Legal Investor Rights Agreement

LEGAL INVESTOR RIGHTS AGREEMENT

This Investor Rights Agreement (the "Agreement") is made as of by and between Company Name: , an entity organized as under the laws of , with its principal place of business at (the "Company"), and Investor Name: (the "Investor").

RECITALS

WHEREAS, the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the Company, certain shares of the Company's capital stock on the terms and conditions set forth herein; and

WHEREAS, as a material inducement to the Investor's purchase and in order to protect the Investor's rights in connection with its investment, the Company is willing to grant the Investor certain information rights, registration rights, board observation rights, and preemptive rights as set forth below.

WHEREAS, the parties intend that this Agreement govern their respective rights and obligations with respect to the Investor's ownership of securities of the Company.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below:

"Purchased Securities" means the class and number of securities acquired by the Investor at the Closing: at a purchase price per share of .

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly Controls, is Controlled by, or is under common Control with such Person. "Control" has the meaning commonly ascribed in corporate practice.

2. INFORMATION RIGHTS

2.1 Financial Information. For so long as the Investor owns at least of the outstanding voting power of the Company on a fully diluted basis, the Company shall deliver to the Investor: (a) within 90 days after the end of each fiscal year, audited annual financial statements prepared in accordance with GAAP (or substantially equivalent principles) and accompanied by an auditor's report; (b) within 45 days after the end of each fiscal quarter, unaudited quarterly financial statements; and (c) a copy of the annual budget and business plan for each fiscal year upon approval by the Board of Directors.

2.2 Inspection Rights. The Company shall permit the Investor and its representatives, upon reasonable advance notice and during normal business hours, to inspect the Company's books and records and to discuss the Company's affairs with senior management; provided that such rights shall be subject to customary confidentiality obligations.

3. REGISTRATION RIGHTS

3.1 Demand Registration Rights. If the Investor requests in writing that the Company effect a registration of the Investor's Registrable Securities (as defined below) under applicable securities laws, the Company shall have ninety (90) days to prepare and file a registration statement. If the Company fails to file such registration statement within such period, the Investor shall have the right to require the Company to file such registration. The Investor shall have no more than demand registrations in total.

3.2 Piggyback Registration Rights. If the Company proposes to register any securities for sale (other than issuances in a public offering by the Company), the Company shall include the Investor's Registrable Securities in such registration upon request of the Investor, subject to customary cutback provisions if inclusion would cause undue dilution or other material harm to the issuer.

3.3 Expenses, Underwriting, and Indemnification. The Company shall bear all expenses (other than underwriting discounts and selling commissions) of any registration initiated by the Company. In connection with any registration initiated by the Investor, the Investor shall pay underwriting discounts and selling commissions attributable to the Registrable Securities it sells. Each party shall indemnify the other for losses arising out of any untrue statement or omission in a registration statement in accordance with customary allocation and procedures.

4. BOARD OBSERVER AND VOTING

4.1 Board Observer. For so long as the Investor owns at least of the outstanding voting power, the Investor shall have the right to appoint one non-voting observer to attend all meetings of the Board of Directors and receive all written materials distributed to the Board, provided that such observer shall be bound by the confidentiality provisions set forth in Section 9.

4.2 Voting Covenants. The Investor agrees to vote its Shares in favor of all actions recommended by the Board, provided such actions are not inconsistent with the Investor's rights under this Agreement or applicable law.

5. PREEMPTIVE RIGHTS

5.1 Right to Participate. The Company hereby grants the Investor the right to purchase its pro rata share of any new securities of the Company issued after the date hereof, subject to customary exceptions including issuances to employees, strategic partners, acquisitions, or pursuant to equity incentive plans. The Investor's pro rata share is based upon the Investor's ownership percentage of the outstanding voting securities on a fully diluted basis, currently .

5.2 Exercise Procedure. The Company shall give written notice of any proposed issuance, specifying the type and terms of the securities and the period within which the Investor must exercise its rights (not less than 20 business days). The Investor shall exercise by delivering written notice and funds within such period.

