Free Series AA Investors' Rights Agreement - All States

[COMPANY NAME]

INVESTORS' RIGHTS AGREEMENT

This Investors' Rights Agreement (this ``Agreement'') is made as of
[_________] [__], 200_ by and among [company name], a Delaware
corporation (the ``Company'') and the persons and entities (each, an
``Investor'' and collectively, the ``Investors'') listed on Exhibit A
hereto. Unless otherwise defined herein, capitalized terms used in this
Agreement have the meanings ascribed to them in Section 1.

Recitals

WHEREAS: The Investors are parties to the Series AA Preferred Stock
Purchase Agreement of even date herewith, among the Company and the
Investors listed on the Schedule of Investors thereto (the ``Purchase
Agreement''), and it is a condition to the closing of the sale of the
Series AA Preferred Stock (the ``Shares'') that the Investors and the
Company execute and deliver this Agreement.

NOW, THEREFORE: In consideration of the mutual promises and covenants
set forth herein, and other consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:

Right of First Refusal

Right of First Refusal to Significant Holders

. The Company hereby grants to each Investor who owns at least
[___________] Shares or shares of the Company's Common Stock issued upon
conversion of the Shares (the ``Conversion Stock'') (as presently
constituted and subject to subsequent adjustments for stock splits,
stock dividends, reverse stock splits and the like) (the ``Significant
Holders''), the right of first refusal to purchase its pro rata share of
New Securities (as defined in this Section 1.1(a)) which the Company
may, from time to time, propose to sell and issue after the date of this
Agreement. A Significant Holder's pro rata share, for purposes of this
right of first refusal, is equal to the ratio of (a) the number of
shares of Common Stock owned by such Significant Holder immediately
prior to the issuance of New Securities (assuming full conversion of the
Shares and exercise of all outstanding convertible securities, rights,
options and warrants, directly or indirectly, into Common Stock held by
said Significant Holder) to (b) the total number of shares of Common
Stock outstanding immediately prior to the issuance of New Securities
(assuming full conversion of the Shares and exercise of all outstanding
convertible securities, rights, options and warrants, directly or
indirectly, held by all of the Significant Holders).

``New Securities'' shall mean any capital stock (including Common Stock
and/or Preferred Stock) of the Company whether now authorized or not,
and rights, convertible securities, options or warrants to purchase such
capital stock, and securities of any type whatsoever that are, or may
become, exercisable or convertible into capital stock; provided that the
term ``New Securities'' does not include:

the Shares and the Conversion Stock;

up to [___________] (as adjusted for any stock dividends, combinations,
stock splits, recapitalizations and the like) securities issued or
issuable to officers, employees, directors, consultants, placement
agents, and other service providers of the Company (or any subsidiary)
pursuant to stock grants, option plans, purchase plans, agreements or
other employee stock incentive programs or arrangements approved by the
Board of Directors of the Company;

securities issued pursuant to the conversion or exercise of warrants or
any outstanding convertible or exercisable securities as of this date of
this Agreement;

securities issued or issuable as a dividend or distribution on Preferred
Stock of the Company or pursuant to any event for which adjustment is
made pursuant to paragraph 3(d), 3(e) or 3(f) of the Certificate of
Incorporation of the Company;

securities offered pursuant to a bona fide, firmly underwritten public
offering pursuant to a registration statement filed under the Securities
Act;

securities issued or issuable pursuant to the acquisition of another
corporation by the Company by merger, purchase of substantially all of
the assets or other reorganization or to a joint venture agreement,
provided, that such issuances are approved by the Board of Directors of
the Company;

securities issued or issuable to banks, equipment lessors or other
financial institutions pursuant to a commercial leasing or debt
financing transaction approved by the Board of Directors of the Company;

securities issued or issuable in connection with sponsored research,
collaboration, technology license, development, OEM, marketing or other
similar agreements or strategic partnerships approved by the Board of
Directors of the Company;

securities issued to suppliers or third party service providers in
connection with the provision of goods or services pursuant to
transactions approved by the Board of Directors of the Company;

securities of the Company which are otherwise excluded by the
affirmative unanimous vote of the Board of Directors of the Company; and

any right, option or warrant to acquire any security convertible into
the securities excluded from the definition of New Securities pursuant
to subsections (i) through (x) above.

In the event the Company proposes to undertake an issuance of New
Securities, it shall give each Significant Holder written notice of its
intention, describing the type of New Securities, and their price and
the general terms upon which the Company proposes to issue the same.
Each Significant Holder shall have ten (10) calendar days after any such
notice is mailed or delivered to agree to purchase such Holder's pro
rata share of such New Securities for the price and upon the terms
specified in the notice by giving written notice to the Company, in
substantially the form attached hereto as Schedule 1, and stating
therein the quantity of New Securities to be purchased.

In the event the Significant Holders fail to exercise fully the right of
first refusal within said ten (10) day period (the ``Election Period''),
the Company shall have ninety (90) days thereafter to sell or enter into
an agreement (pursuant to which the sale of New Securities covered
thereby shall be closed, if at all, within ninety (90) days from the
date of said agreement) to sell that portion of the New Securities with
respect to which the Significant Holders' right of first refusal option
set forth in this Section 1.1 was not exercised, at a price and upon
terms no more favorable to the purchasers thereof than specified in the
Company's notice to Significant Holders delivered pursuant to Section
1.1(b). In the event the Company has not sold within such ninety (90)
day period following the Election Period, or such ninety (90) day period
following the date of said agreement, the Company shall not thereafter
issue or sell any New Securities, without first again offering such
securities to the Significant Holders in the manner provided in this
Section 1.1.

The right of first refusal granted under this Agreement shall expire
upon, and shall not be applicable to the first to occur of (x) the
Company's Initial Public Offering or (y) five years after the date of
this Agreement.

Covenants of the Company

The Company hereby covenants and agrees, as follows:

Basic Financial Information.

Provided that the Company has prepared financial statements, the Company
will furnish the following reports to each Investor [who owns at least
[_________] Shares and/or Conversion Stock (as presently constituted and
subject to subsequent adjustments for stock splits, stock dividends,
reverse stock splits, and the like)]:

as soon as practicable after the end of each fiscal year of the Company,
an unaudited balance sheet of the Company as at the end of such fiscal
year, and unaudited statements of income and cash flows of the Company
for such year, prepared in accordance with U.S. generally accepted
accounting principles consistently applied.

As soon as practicable after the end of the first, second and third
quarterly accounting periods in each fiscal year of the Company, an
unaudited balance sheet of the Company as of the end of each such
quarterly period, and unaudited statements of income and cash flows of
the Company for such period, prepared in accordance with U.S. generally
accepted accounting principles consistently applied, subject to changes
resulting from normal year-end audit adjustments.

Confidentiality

. Anything in this Agreement to the contrary notwithstanding, no
Investor by reason of this Agreement shall have access to any trade
secrets or classified information of the Company. The Company shall not
be required to comply with any information rights in respect of any
Investor whom the Company reasonably determines to be a competitor or an
officer, employee, director or holder of more than ten percent (10%) of
a competitor. Each Investor acknowledges that the information received
by them pursuant to this Agreement may be confidential and for its use
only, and it will not reproduce, disclose or disseminate such
information to any other person (other than its employees or agents
having a need to know the contents of such information, and its
attorneys).

Termination of Covenants

. The covenants set forth in this Section 2 shall terminate and be of
no further force and effect after the closing of the Company's Initial
Public Offering.

Restrictions on Transfer

Restrictions on Transfer

The holder of each certificate representing Securities (as defined
below) (a ``Holder'') by acceptance thereof agrees to comply in all
respects with the provisions of this Section 3.1. Each Holder agrees
not to make any sale, assignment, transfer, pledge or other disposition
of all or any portion of the Securities, or any beneficial interest
therein, unless and until (i) the transferee thereof has agreed in
writing for the benefit of the Company to take and hold such Securities
subject to, and to be bound by, the terms and conditions set forth in
this Agreement, including, without limitation, this Section 3.1 and
Section 3.3, except for transfers permitted under Section 3.1(b), and
(ii) such Holder shall have given prior written notice to the Company of
such Holder's intention to make such disposition and shall have
furnished the Company with a detailed description of the manner and
circumstances of the proposed disposition, and, if requested by the
Company, such Holder shall have furnished the Company, at its expense,
with an opinion of counsel, reasonably satisfactory to the Company.

Permitted transfers include (i) a transfer not involving a change in
beneficial ownership, or (ii) in transactions involving the distribution
without consideration of Securities by any Holder to (x) a parent,
subsidiary or other affiliate of Holder that is a corporation or (y) any
of its partners, members or other equity owners, or retired partners,
retired members or other equity owners, or to the estate of any of its
partners, members or other equity owners or retired partners, retired
members or other equity owners, or (iii) transfers in compliance with
Rule 144(k), as long as the Company is furnished with satisfactory
evidence of compliance with such Rule; provided, in each case, that the
Holder thereof shall give written notice to the Company of such Holder's
intention to effect such disposition and shall have furnished the
Company with a detailed description of the manner and circumstances of
the proposed disposition.

