EXHIBIT 4.3
TENFOLD CORPORATION
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
------------------------------------------------
This Amended and Restated Investors' Rights Agreement (the "Agreement") is made
---------
as of the 24th day of November, 1997, by and among TenFold Corporation, a
Delaware corporation (the "Company"), the investors listed on Exhibit A hereto
------- ---------
(the "Investors" and individually an "Investor") and Xxxx X. Xxxxxxx, Xxxxxxx X.
--------- --------
Xxxxxx and the Xxxxxx Children's Trust each of which is herein referred to as a
"Founder".
-------
RECITALS
--------
1. The Company and Indus International, Inc. ("Indus") entered into an
Investor's Rights Agreement on March 4, 1997 (the "Existing Agreement"), in
connection with the purchase by Indus of certain shares of Series A Preferred
Stock of the Company.
2. The Company and Winter Harbor, L.L.C. ("Winter Harbor") have entered
into a Series B Preferred Stock Purchase Agreement (the "Purchase Agreement") of
------------------
even date herewith pursuant to which the Company desires to sell to Winter
Harbor and Winter Harbor desires to purchase from the Company shares of the
Company's Series B Preferred Stock. A condition to Winter Harbor's obligations
under the Purchase Agreement is that the Company, the Founders, Winter Harbor
and the other Investor enter into this Agreement in order to provide Winter
Harbor with (i) certain rights to register shares of the Company's Common Stock
issuable upon conversion of the Series B Preferred Stock held by Winter Harbor,
(ii) certain rights to receive or inspect information pertaining to the Company,
and (iii) a right of first offer with respect to certain issuances by the
Company of its securities. The Company, Indus and the Founders each desire to
induce Winter Harbor to purchase shares of Series B Preferred Stock pursuant to
the Purchase Agreement by agreeing to the terms and conditions set forth herein,
in consideration of which Indus expressly waives its rights under Section 2.3 of
the Existing Agreement with respect to the sale of series B Preferred Stock
contemplated by the Purchase Agreement.
AGREEMENT
---------
The parties hereby agree as follows:
. REGISTRATION RIGHTS. The Company and the Investors covenant and
-------------------
agree as follows:
1.1 DEFINITIONS. For purposes of this Section 1:
-----------
(a) The terms "register," "registered," and "registration"
-------- ---------- ------------
refer to a registration effected by preparing and filing a registration
statement or similar
document in compliance with the Securities Act of 1933, as amended (the "Act"),
and the declaration or ordering of effectiveness of such registration statement
or document;
(b) The term "Registrable Securities" means (i) the shares of Common
----------------------
Stock issuable or issued upon conversion of the Series A Preferred Stock (the
"Series A Stock"), (ii) the shares of Common Stock issuable as issued upon
--------------
conversion of the Series B Preferred Stock (the "Series B Stock" and with the
--------------
Series A Stock, collectively, the "Stock"), (iii) any other shares of 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
Stock, and (iv) the shares of Common Stock issued to the Founders (the
"Founders' Stock"), provided, however, that the term Registrable Securities
--------------- -------- -------
shall exclude in all cases any Registrable Securities sold by a person in a
transaction in which his or her rights under this Agreement are not assigned.
Notwithstanding the foregoing, Common Stock or other securities shall only be
treated as Registrable Securities if and so long as they have not been (A) sold
to or through a broker or dealer or underwriter in a public distribution or a
public securities transaction, or (B) sold in a transaction exempt from the
registration and prospectus delivery requirements of the Act under Section 4(1)
thereof so that all transfer restrictions, and restrictive legends with respect
thereto, if any, are removed upon the consummation of such sale;
(c) The number of shares of "Registrable Securities then outstanding"
---------------------------------------
shall be determined by the number of shares of Common Stock outstanding which
are, and the number of shares of Common Stock issuable pursuant to then
exercisable or convertible securities which are, Registrable Securities;
(d) The term "Holder" means any person owning or having the right to
------
acquire Registrable Securities or any assignee thereof in accordance with
Section 1.13 hereof;
(e) The term "Form S-3" means such form under the Act as in effect on
--------
the date hereof or any successor form under the Act; and
(f) The term "SEC" means the Securities and Exchange Commission.
