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Exhibit 10.11c
ELASTIC NETWORKS INC.
AMENDMENT NUMBER 2 TO INVESTOR RIGHTS AGREEMENT
This Amendment Number 2 (this "Amendment") to that certain Investor Rights
Agreement dated as of May 12, 1999, among Elastic Networks Inc., a Delaware
corporation (the "Company"), Nortel Networks Inc., a Delaware corporation
("Nortel Networks"), and the individuals and entities listed on Exhibit A to
that agreement (the "Investor Rights Agreement"), as amended by that certain
Amendment to Investor Rights Agreement dated as of February 14, 2000 ("Amendment
No.1"), is made as of August 4, 2000, among the Company, Nortel Networks, the
individuals and entities listed on Exhibit A to Amendment No. 1 and Pequot
Private Equity Fund II, L.P. ("Pequot"). The Investor Rights Agreement and
Amendment No.1 are collectively referred to herein as the "Agreement".
R E C I T A L S
WHEREAS, the Company has entered into (i) two Secured Promissory Notes (the
"Notes"), each dated the date hereof, each in the original principal amount of
Five Million Dollars ($5,000,000.00), with Nortel Networks and Pequot, (ii) a
Security Agreement (the "Security Agreement"), dated the date hereof, with
Nortel Networks and Pequot to secure repayment of the Notes, and (iii) two
Warrants, each dated the date hereof, providing each of Nortel Networks and
Pequot the right to purchase Fifty One Thousand Two Hundred and Thirty (51,230)
shares of preferred or common stock of the Company at a per share purchase price
of $7.32 (the "Warrants");
WHEREAS, the Company, Nortel Networks, and the Purchasers (as defined in
Amendment No. 1) desire to amend the Agreement as set forth herein; and
WHEREAS, this Agreement will become effective upon the signature of the
Company, Nortel Networks, Pequot and all of the other parties to the Investor
Rights Agreement (as amended).
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Amendment, the parties hereto agree as follows:
1. The Agreement shall be amended by inserting immediately following the
second WHEREAS clause the following words:
WHEREAS, the Company entered into (i) two Secured Promissory Notes (the
"Notes"), each dated August 4, 2000 and in the original principal amount of Five
Million Dollars ($5,000,000.00), with Nortel Networks and Pequot Private Equity
Fund II, L.P. ("Pequot"), (ii) a Security Agreement (the "Security Agreement"),
dated August 4, 2000, with Nortel Networks and Pequot to secure repayment of the
Notes, and (iii) two Warrants, each dated August 4, 2000, providing each of
Nortel Networks and Pequot the right to purchase Fifty One Thousand Two Hundred
and Thirty (51,230) shares of preferred or common stock of the Company at a per
share purchase price of $7.32 (the "Warrants");
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2. The definition of "Registrable Shares" set forth in Section 1 of the
Agreement is amended by replacing the word "and" before clause (iv) with a comma
and by adding the phrase "and (v) the shares of Common Stock issued or issuable
under the Warrants or upon the conversion into Common Stock of the shares of
preferred stock issued or issuable under the Warrants" after the words "(iv) any
other shares of Common Stock issued in respect of such shares (because of stock
splits, stock dividends, reclassifications, recapitalizations, or similar
events)" and before the semi-colon at the end of such language.
3. The definition of "Shares" set forth in Section 1 of the Agreement is
amended by replacing the word "and" before the words "in Subsection 1.2 of the
Series B Purchase Agreement" with a comma and adding the phrase "and in the
Warrants" before the period at the end of that definition.
4. Section 3.1(g)(3) of the Agreement is amended by adding the phrase "to
any individuals or entities that lend funds to or borrow funds from the Company
or" immediately before the phrase "to officers, directors, consultants" and
after the phrase "date of this Agreement)".
5. Section 5(k) of the Agreement is amended by adding the phrase "or as
provided in the Amendment Number 2 to Investor Rights Agreement dated as of
August 4, 2000 ("Amendment Number 2"), all capitalized terms used in the
Amendment and Amendment Number 2" after the words "(the "Amendment")," and
before the words "shall have and retain".
6. The parties to the Agreement hereby consent to adding Pequot as a
party thereto. Pequot shall be deemed to be a "Purchaser" under and for all
purposes of the Agreement and each reference therein to "Purchaser" or
"Purchasers" shall be deemed to include Pequot.
7. The Agreement is hereby amended such that references in the Agreement
to "this Agreement" shall be deemed to be references to the Agreement as amended
hereby.
8. This Amendment shall be governed by and construed in accordance with
the internal laws of the State of Georgia without giving effect to any choice or
conflict of law provision or rule (whether of the State of Georgia or any other
jurisdiction) that would cause the application of laws of any other
jurisdiction.
9. This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original, and all of which taken together shall
constitute one and the same document. This Amendment may be executed by
facsimile signatures.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Amendment has been executed by the parties hereto as of
the day and year above first written.
ELASTIC NETWORKS INC.
By:____________________________________________
Name:
Title:
NORTEL NETWORKS INC.
By:____________________________________________
Name:
Title:
PEQUOT PRIVATE EQUITY FUND, L.P.
By: Pequot Capital Management, Inc., its Investment Manager
By:____________________________________________
Name: Kevin E. O'Brien
Title: General Counsel
PEQUOT PRIVATE EQUITY FUND II, L.P.
By: Pequot Capital Management, Inc., its Investment Manager
By:____________________________________________
Name: Kevin O'Brien
Title: General Counsel
PEQUOT OFFSHORE PRIVATE EQUITY FUND, INC.
By: Pequot Capital Management, Inc., its Investment Manager
By:____________________________________________
Name: Kevin E. O'Brien
Title: General Counsel
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PEQUOT VENTURE PARTNERS, L.P.
By: Pequot Capital Management, Inc., its Investment Manager
By:____________________________________________
Name: Kevin E. O'Brien
Title: General Counsel
TEXAS INSTRUMENTS INCORPORATED
By:____________________________________________
Name:
Title:
PICTET GLOBAL SECTOR FUND
By:____________________________________________
Name:
Title:
TELCOM VENTURE PARTNERS 1, L.P.
By:____________________________________________
Name:
Title:
ELANET FUND
By:____________________________________________
Name:
Title:
MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.)
By:____________________________________________
Name:
Title:
By:____________________________________________
Name:
Title:
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ITECH CAPITAL CORP. (F/K/A JORDEX RESOURCES INC.)
By:____________________________________________
Name:
Title:
JIM MCMANUS
By:____________________________________________
Jim McManus
AARON WOLFSON
By:____________________________________________
Aaron Wolfson
ABRAHAM WOLFSON
By:____________________________________________
Abraham Wolfson
ELI LEVITIN
By:____________________________________________
Eli Levitin
LEVITIN FAMILY CHARITABLE TRUST
By:____________________________________________
Name:
Title:
MWDI PARTNERSHIP
By:____________________________________________
Name:
Title:
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JACOB SAFIER
By:____________________________________________
Jacob Safier
STEVE SCHLAM
By:____________________________________________
Steve Schlam
DANVILLE CAPITAL GROUP L.L.C.
By:____________________________________________
Name: Michael Alpert
Title:
ZWD INVESTMENTS, LLC
By:____________________________________________
Name:
Title:
