \naware of the Prohibited Transfer, the Holder shall, if exercising the put option\ncreated hereby, deliver to Founder the certificate(s), properly endorsed for\ntransfer, which represent the Shares (including shares of Common Stock issuable\nupon conversion thereof) to be sold.\n\n               (iii)  The Founder shall, within ten (10) days of its receipt of\nthe certificate(s) for the Shares to be sold by a Holder pursuant to this\nSection 18(h), pay the aggregate purchase price therefor by certified check or\nbank draft or by wire transfer made payable to the order of such Holder.\n\n               (iv)   NOTWITHSTANDING THE FOREGOING, ANY ATTEMPT TO TRANSFER\nSHARES OF THE COMPANY IN VIOLATION OF SECTION 18 HEREOF SHALL BE DEEMED NULL AND\nVOID AND THE COMPANY AGREES IT WILL NOT EFFECT SUCH A TRANSFER NOR WILL IT TREAT\nANY ALLEGED TRANSFEREE AS THE HOLDER OF SUCH SHARES WITHOUT THE WRITTEN CONSENT\nOF A MAJORITY IN INTEREST OF THE HOLDERS. THE COMPANY AND THE FOUNDERS AGREE\nTHAT ANY AND ALL CERTIFICATES REPRESENTING ANY FOUNDER SHARES HELD FROM TIME TO\nTIME DURING THE TERM OF THIS AGREEMENT SHALL BEAR A LEGEND REFERRING TO THE\nRESTRICTIONS IMPOSED BY THIS AGREEMENT.\n\n               (v)    Each Founder agrees that the Company may instruct its\ntransfer agent to impose transfer restrictions on the Founder Shares represented\nby certificates bearing the legend referred to in Section 18(h)(iv) to enforce\nthe provisions of this Agreement. The legend shall be removed upon termination\nof the Co-Sale Rights herein.\n\n     19.  Governing Law.  This Agreement and the legal relations between the \n          -------------  \nparties arising hereunder shall be governed by and interpreted in accordance\nwith the laws of the State of California. The parties hereto agree to submit to\nthe exclusive jurisdiction and venue of the United States District Court for the\nNorthern District of California with respect to the breach or interpretation of\nthis Agreement or the enforcement of any and all rights, duties, liabilities,\nobligations, powers, and other relations between the parties arising under this\nAgreement.\n\n     20.  Entire Agreement.  This Agreement constitutes the full and entire\n          ----------------                                                 \nunderstanding and agreement between the parties regarding rights to\nregistration.  Except as otherwise expressly provided herein, the provisions\nhereof shall inure to the benefit of, and be binding upon, the successors,\nassigns, heirs, executors and administrators of the parties hereto.\n\n     21.  Notices, etc. All notices and other communications required or \n          ------------- \npermitted hereunder shall be in writing and shall be deemed effectively given\nupon delivery to the party to be notified in person or by courier service, by\nfacsimile upon proper confirmation of receipt, or five (5) days after deposit\nwith the United States mail, by registered or certified mail, postage prepaid,\naddressed (a) if to a Holder, to such holder's address or addresses set forth\nbelow or at such other address as such holder shall have furnished to the\nCompany in writing, (b) if to any other holder of any Registrable Securities, to\nsuch address as such holder shall have furnished the Company in writing, or,\nuntil any such holder so furnishes an address to the Company, then to the\naddress of the last holder of such\n\n                                      -17-\n\n \nsecurities who has so furnished an address to the Company, or (c) if to the\nCompany, to its address set forth below, to the attention of the Corporate\nSecretary, or at such other address as the Company shall have furnished to the\nHolders.\n\n     22.  Counterparts.  This Agreement may be executed in any number of\n          ------------                                                  \ncounterparts, each of which may be executed by less than all of the parties\nhereto, each of which shall be enforceable against the parties actually\nexecuting such counterparts, and all of which together shall constitute one and\nthe same instrument.\n\n     23.  Amendment.  Any provision of this Agreement may be amended, waived or\n          ---------                                                            \nmodified only upon the written consent of each of the following (i) the Company;\nand (ii) the holders of 50% or more of the Registrable Securities.  