---
1.2 REQUEST FOR REGISTRATION.
------------------------
(a) If the Company shall receive, at any time after six (6) months
after the effective date of the first registration statement for a public
offering of securities of the Company (other than a registration statement
relating either to the sale of securities to employees of the Company pursuant
to a stock option, stock purchase or similar plan or an SEC Rule 145
transaction), a written request from the Holders of a majority of the
-2-
Registrable Securities then outstanding or from Holders of a majority of the
Series A Stock then outstanding or from Holders of a majority of the Series B
Stock then outstanding that the Company file a registration statement under the
Act covering the registration of at least twenty-five percent (25%) of such
Registrable Securities then outstanding (or a lesser percent if the anticipated
aggregate offering price, net of underwriting discounts and commissions, would
exceed $10,000,000), then the Company shall, within ten (10) days of the receipt
thereof, give written notice of such request to all Holders and shall, subject
to the limitations of subsection 1.2(b), use its best efforts to effect as soon
as practicable, and in any event within 60 days of the receipt of such request,
the registration under the Act of all Registrable Securities which the Holders
request to be registered in a writing delivered to the Company within twenty
(20) days of the mailing of such notice by the Company in accordance with
Section 3.5.
(b) If the Holders initiating the registration request hereunder
("Initiating Holders") intend to distribute the Registrable Securities covered
------------------
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to this Section 1.2 and the Company
shall include such information in the written notice referred to in subsection
1.2(a). The underwriter will be selected by a majority in interest of the
Initiating Holders and shall be reasonably acceptable to the Company. In such
event, the right of any Holder to include his Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in subsection 1.4(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by a majority in interest of the Initiating
Holders. Notwithstanding any other provision of this Section 1.2, if the
underwriter advises the Initiating Holders in writing that marketing factors
require a limitation of the number of shares to be underwritten, then the
Initiating Holders shall so advise all Holders of Registrable Securities which
would otherwise be underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the underwriting shall be
allocated among all Holders thereof, including the Initiating Holders, in
proportion (as nearly as practicable) to the amount of Registrable Securities of
the Company owned by each Holder; provided, however, that the number of shares
-------- -------
of Registrable Securities to be included in such underwriting shall not be
reduced unless all other securities are first entirely excluded from the
underwriting; provided further that if the Initiating Holders are the Holders
-------- -------
referred to in Section 1.1(b)(i) or Section 1.1(b)(ii) the Registrable
Securities held by such Initiating Holders shall not be reduced unless all other
securities are first entirely excluded from the underwriting, or in the case of
Registrable Securities held by Holders referred to in Section 1.1(b)(i) or
Section 1.1(b)(ii) reduced to the minimum permissible amount; and provided
--------
further that in every underwriting pursuant to this Section 1.2 the Registrable
-------
Securities held by Holders referred to in Section 1.1(b)(i) or Section
1.1(b)(ii) shall not be reduced below 20% of the Registrable Securities included
in such underwriting.
-3-
(c) Notwithstanding the foregoing, if the Company shall furnish to
Holders requesting a registration statement pursuant to this Section 1.2, a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such registration statement
to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer such filing
for a period of not more than 120 days after receipt of the request of the
Initiating Holders; provided, however, that the Company may not utilize this
-------- -------
right more than once in any twelve-month period.
(d) In addition, the Company shall not be obligated to effect, or to
take any action to effect, any registration pursuant to this Section 1.2:
(i) After the Company has effected one, one registration
initiated by Holders referred to in Section 1.1(b)(i), one registration
initiated by Holders referred to in Section 1.1(b)(ii) and one other
registration, in each case pursuant to this Section 1.2, and each such
registration has been declared or ordered effective;
(ii) During the period starting with the date sixty (60) days
prior to the Company's good faith estimate of the date of filing of, and ending
on a date one hundred eighty (180) days after the effective date of, a
registration subject to Section 1.3 hereof; provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; or
(iii) If the Initiating Holders propose to dispose of shares of
Registrable Securities that may be immediately registered on Form S-3 pursuant
to a request made pursuant to Section 1.12 below.
1.3 COMPANY REGISTRATION. If (but without any obligation to do so) the
--------------------
Company proposes to register (including for this purpose a registration effected
by the Company for stockholders other than the Holders) any of its stock under
the Act in connection with the public offering of such securities solely for
cash (other than a registration relating solely to the sale of securities to
participants in a Company stock plan or a transaction covered by Rule 145 under
the Act, a registration in which the only stock being registered is Common Stock
issuable upon conversion of debt securities which are also being registered, or
any registration on any form which 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), the Company shall, at such
time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder given within twenty (20) days after mailing of
such notice by the Company in accordance with Section 3.5, the Company shall,
subject to the provisions of Section 1.8, cause to be registered under the Act
all of the Registrable Securities that each such Holder has requested to be
registered.
-4-
1.4 OBLIGATIONS OF THE COMPANY. Whenever required under this Section 1
--------------------------
to effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days. The
Company shall not be required to file, cause to become effective or maintain the
effectiveness of any registration statement that contemplates a distribution of
securities on a delayed or continuous basis pursuant to Rule 415 under the Act.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement for up to one hundred twenty (120) days.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, such
obligation to continue for one hundred twenty (120) days.
-5-
(g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(i) Use its best efforts to furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to this Section 1, on
the date that such Registrable Securities are delivered to the underwriters for
sale in connection with a registration pursuant to this Section 1, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (i) an opinion, dated such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a letter
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holders requesting registration of
Registrable Securities.
1.5 FURNISH INFORMATION. It shall be a condition precedent to the
-------------------
obligations of the Company to take any action pursuant to this Section 1 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities. The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 or Section 1.12 of this Agreement
if, as a result of the application of the preceding sentence, the number of
shares or the anticipated aggregate offering price of the Registrable Securities
to be included in the registration does not equal or exceed the number of shares
or the anticipated aggregate offering price required to originally trigger the
Company's obligation to initiate such registration as specified in subsection
1.2(a) or subsection 1.12(b)(2), whichever is applicable.
1.6 EXPENSES OF DEMAND REGISTRATION. All expenses other than underwriting
-------------------------------
discounts and commissions incurred in connection with registration, filings or
qualifications pursuant to Section 1.2, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company and the reasonable fees and
disbursements not to exceed $20,000 of one counsel for the selling Holders shall
be borne by the Company; provided, however, that the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 1.2 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered (in which case all
-6-
participating Holders shall bear such expenses), unless the Holders of a
majority of the Registrable Securities agree to forfeit their right to one
demand registration pursuant to Section 1.2.
1.7 EXPENSES OF COMPANY REGISTRATION. The Company shall bear
--------------------------------
and pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.3 for each Holder (which right may be assigned as provided
in Section 1.13), including (without limitation) all registration, filing, and
qualification fees, printers' and accounting fees relating or apportionable
thereto and the reasonable fees and disbursements of one counsel for the selling
Holders selected by them with the approval of the Company, which approval shall
not be unreasonably withheld, but excluding underwriting discounts and
commissions relating to Registrable Securities.
1.8 UNDERWRITING REQUIREMENTS. In connection with any offering
-------------------------
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 1.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the selling stockholders according to
the total amount of securities entitled to be included therein owned by each
selling stockholder or in such other proportions as shall mutually be agreed to
by such selling stockholders); provided however that in every underwriting
-------- -------
pursuant to Section 1.3 the Registrable Securities held by Holders referred to
in either Section 1.1(b)(i) or Section 1.1(b)(ii) shall not be reduced below 20%
of the Registrable Securities included in such underwriting. For purposes of
the preceding parenthetical concerning apportionment, for any selling
stockholder which is a holder of Registrable Securities and which is a
partnership or corporation, the partners, retired partners and stockholders of
such holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single "selling stockholder," and any pro-rata reduction with
-------------------
respect to such "selling stockholder" shall be based upon the aggregate amount
of shares carrying registration rights owned by all entities and individuals
included in such "selling stockholder," as defined in this sentence.
1.9 DELAY OF REGISTRATION. No Holder shall have any right to
---------------------
obtain or seek an injunction restraining or otherwise delaying any such
registration as the
-7-
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 1.
1.10 INDEMNIFICATION. In the event any Registrable Securities are included
---------------
in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a
---------
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by the
Company of the Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Act, the Exchange Act or any state securities
law; and the Company will pay to each such Holder, underwriter or controlling
person, as incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this subsection 1.10(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability, or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for any such loss,
claim, damage, liability, or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls the
Company within the meaning of the Act, any underwriter, any other Holder selling
securities in such registration statement and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages, or liabilities
(joint or several) to which any of the foregoing persons may become subject,
under the Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereto) arise
out of or are based upon any Violation, in each case to the extent (and only to
the extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and each such Holder will pay, as incurred, any legal or
other expenses reasonably incurred by any person intended to be indemnified
pursuant to this subsection 1.10(b), in connection
-8-
with investigating or defending any such loss, claim, damage, liability, or
action; provided, however, that the indemnity agreement contained in this
subsection 1.10(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder, which consent shall not be unreasonably withheld;
provided, that, in no event shall any indemnity under this subsection 1.10(b)
exceed the net proceeds from the offering received by such Holder, except in the
case of willful fraud by such Holder.