Each certificate representing Securities shall (unless otherwise
permitted by the provisions of this Agreement) be stamped or otherwise
imprinted with a legend substantially similar to the following (in
addition to any legend required under applicable state securities laws):

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE ``ACT''), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS
PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO
REGISTRATION OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES
MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER
THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE
COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD IN THE EVENT
OF A PUBLIC OFFERING, AS SET FORTH IN AN INVESTORS' RIGHTS AGREEMENT, A
COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.

The Holders consent to the Company making a notation on its records and
giving instructions to any transfer agent of the Securities in order to
implement the restrictions on transfer established in this Section 3.1.

The first legend referring to federal and state securities laws
identified in Section 3.1(c) hereof stamped on a certificate evidencing
the Securities and the stock transfer instructions and record notations
with respect to such Securities shall be removed and the Company shall
issue a certificate without such legend to the holder of such Securities
if (i) such securities are registered under the Securities Act, or (ii)
such holder provides the Company with an opinion of counsel reasonably
acceptable to the Company to the effect that a public sale or transfer
of such securities may be made without registration under the Securities
Act, or (iii) such holder provides the Company with reasonable
assurances, which may, at the option of the Company, include an opinion
of counsel satisfactory to the Company, that such securities can be sold
pursuant to Section (k) of Rule 144 under the Securities Act.

Rule 144 Reporting

. With a view to making available the benefits of certain rules and
regulations of the Commission that may permit the sale of the Securities
to the public without registration, the Company agrees to use its
commercially reasonable efforts to:

Make and keep public information regarding the Company available as
those terms are understood and defined in Rule 144 under the Securities
Act, at all times from and after ninety (90) days following the
effective date of the first registration under the Securities Act filed
by the Company for an offering of its securities to the general public;

File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the
Exchange Act at any time after it has become subject to such reporting
requirements; and

So long as a Holder owns any Securities, furnish to the Holder forthwith
upon written request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 (at any time from
and after ninety (90) days following the effective date of the first
registration statement filed by the Company for an offering of its
securities to the general public), and of the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of
the Company, and such other reports and documents so filed as a Holder
may reasonably request in availing itself of any rule or regulation of
the Commission allowing a Holder to sell any such securities without
registration.

Market Stand-Off Agreement

. Each Holder hereby agrees that such Holder shall not sell or otherwise
transfer, make any short sale of, grant any option for the purchase of,
or enter into any hedging or similar transaction with the same economic
effect as a sale, of any Common Stock (or other securities) of the
Company held by such Holder (other than those included in the
registration) during the one hundred eighty (180) day period following
the effective date of a registration statement of the Company filed
under the Securities Act (or such other period as may be requested by
the Company or an underwriter to accommodate regulatory restrictions on
(i) the publication or other distribution of research reports and (ii)
analyst recommendations and opinions, including, but not limited to, the
restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4),
or any successor provisions or amendments thereto), provided that: all
officers and directors of the Company and holders of at least one
percent (1%) of the Company's voting securities are bound by and have
entered into similar agreements. The obligations described in this
Section 3.3 shall not apply to a registration relating solely to
employee benefit plans on Form S-l or Form S-8 or similar forms that may
be promulgated in the future, or a registration relating solely to a
transaction on Form S-4 or similar forms that may be promulgated in the
future. The Company may impose stop-transfer instructions and may stamp
each such certificate with the second legend set forth in Section 4.1(c)
hereof with respect to the shares of Common Stock (or other securities)
subject to the foregoing restriction until the end of such one hundred
eighty (180) day (or other) period. Each Holder agrees to execute a
market standoff agreement with said underwriters in customary form
consistent with the provisions of this Section 3.3.

Definitions

Certain Definitions

. As used in this Agreement, the following terms shall have the
meanings set forth below:

``Commission'' shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.

``Exchange Act'' shall mean the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and
regulations thereunder, all as the same shall be in effect from time to
time.

``Initial Public Offering'' shall mean the closing of the Company's
first firm commitment underwritten public offering of the Company's
Common Stock registered under the Securities Act.