6. TRANSFER RESTRICTIONS; RIGHT OF FIRST REFUSAL

6.1 Transfer Restrictions. Except as permitted in this Agreement, no Shareholder shall Transfer any securities of the Company unless such transfer is in compliance with the Company's certificate of incorporation and applicable securities laws and is conditioned upon the transferee's agreement to be bound by the terms of this Agreement.

6.2 Right of First Refusal. If a Shareholder receives an offer from a third party to purchase any securities (the "Offered Securities"), the Company and then the Investor (on a pro rata basis) shall have a right of first refusal to purchase such Offered Securities on the same terms and conditions. The transferring Shareholder shall deliver written notice of the proposed transfer and give Company and Investor thirty (30) days to elect to purchase.

7. TAG-ALONG AND DRAG-ALONG

7.1 Tag-Along. If any group of Founders or other holders propose to sell a controlling block of Shares to a third party, the Investor shall have a right to participate in such sale on a pro rata basis on the same terms and conditions as the selling holders.

7.2 Drag-Along. If holders of at least of the voting power approve a sale of the Company, the Investor agrees to vote in favor of such sale and to sell its Shares on the same terms and conditions, provided that such sale includes customary representations, warranties, closing conditions, and indemnities no less favorable than those applicable to the selling holders.

8. CONFIDENTIALITY

8.1 Confidential Information. Each party shall keep confidential and shall not disclose to any third party any non-public information concerning the other party's business, finances, operations, customers or technology obtained pursuant to this Agreement, except as required by law or to its Affiliates, legal counsel, or accountants on a need-to-know basis under customary confidentiality restrictions.

9. COVENANTS AND REMEDIES

9.1 Covenants. The Company covenants to use commercially reasonable efforts to comply with all applicable laws, maintain the corporate existence of the Company, and provide notice to the Investor of any material adverse developments affecting the Company.

9.2 Specific Performance. The parties agree that monetary damages may be an inadequate remedy for breach of certain provisions of this Agreement (including Sections 2 and 8) and that the non-breaching party shall be entitled to injunctive or other equitable relief without the necessity of posting bond.

10. NOTICES

All notices under this Agreement shall be in writing and shall be deemed given upon delivery in person, upon confirmed receipt if sent by certified mail, or upon confirmed receipt of delivery if sent by nationally recognized overnight courier, addressed to the respective notice addresses set forth above (or to such other address as a party may designate by notice).

11. AMENDMENTS; WAIVER; COUNTERPARTS

This Agreement may not be amended except by a written instrument signed by the Company and the Investor. No waiver of any provision of this Agreement shall be effective unless in writing and signed by the party waiving compliance. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

12. GOVERNING LAW; SEVERABILITY; ENTIRE AGREEMENT

12.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of without regard to conflict of laws principles.

12.2 Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect and shall be construed to achieve, to the extent possible, the original intent of the parties.

12.3 Entire Agreement. This Agreement, together with any exhibits, schedules and the Company's organizational documents referenced herein, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations and understandings.

13. MISCELLANEOUS

13.1 Assignment. Neither party may assign its rights under this Agreement without the prior written consent of the other party, except that the Investor may assign rights to any Affiliate or to any subsequent holder of the Purchased Securities.

13.2 Expenses. Each party shall bear its own expenses incurred in connection with the negotiation, preparation and execution of this Agreement, except as otherwise provided herein.

REPRESENTATIONS AND WARRANTIES

Each party represents and warrants that (a) it has the full corporate or individual power and authority to enter into and perform its obligations under this Agreement; (b) the execution and delivery of this Agreement have been duly authorized by all necessary action; and (c) this Agreement constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, and other laws affecting creditors' rights.

ACKNOWLEDGMENT

The parties acknowledge that they have had an opportunity to consult with counsel of their choice, that they understand the terms and effects of this Agreement, and that they execute this Agreement voluntarily and without duress.

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