Any\namendment or waiver effected in accordance with this Section 23 shall be binding\nupon each Holder, the Founders and the Company; provided, however, that with\nrespect to the amendment of any provision hereunder that solely affects the\nrights of a specific class of stockholders, only the consent of the Company and\nthe holders of not less than a majority of the then outstanding shares of such\nclass or group, as the case may be, shall be required to amend such provision.\nAny Holder may waive any of his or her rights or the Company's obligations\nhereunder without obtaining the consent of any other person.\n\n     24.  Successors and Assigns.  Except as otherwise provided herein, the\n          ----------------------                                           \nprovisions hereof shall inure to the benefit of, and be binding upon, the\nsuccessors, assigns, heirs, executors and administrators of the parties hereto.\n\n     25.  Severability.  In the event that any provision of this Agreement \n          ------------ \nbecomes or is declared by a court of competent jurisdiction to be illegal,\nunenforceable or void, this Agreement shall continue in full force and effect\nwithout said provision; provided that no such severability shall be effective if\nit materially changes the economic benefit of this Agreement to any party.\n\n     26.  Aggregation of Stock.  All shares of Registrable Securities held or\n          --------------------                                               \nacquired by affiliated entities or affiliated persons shall be aggregated\ntogether for the purpose of determining the availability of any rights under\nthis Agreement.\n\n                                      -18-\n\n \n     IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated\nStockholders' Rights Agreement as of the date set forth above.\n\n'COMPANY'                           'FOUNDERS'\n\nNETFLIX.COM, INC.\na Delaware Corporation\n\nBy:___________________________      By:____________________________\n\nName:_________________________      Name:__________________________\n\nTitle:________________________      Title:_________________________\n\nSERIES A PREFERRED HOLDERS\n\nSTEPHEN J. KAHN and KAREN B. HENKEN,              Muriel Randolph\ntees KAHN\/HENKEN T\/A dtd 8\/29\/95\nBy:___________________________             _________________________  \n\nName:_________________________    \n\nTitle:________________________    \n\nSteven J. Rosston and Louisa R.H. La Farge,      Richard Schell\nCommunity Property\n\nBy:___________________________             _________________________  \n\nName:_________________________    \n\nTitle:________________________    \n\nWS Investment Company 97B\n\nBy:___________________________             \n\nName:_________________________    \n\nTitle:________________________    \n\n \nSERIES B PREFERRED HOLDERS\n\nInstitutional Venture Partners VIII, L.P., by its General Partner\nInstitutional Venture Management VIII, LLC\n \n_____________________________________\nName:________________________________\n\nIVM Investment Fund VIII, LLC, by its Manager\nInstitutional Venture Management VIII, LLC\n \n_____________________________________\nName:________________________________\n\nIVM Investment Fund VIII-A, LLC, by its Manager\nInstitutional Venture Management VIII, LLC\n \n_____________________________________\nName:________________________________\n\nIVP Founders Fund I, L.P., by its General Partner\nInstitutional Venture Management VI, L.P.\n \n_____________________________________\nName:________________________________\n\n\nWS Investment Company 98A\n\nBy: _________________________________\n\nName: _______________________________\n\nTitle: ______________________________\n\n\nJohn Mark Box, Trustee of the MARKBOX       Muriel Randolph\nLIVING TRUST U\/A dated December 5, 1995,\nas amended                                  ___________________________________\n\nBy:__________________________________\n                                            Joan and Wil Hastings\nName:________________________________       \n                                            ___________________________________\nTitle:_______________________________\n\n \nSTEPHEN J. KAHN and KAREN B. HENKEN         Christopher McLeod and Jessica Abbe\ntees KAHN\/HENKEN T\/A dtd 8\/29\/95\n                                            ___________________________________\nBy:__________________________________\n\nName:________________________________       \n                                            \nTitle:_______________________________\n\nSteven J. Rosston and Louisa R.H. La Farge, \nCommunity Property\n                                            \nBy:__________________________________\n\nName:________________________________       \n                                            \nTitle:_______________________________\n\n                                            Peter C. Gotcher\n\n                                            ___________________________________ \n\n\n \nSERIES C PREFERRED HOLDERS\n\nFoundation Capital II, L.P.