``Rule 144'' shall mean Rule 144 as promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or
any similar successor rule that may be promulgated by the Commission.

``Securities'' shall mean (i) shares of Common Stock issued or issuable
pursuant to the conversion of the Shares and (ii) any Common Stock
issued as a dividend or other distribution with respect to or in
exchange for or in replacement of the shares referenced in (i) above,
required to bear the first legend set forth in Section 3.1(c) hereof.

``Securities Act'' shall mean the Securities Act of 1933, as amended, or
any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.

Miscellaneous

Amendment

. Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended, waived, discharged or terminated other than
by a written instrument referencing this Agreement and signed by the
Company and the Holders holding a majority of the Common Stock issued or
issuable upon conversion of the Shares issued pursuant to the Purchase
Agreement (excluding any of such shares that have been sold to the
public or pursuant to Rule 144); provided, however, that Investors
purchasing shares of Series AA Preferred Stock in a Closing after the
Initial Closing (each as defined in the Purchase Agreement) may become
parties to this Agreement, by executing a counterpart of this Agreement
without any amendment of this Agreement pursuant to this paragraph or
any consent or approval of any other Holder. Any such amendment,
waiver, discharge or termination effected in accordance with this
paragraph shall be binding upon each Holder and each future holder of
all such securities of Holder. Each Holder acknowledges that by the
operation of this paragraph, the holders of a majority of the Common
Stock issued or issuable upon conversion of the Shares issued pursuant
to the Purchase Agreement (excluding any of such shares that have been
sold to the public or pursuant to Rule 144) will have the right and
power to diminish or eliminate all rights of such Holder under this
Agreement.

Notices

. All notices and other communications required or permitted hereunder
shall be in writing and shall be mailed by registered or certified mail,
postage prepaid, sent by facsimile or electronic mail or otherwise
delivered by hand or by messenger addressed:

if to an Investor, at the Investor's address, facsimile number or
electronic mail address as shown in the Company's records, as may be
updated in accordance with the provisions hereof; or

if to the Company, one copy should be sent to [insert Company's
address], [insert facsimile number], Attn: Chief Executive Officer, or
at such other address as the Company shall have furnished to the
Investors.

Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt
or 72 hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and
mailed as aforesaid or, if sent by facsimile, upon confirmation of
facsimile transfer or, if sent by electronic mail, upon confirmation of
delivery when directed to the electronic mail address set forth on the
Schedule of Investors.

Governing Law

. This Agreement shall be governed in all respects by the internal laws
of the State of [_____________].

Successors and Assigns

. This Agreement, and any and all rights, duties and obligations
hereunder, shall not be assigned, transferred, delegated or sublicensed
by any Investor without the prior written consent of the Company. Any
attempt by an Investor without such permission to assign, transfer,
delegate or sublicense any rights, duties or obligations that arise
under this Agreement shall be void. Subject to the foregoing and except
as otherwise provided herein, the provisions of this Agreement shall
inure to the benefit of, and be binding upon, the successors, assigns,
heirs, executors and administrators of the parties hereto.

Entire Agreement

. This Agreement and the exhibits hereto constitute the full and entire
understanding and agreement between the parties with regard to the
subjects hereof. No party hereto shall be liable or bound to any other
party in any manner with regard to the subjects hereof or thereof by any
warranties, representations or covenants except as specifically set
forth herein.

Delays or Omissions

. Except as expressly provided herein, no delay or omission to exercise
any right, power or remedy accruing to any party to this Agreement upon
any breach or default of any other party under this Agreement shall
impair any such right, power or remedy of such non-defaulting party, nor
shall it be construed to be a waiver of any such breach or default, or
an acquiescence therein, or of or in any similar breach or default
thereafter occurring, nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any
kind or character on the part of any party of any breach or default
under this Agreement, or any waiver on the part of any party of any
provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement or by law or otherwise
afforded to any party to this Agreement, shall be cumulative and not
alternative.

Severability

. If any provision of this Agreement becomes or is declared by a court
of competent jurisdiction to be illegal, unenforceable or void, portions
of such provision, or such provision in its entirety, to the extent
necessary, shall be severed from this Agreement, and such court will
replace such illegal, void or unenforceable provision of this Agreement
with a valid and enforceable provision that will achieve, to the extent
possible, the same economic, business and other purposes of the illegal,
void or unenforceable provision. The balance of this Agreement shall be
enforceable in accordance with its terms.