(c) Promptly after receipt by an indemnified party under this Section
1.10 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 1.10, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.10, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.10.
(d) If the indemnification provided for in this Section 1.10 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations; provided, that, in no event shall any contribution by a Holder
under this Subsection 1.10(d) exceed the net proceeds from the offering received
by such Holder, except in the case of willful fraud by such Holder. The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
-9-
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.
(f) The obligations of the Company and Holders under this Section 1.10
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.11 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to making
---------------------------------------------
available to the Holders the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration or pursuant to
a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after ninety (90) days
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public so long as the
Company remains subject to the periodic reporting requirements under Sections 13
or 15(d) of the Exchange Act;
(b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the Exchange Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as practicable after the end of the fiscal year in
which the first registration statement filed by the Company for the offering of
its securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the Exchange Act; and
(d) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144 (at any time
after ninety (90) days after the effective date of the first registration
statement filed by the Company), the Act and the Exchange Act (at any time after
it has become subject to such reporting requirements), or that it qualifies as a
registrant whose securities may be resold pursuant to Form S-3 (at any time
after it so qualifies), (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
-10-
1.12 FORM S-3 REGISTRATION. In case the Company shall receive from any
---------------------
Holder or Holders of not less than twenty five percent (25%) of the Registrable
Securities, or any Holder or Holders of not less than twenty five percent (25%)
of the Registrable Securities referred to in either Section 1.1(b)(i) or Section
1.1(b)(ii), in each case then outstanding a written request or requests that the
Company effect a registration on Form S-3 and any related qualification or
compliance with respect to all or a part of the Registrable Securities owned by
such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed registration, and any
related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within 15
days after receipt of such written notice from the Company; provided, however,
that the Company shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this Section 1.12: (1) if Form S-3 is
not available for such offering by the Holders; (2) if the Holders, together
with the holders of any other securities of the Company entitled to inclusion in
such registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $1,000,000; (3) if the
Company shall furnish to the Holders a certificate signed by the President of
the Company stating that in the good faith judgment of the Board of Directors of
the Company, it would be seriously detrimental to the Company and its
stockholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than 120 days after receipt of
the request of the Holder or Holders under this Section 1.12; provided, however,
that the Company shall not utilize this right more than once in any twelve month
period; (4) if the Company has, within the twelve (12) month period preceding
the date of such request, already effected two registrations on Form S-3 for the
Holders pursuant to this Section 1.12; or (5) in any particular jurisdiction in
which the Company would be required to qualify to do business or to execute a
general consent to service of process in effecting such registration,
qualification or compliance.
(c) Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Holders. All expenses incurred in connection with such registrations,
including (without limitation) all registration, filing, qualification,
printers' and accounting fees and the reasonable fees and disbursements of
counsel for the selling Holder or Holders and counsel for the Company, but
excluding any underwriters' discounts or commissions associated with Registrable
Securities (the "S-3 Expenses"), shall be borne by the Company for two such
------------
registrations pursuant to this Section 1.12. Thereafter, the S-3 Expenses shall
be borne pro
-11-
rata by the Holder or Holders participating in the Form S-3 Registration.
Registrations effected pursuant to this Section 1.12 shall not be counted as
demands for registration or registrations effected pursuant to Sections 1.2 or
1.3, respectively.
1.13 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
---------------------------------
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of at least 1,000,000 shares of such securities (as adjusted for stock
splits and dividends), provided the Company is, within a reasonable time after
such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Act. For the purposes of determining the number of shares
of Registrable Securities held by a transferee or assignee, the holdings of
transferees and assignees of a partnership who are partners or retired partners
of such partnership (including spouses and ancestors, lineal descendants and
siblings of such partners or spouses who acquire Registrable Securities by gift,
will or intestate succession) shall be aggregated together and with the
partnership; provided that all assignees and transferees who would not qualify
individually for assignment of registration rights shall have a single attorney-
in-fact for the purpose of exercising any rights, receiving notices or taking
any action under Section 1.