\n\nBy:  Foundation Capital Management II, LLC\nIts: Manager\n\nBy:  ______________________________________\n     Name:\n     Title:\n\nFoundation Capital II Entrepreneurs Fund, LLC\n\nBy:  Foundation Capital Management II, LLC\nIts: Manager\n\nBy:  ______________________________________\n     Name:\n     Title:\n\nFoundation Capital II Principals Fund, LLC\n\nBy:  Foundation Capital Management II, LLC\nIts: Manager\n\nBy:  ______________________________________\n     Name:\n     Title:\n\nTCV II, V.O.F.\na Netherlands Antilles General Partnership\n\nBy:  Technology Crossover Management II, L.L.C.\nIts: Investment General Partner\n\nBy: _______________________________________\n     Name:  Carla S. Newell\n     Title:  Attorney-In-Fact\n\n \nTechnology Crossover Ventures II, L.P.\na Delaware Limited Partnership\n\nBy:  Technology Crossover Management II, L.L.C.\nIts: General Partner\n\nBy: \/s\/ Carla S. Newell\n    ----------------------------------\n     Name:  Carla S. Newell\n     Title:  Attorney-In-Fact\n\nTCV II (Q), L.P.\na Delaware Limited Partnership\n\nBy:  Technology Crossover Management II, L.L.C.\nIts: General Partner\n\nBy: \/s\/ Carla S. Newell\n    -----------------------------------\n    Name:  Carla S. Newell\n    Title:  Attorney-In-Fact\n\nTCV II Strategic Partners, L.P.\na Delaware Limited Partnership\n\nBy:  Technology Crossover Management II, L.L.C.\nIts: General Partner\n\nBy: \/s\/ Carla S. Newell\n    -----------------------------------\n    Name:  Carla S. Newell\n    Title:  Attorney-In-Fact\n\nTechnology Crossover Ventures II, C.V.\na Netherlands Antilles Limited Partnership\n\nBy:  Technology Crossover Management II, L.L.C.\nIts: Investment General Partner\n\nBy: ___________________________________\n     Name:  Carla S. Newell\n     Title:  Attorney-In-Fact\n\n \nInstitutional Venture Partners VIII, L.P.\n\nBy:  Institutional Venture Management VIII, LLC\nIts: General Partner\n\nBy:  __________________________________\n     Name:\n     Title:  Managing Director\n\nIVM Investment Fund VIII, LLC\n\nBy:  Institutional Venture Management VIII, LLC\nIts: General Partner\n\nBy:  __________________________________\n     Name:\n     Title:  Managing Director\n\nReed Hastings\n\n_______________________________________ \n\nMuriel Randolph\n\n \n_______________________________________ \n\nJoan Hastings\n\n \n_______________________________________ \n\nWil Hastings\n\n \n_______________________________________ \n\nRobert D. Sanchez\n\n_______________________________________ \n\n \nSTEPHEN J. KAHN and KAREN B.\nHENKEN, tees KAHN\/HENKEN T\/A\ndtd 8\/29\/95\n  \n_______________________________________ \nBy\n \n_______________________________________ \nName\n \n_______________________________________ \nTitle\n\nHastings 1996 Irrevocable Trust\n\n \n_______________________________________ \nBy\n \n_______________________________________ \nName\n \n_______________________________________ \nTitle\n\nWS Investment Company 99A\n\n_______________________________________ \nBy:\n\n_______________________________________ \nName:\n\n_______________________________________ \nTitle:\n\nComdisco, Inc.\n\n_______________________________________ \nBy:\n\n_______________________________________ \nName:\n\n_______________________________________ \nTitle:\n\n \nSERIES D PREFERRED HOLDERS\n\nTCV II, V.O.F.\na Netherlands Antilles General Partnership\n\nBy:  Technology Crossover Management II, L.L.C.\nIts: Investment General Partner\n\nBy: __________________________________ \n     Name:  Carla S. Newell\n     Title:  Attorney-In-Fact\n\nTechnology Crossover Ventures II, L.P.\na Delaware Limited Partnership\n\nBy:  Technology Crossover Management II, L.L.C.\nIts: General Partner\n\nBy:  __________________________________ \n     Name:  Carla S. Newell\n     Title:  Attorney-In-Fact\n\nTCV II (Q), L.P.\na Delaware Limited Partnership\n\nBy:  Technology Crossover Management II, L.L.C.\nIts: General Partner\n\nBy:  __________________________________ \n     Name:  Carla S. Newell\n     Title:  Attorney-In-Fact\n\nTCV II Strategic Partners, L.P.\na Delaware Limited Partnership\n\nBy:  Technology Crossover Management II, L.L.C.