An Investor Rights Agreement is between an investor and the company or person in
which the investor invests. The agreement can cover many different subjects. The
most frequent are information rights, registration rights, contractual rights of first offer or
pre-emptive rights (i.e., the right to purchase securities in subsequent equity financing
conducted by the company), and various post-closing covenants of the company. This
document is customizable to fit the needs of the contracting parties. Use this form to
clearly state the rights and responsibilities of an investor from the beginning of the
relationship between the parties.
INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement is made on this __ day of __________, _____, by and between
_____________, a __________ corporation (“the Company”) and the Investors listed in the
Schedule of Investors attached hereto as Annex A (collectively the “Investors” and individually
an “Investor”).
RECITALS
1. WHEREAS, Investor has acquired and holds as of the date of this Agreement shares of
__________________ [Common or Preferred]stock of the Company, $______ par
value per share (the “Shares”) purchased by Investor under that certain Stock Purchase
Agreement dated ___________ ( “Stock Purchase Agreement”) by and among Investor,
the Company and _______________, a _____________ corporation (“Seller”); and
2. WHEREAS, the Company wishes to grant certain registration rights with respect to the
Shares;; and
3. WHEREAS, the parties desire to provide for certain rights of the Company and Investor
as described herein;
NOW THEREFORE, in consideration of the promises herein contained and other good and
valuable consideration, the parties hereto agree as follows:
1. Definitions
“Act” means the Securities Act of 1933, as amended including any rules and regulations
thereunder;
“Affiliate” in relation to a party means an entity which controls, is controlled by or which is
in common control with a party;
“Control” in relation to an entity means power to direct the management or policies of such
entity whether through ownership of voting securities, by way of contract or otherwise;
“Commission” means the Securities and Exchange Commission;
“Common Stock” means the shares of the Company’s Common stock, no par value;
“Exchange Act” means the Securities Exchange Act of 1934, as amended including any
rules and regulations thereunder;
“Holder or Holders” means Investors listed in Annex A, holding Registrable Securities,
including any Affiliate of Investor to whom Registrable Securities are transferred in
accordance with the requirements of this Agreement;
“Register,” “Registered” and “Registration” refer to a registration effected by preparing
and filing a registration statement in compliance with the Act, and the declaration or ordering
of the effectiveness of such registration statement.
“Registration Expenses” means all expenses incurred by the Company in compliance with
Sections 2 and 3 below, including, without limitation, all registration and filing fees, printing
expenses, accounting fees and expenses, fees and disbursements of counsel for the Company,
the underwriters and one special counsel for the selling Holders, if any, blue sky fees and
expenses and the third-party expenses of any special audits incident to or required by any
such registration (but excluding the compensation to regular employees of the company, the
underwriter’s and broker’s discounts and commissions);
“Registrable Securities” means Shares sold to the Investor by the Seller pursuant to the
Stock Purchase Agreement and held by a Holder (“Shares”), including any Common Stock
of the Company issued as (or issuable upon the conversion or exercise of any warrant, right
or other security which is issued as) a dividend or other distribution with respect to, or in
exchange for or in replacement of, the Shares held from time to time by a Holder.
2. Company Registration
2.1. Right to Register
Subject to Section 10(b) below, if at any time Company proposes to register any of its
Common Stock under the Act, either for its own account or for the account of a holder,
other than (i) a registration relating solely to employee benefit plans, (ii) a registration
relating to a corporate reorganization or other transaction covered by Rule 145 under the
Act, (iii) a registration on any form that does not include substantially the same
information as would be required to be included in a registration statement covering the
sale of the Registrable Securities, or (iv) a registration in which the only Common Stock
being registered is Common Stock issuable upon conversion of debt securities or
preferred stock that are also being registered and the registration form to be used may be
used for the registration of Registrable Securities (a “Piggyback Registration”), the
Company will:
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a. give prompt written notice thereof to each Holder (which shall include a list of the
jurisdictions in which the Company intends to attempt to qualify such securities
under the applicable blue sky or other state securities laws); and
b. include in such registration (and any related qualification under blue sky laws or
other compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request or requests made, within twenty (20)
business days after receipt of such written notice from the Company, by any Holder.
2.2. Right to Terminate Registra