1.14 "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees that,
----------------------------
during the period of duration (up to, but not exceeding, 180 days) specified by
the Company and an underwriter of Common Stock or other securities of the
Company, following the date of the final prospectus distributed in connection
with a registration statement of the Company filed under the Act, it shall not,
to the extent requested by the Company and such underwriter, directly or
indirectly sell, offer to sell, contract to sell (including, without limitation,
any short sale), grant any option to purchase or otherwise transfer or dispose
of (other than to donees who agree to be similarly bound) any securities of the
Company held by it at any time during such period except Common Stock included
in such registration; provided, however, that:
(a) such agreement shall be applicable only during the two-year
period following the date of the final prospectus distributed pursuant to the
first such registration statement of the Company which covers Common Stock (or
other securities) to be sold on its behalf to the public in an underwritten
offering; and
(b) such agreement shall only be applicable if all officers and
directors of the Company, all one-percent securityholders, and all other persons
with registration rights (whether or not pursuant to this Agreement) enter into
similar agreements.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of
-12-
such period, and each Holder agrees that, if so requested, such Holder will
execute an agreement in the form provided by the underwriter containing terms
which are essentially consistent with the provisions of this Section 1.14.
Notwithstanding the foregoing, the obligations described in this
Section 1.14 shall not apply to a registration relating solely to employee
benefit plans on Form S-1 or Form S-8 or similar forms which may be promulgated
in the future, or a registration relating solely to an SEC Rule 145 transaction
on Form S-4 or similar forms which may be promulgated in the future.
1.15 TERMINATION OF REGISTRATION RIGHTS. No Holder shall be entitled
----------------------------------
to exercise any right provided for in this Section 1 after the earlier of (i)
three (3) years following the consummation of the sale of securities pursuant to
a registration statement filed by the Company under the Act in connection with
the initial firm commitment underwritten offering of its securities to the
general public, or (ii) such time as Rule 144 or another similar exemption under
the Act is available for the sale of all of such Holder's shares during a three
(3)-month period without registration.
COVENANTS OF THE COMPANY.
------------------------
2.1 DELIVERY OF FINANCIAL STATEMENTS. The Company shall deliver to
--------------------------------
each Investor holding, and to transferees of, at least 1,000,000 shares of
Registrable Securities (as determined pursuant to Section 1.13):
(a) as soon as practicable, but in any event within ninety (90)
days after the end of each fiscal year of the Company commencing with fiscal
1997, an income statement for such fiscal year, a balance sheet of the Company
and statement of stockholder's equity as of the end of such year, and a
statement of cash flows for such year, such year-end financial reports to be in
reasonable detail, prepared in accordance with generally accepted accounting
principles ("GAAP"), and audited and certified by an independent public
accounting firm of nationally recognized standing selected by the Company;
(b) as soon as practicable, but in any event within thirty (30)
days after the end of each of the first three (3) quarters of each fiscal year
of the Company, an unaudited profit or loss statement, a statement of cash flows
for such fiscal quarter and an unaudited balance sheet as of the end of such
fiscal quarter; and
(c) within thirty (30) days of the end of each month, an
unaudited income statement and a statement of cash flows and balance sheet for
and as of the end of such month, in reasonable detail.
2.2 TERMINATION OF INFORMATION COVENANTS. The covenants set forth
------------------------------------
in Section 2.1 shall terminate as to Investor and be of no further force or
effect when the sale of securities pursuant to a registration statement filed by
the Company under the Act
-13-
in connection with the firm commitment underwritten offering of its securities
to the general public is consummated or when the Company first becomes subject
to the periodic reporting requirements of Sections 13 or 15(d) of the Exchange
Act, whichever event shall first occur.
2.3 RIGHT OF FIRST OFFER. Subject to the terms and conditions
--------------------
specified in this Section 2.3, the Company hereby grants to each Major Investor
(as hereinafter defined) a right of first offer with respect to future sales by
the Company of its Shares (as hereinafter defined). For purposes of this
Section 2.3, a "Major Investor" shall mean any person who holds at least 15 % of
--------------
the Series A Preferred Stock or Series B Preferred Stock (or the Common Stock
issued upon conversion thereof) issued, or issuable upon the exercise of options
to purchase Preferred Stock outstanding, as of the date hereof. For purposes
of this Section 2.3, Major Investor includes any general partners and affiliates
of a Major Investor. A Major Investor who chooses to exercise the right of
first offer may designate as purchasers under such right itself or its partners
or affiliates in such proportions as it deems appropriate.