\nIts: Investment General Partner\n\nBy:  __________________________________ \n     Name:  Carla S. Newell\n     Title:  Attorney-In-Fact\n\n \nTechnology Crossover Ventures II, C.V.             Anantha Srirama\na Netherlands Antilles Limited Partnership\n\nBy:  Technology Crossover Management II, L.L.C.    __________________________\nIts: Investment General Partner\n\nBy:  __________________________________ \n     Name:  Carla S. Newell\n     Title:  Attorney-In-Fact\n\nFoundation Capital II, L.P.\n\nBy:  Foundation Capital Management II, LLC\nIts: Manager\n\nBy:  __________________________________ \n     Name:\n     Title:\n\nFoundation Capital II Entrepreneurs Fund, LLC\n\nBy:  Foundation Capital Management II, LLC\nIts: Manager\n\nBy:  __________________________________ \n     Name:\n     Title:\n\nFoundation Capital II Principals Fund, LLC\n\nBy:  Foundation Capital Management II, LLC\nIts: Manager\n\nBy:  __________________________________ \n     Name:\n     Title:\n\nEurope@web B.V.\n\nBy:  __________________________________ \n     Name:\n     Title:\n\n \nSERIES E PREFERRED HOLDERS\n\nTCV II, V.O.F.\na Netherlands Antilles General Partnership\n\nBy:  Technology Crossover Management II, L.L.C.\nIts: Investment General Partner\n\nBy:  __________________________________ \n     Name:  Carla S. Newell\n     Title:  Attorney-In-Fact\n\nTechnology Crossover Ventures II, L.P.\na Delaware Limited Partnership\n\nBy:  Technology Crossover Management II, L.L.C.\nIts: General Partner\n\nBy:  __________________________________ \n     Name:  Carla S. Newell\n     Title:  Attorney-In-Fact\n\nTCV II (Q), L.P.\na Delaware Limited Partnership\n\nBy:  Technology Crossover Management II, L.L.C.\nIts: General Partner\n\nBy:  __________________________________ \n     Name:  Carla S. Newell\n     Title:  Attorney-In-Fact\n\nTCV II Strategic Partners, L.P.\na Delaware Limited Partnership\n\nBy:  Technology Crossover Management II, L.L.C.\nIts: Investment General Partner\n\nBy:  __________________________________ \n     Name:  Carla S. Newell\n     Title:  Attorney-In-Fact\n\n \nTechnology Crossover Ventures II, C.V.\na Netherlands Antilles Limited Partnership\n\nBy:  Technology Crossover Management II, L.L.C.\nIts: Investment General Partner\n\nBy:  __________________________________ \n     Name:  Carla S. Newell\n     Title:  Attorney-In-Fact\n\nRandolph B. Randolph\n\n_______________________________________ \n\n\nMuriel Randolph\n \n_______________________________________ \n\nTCV IV, L.P.\na Delaware Limited Partnership\nBy:  Technology Crossover Management IV, L.L.C.,\nIts: General Partner\n\nBy:  __________________________________ \n     Name:  Carla S. Newell\n     Title:  Attorney in Fact\n\nInstitutional Venture Partners VIII, L.P.\nBy:  Institutional Venture Management VIII, LLC\nIts: General Partner\n\nBy:  __________________________________ \n     Name:  Timothy M. Haley\n     Title:  Managing Director\n\nIVM Investment Fund VIII, LLC\nBy:  Institutional Venture Management VIII, LLC\nIts: Manager\n\nBy:  __________________________________ \n     Name:  Timothy M. Haley\n     Title:  Managing Director\n\n \nFoundation Capital II, L.P.\n\nBy:  Foundation Capital Management II, LLC\nIts: Manager\n\nBy:  __________________________________ \n     Name:\n     Title:\n\nFoundation Capital II Entrepreneurs Fund, LLC\n\nBy:  Foundation Capital Management II, LLC\nIts: Manager\n\nBy:  __________________________________ \n     Name:\n     Title:\n\nFoundation Capital II Principals Fund, LLC\n\nBy:  Foundation Capital Management II, LLC\nIts: Manager\n\nBy:  __________________________________ \n     Name:\n     Title:\n\nTCV Franchise Fund, L.P.\na Delaware Limited Partnership\nBy:\nIts:\n\nBy:  __________________________________ \n     Name:\n     Title:\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8324],"corporate_contracts_industries":[9469],"corporate_contracts_types":[9630,9629],"class_list":["post-43952","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-netflix-inc","corporate_contracts_industries-media__rental","corporate_contracts_types-securities__invest","corporate_contracts_types-securities"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43952","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43952"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43952"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43952"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43952"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}