Titles and Subtitles

. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to
sections, paragraphs and exhibits shall, unless otherwise provided,
refer to sections and paragraphs hereof and exhibits attached hereto.

Counterparts

. This Agreement may be executed in any number of counterparts, each of
which shall be enforceable against the parties that execute such
counterparts, and all of which together shall constitute one instrument.

Telecopy Execution and Delivery

. A facsimile, telecopy or other reproduction of this Agreement may be
executed by one or more parties hereto and delivered by such party by
facsimile or any similar electronic transmission device pursuant to
which the signature of or on behalf of such party can be seen. Such
execution and delivery shall be considered valid, binding and effective
for all purposes. At the request of any party hereto, all parties
hereto agree to execute and deliver an original of this Agreement as
well as any facsimile, telecopy or other reproduction hereof.

Termination Upon Change of Control

. Notwithstanding anything to the contrary herein, this Agreement
(excluding any then-existing obligations) shall terminate upon (a) the
acquisition of the Company by another entity by means of any transaction
or series of related transactions to which the Company is party
(including, without limitation, any stock acquisition, reorganization,
merger or consolidation but excluding any sale of stock for capital
raising purposes) other than a transaction or series of transactions in
which the holders of the voting securities of the Company outstanding
immediately prior to such transaction continue to retain (either by such
voting securities remaining outstanding or by such voting securities
being converted into voting securities of the surviving entity), as a
result of shares in the Company held by such holders prior to such
transaction, at least fifty percent (50%) of the total voting power
represented by the voting securities of the Corporation or such
surviving entity outstanding immediately after such transaction or
series of transactions; or (b) a sale, lease or other conveyance of all
substantially all of the assets of the Company.

Conflict

. In the event of any conflict between the terms of this Agreement and
the Company's Certificate of Incorporation or its Bylaws, the terms of
the Company's Certificate of Incorporation or its Bylaws, as the case
may be, will control.

(Remainder of Page Intentionally Left Blank)

IN WITNESS WHEREOF, the parties hereto have executed this Investors'
Rights Agreement effective as of the day and year first above written.

[COMPANY NAME]

a Delaware corporation

By:

Name:

Title:

[INVESTOR NAME]



(Signature)



(Name of Investor)



(Name and Title of Signatory, if Applicable)

EXHIBIT A

INVESTORS



Schedule 1

NOTICE AND WAIVER/ELECTION OF

RIGHT OF FIRST REFUSAL

I do hereby waive or exercise, as indicated below, my rights of first
refusal under the Investors' Rights Agreement dated as of _____________
(the ``Agreement''):

Waiver of 10 Days' Notice Period in Which to Exercise Right of First
Offer: (please check only one)

( ) WAIVE in full, on behalf of all Holders, the 10-day notice period
provided to exercise my right of first refusal granted under the
Agreement.

( ) DO NOT WAIVE the notice period described above.

Issuance and Sale of New Securities: (please check only one)

( ) WAIVE in full the right of first refusal granted under the
Agreement with respect to the issuance of the New Securities.

( ) ELECT TO PARTICIPATE in $__________ [PLEASE PROVIDE AMOUNT] in New
Securities proposed to be issued, representing less than my pro rata
portion of the aggregate of $[___________] in New Securities being
offered in the financing.

( ) ELECT TO PARTICIPATE in $__________ in New Securities proposed to
be issued, representing my full pro rata portion of the aggregate of
$[____________] in New Securities being offered in the financing.

( ) ELECT TO PARTICIPATE in my full pro rata portion of the aggregate
of $[_________] in New Securities being made available in the financing
and, to the extent available, the greater of (x) an additional
$__________ [PLEASE PROVIDE AMOUNT] or (y) my pro rata portion of any
remaining investment amount available in the event other Significant
Holders do not exercise their full rights of first refusal with respect
to the $[_____________] in New Securities being offered in the
financing.

Date: ___________, 20__ ______________________________________

Signature of Stockholder or Authorized

Signatory



Title, if applicable

This is neither a commitment to purchase nor a commitment to issue the
New Securities described above. Such issuance can only be made by way
of definitive documentation related to such issuance. [Company] will
supply you with such definitive documentation upon request or if you
indicate that you would like to exercise your first offer rights in
whole or in part.

- PAGE 2 -

This Investors' Rights Agreement and all of the Series AA financing
documents on this website have been prepared by Wilson Sonsini Goodrich
& Rosati for informational purposes only and do not constitute
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(Signature Page to Investors' Rights Agreement)