Each time the Company proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock ("Shares"), the Company shall first make an offering of such Shares to
each Major Investor in accordance with the following provisions:
(a) The Company shall deliver a notice by certified mail
("Notice") to the Major Investor stating (i) its bona fide intention to offer
such Shares, (ii) the number of such Shares to be offered, and (iii) the price
and terms, if any, upon which it proposes to offer such Shares.
(b) Within 15 calendar days after delivery of the Notice, the
Major Investor may elect to purchase or obtain for cash, at the price and on the
terms specified in the Notice, up to that portion of such Shares which equals
the proportion that the number of shares of Common Stock issued and held, or
issuable upon conversion and exercise of all convertible or exercisable
securities then held, by such Major Investor bears to the total number of shares
of Common Stock then outstanding (assuming full conversion and exercise of all
convertible or exercisable securities).
(c) The Company may, during the 90-day period following the
Notice, offer that portion of the Shares that are not subject to purchase
pursuant to this Section 2.3 to any person or persons at a price not less than,
and upon terms no more favorable to the offeree than those specified in the
Notice; provided, however, that if the consideration proposed to be received
from any such person is other than cash, the cash value of such consideration
shall be determined by the Board of Directors of the Company in good faith. If
the Company does not enter into an agreement for the sale of the Shares within
such period, or if such agreement is not consummated within 60 days of the
execution thereof, the right provided hereunder shall be deemed to be revived
and such Shares shall not be offered unless first reoffered to the Major
Investor in accordance herewith.
-14-
(d) The provisions of this Section 2.3 shall not be applicable
(i) to the issuance or sale of up to 10,000,000 shares (or such greater number
as is unanimously approved by the Board of Directors) of Common Stock (or
options therefor) to employees, consultants and directors, pursuant to plans or
agreements approved by the Board of Directors for the primary purpose of
soliciting or retaining their services, or (ii) to or after consummation of a
bona fide, firmly underwritten public offering of shares of Common Stock,
registered under the Act pursuant to a registration statement on Form S-l or
(iii) to the issuance of securities pursuant to the conversion or exercise of
convertible or exercisable securities, or (iv) to the issuance of securities in
connection with a bona fide business acquisition of or by the Company, whether
by merger, consolidation, sale of assets, sale or exchange of stock or
otherwise, with respect to which the Company determines that providing the
rights under this Section 2.3 would adversely impact the pooling of interests
accounting treatment of such transaction or the tax treatment of such
transaction or which would materially adversely impact the transaction as
contemplated by the Company, or (v) to the issuance of securities to financial
institutions or lessors in connection with commercial credit arrangements,
equipment financings, or similar transactions (each transaction referred to in
this paragraph is referred to as an "Excluded Transaction").
(e) The Company agrees that, at any time prior to March 4, 1998,
if Indus notifies the Company in good faith, within ten days after receipt of a
Notice, that it believes the transaction which is the subject of the Notice
would cause a write down in the value of Indus's investment in the Company as
reflected on the consolidated balance sheet of Indus, as the case may be, which
write down would be material to Indus, as the case may be, the Company will use
reasonable efforts to mitigate such write down. Such efforts may include without
limitation providing Indus with an antidilution adjustment on customary terms
based on a broad-based antidilution formula.
. MISCELLANEOUS.
-------------
3.1 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
----------------------
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any of the Series A Preferred Stock, Series B Preferred Stock or
any Common Stock issued upon conversion thereof). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
3.2 GOVERNING LAW. This Agreement and all acts and transactions
-------------
pursuant hereto shall be governed, construed and interpreted in accordance with
the laws of the State of California, without giving effect to principles of
conflicts of laws.
-15-
3.3 COUNTERPARTS. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.4 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.
3.5 NOTICES. Unless otherwise provided, any notice required or
-------
permitted by this Agreement shall be in writing and shall be deemed sufficient
upon delivery, when delivered personally or by overnight courier or sent by
telegram or fax, or forty-eight (48) hours after being deposited in the U.S.
mail, as certified or registered mail, with postage prepaid, and addressed to
the party to be notified at such party's address as set forth below or on
Exhibit A hereto or as subsequently modified by written notice.
---------
3.6 EXPENSES. If any action at law or in equity is necessary to
--------
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
3.7 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
----------------------
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Registrable Securities then outstanding, not including the
Founders' Stock; provided that if such amendment has the effect of affecting the
Founders' Stock (i) in a manner different than securities issued to the Investor
and (ii) in a manner adverse to the interests of the holders of the Founders'
Stock, then such amendment shall require the consent of the holder or holders of
a majority of the then outstanding Founders' Stock. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each holder of
any Registrable Securities then outstanding, each future holder of all such
Registrable Securities, and the Company. This Agreement supersedes in its
entirety the Existing Agreement.
3.8 SEVERABILITY. If one or more provisions of this Agreement
------------
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, then
(x) such provision shall be excluded from this Agreement, (y) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (z) the
balance of the Agreement shall be enforceable in accordance with its terms.
3.9 AGGREGATION OF STOCK. All shares of the Preferred Stock
--------------------
held or acquired by affiliated entities or persons shall be aggregated together
for the purpose of determining the availability of any rights under this
Agreement.
-16-
[Signature Page Follows]
-17-
The parties have executed this Investor's Rights Agreement as of the date
first above written.
COMPANY:
TENFOLD CORPORATION
By:
---------------------
Xxxx X. Xxxxxxx
President
Address: 000 Xxxx Xxxxxxxx Xxxx, Xxx 000
Xxxxxx, XX 00000
SIGNATURE PAGE TO
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
-18-
INVESTORS:
INDUS INTERNATIONAL, INC.
By:
---------------------
Name: Xxxxxx X. Xxxxxx
---------------------
Title: Chairman & CEO
--------------------
Address: 00 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
WINTER HARBOR, L.L.C.
By: First Media, L.P., Manager
By: First Media Corporation
its sole general partner
By:
-----------------------
Name: Xxxxx X. Xxxxx Xx.
Title: Secretary
Address: 00000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
SIGNATURE PAGE TO
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
-19-
FOUNDERS:
-------------------
Xxxx X. Xxxxxxx
Address: 0000 Xxxxx Xxxxxxxxxxxx Xxxxx
Xxxxx, XX 00000
---------------------
Xxxxxxx X. Xxxxxx
Address: 00 Xxxx Xxxx
Xxxx, XX 00000
SIGNATURE PAGE TO
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
-20-
FOUNDERS:
THE XXXXXX CHILDREN'S TRUST
By:
------------------------
Name:
Title: Trustee
Address: 00 Xxxx Xxxx
Xxxx, XX 00000
SIGNATURE PAGE TO
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
-21-
EXHIBIT A
---------
INVESTORS
---------
Name/Address NO. OF SHARES
-------------------------------------------------
Indus International, Inc. 2,920,799
Winter Harbor, L.L.C. 3,340,330
6,261,129
=========
-22-
AMENDMENT TO AMENDED AND RESTATED
----------------------------------
INVESTORS' RIGHTS AGREEMENT
---------------------------
This Amendment to Amended and Restated Investors' Rights Agreement (this
"Amendment") is made and entered into as of December 28, 1998 by and among
---------
TenFold Corporation, a Delaware corporation (the "Company"), Winter Harbor,
-------
L.L.C. ("Winter Harbor"), Indus International, Inc. ("Indus"), Provident
------------- -----
Companies, Inc. ("Provident"), and Unitrin Services Company ("Unitrin").
--------- -------
RECITALS
--------
A. Winter Harbor and Indus are stockholders of the Company, and the
Company, Winter Harbor, Indus and certain other stockholders of the Company are
parties to that certain Amended and Restated Investors' Rights Agreement dated
November 24, 1997 (the "Restated Agreement").
------------------
B. Concurrently herewith, Provident and Unitrin are each purchasing
200,000 shares of the Company's Common Stock (the "Shares").
------
C. The Company, Winter Harbor and Indus desire to amend the Restated
Agreement pursuant to Section 3.7 thereof so that Provident and Unitrin shall be
entitled to the rights set forth in Section 1.3 of the Restated Agreement with
respect to the Shares.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree that the Restated
Agreement is amended as follows:
1. AMENDMENT.
---------
1.1 REGISTRABLE SECURITIES. The first sentence of subsection (b) of
----------------------
Section 1.1 of the Restated Agreement is hereby amended and restated in its
entirety to read as follows:
"The term "Registrable Securities" means (i) the shares of Common Stock
----------------------
issuable or issued upon conversion of the Series A Preferred Stock (the
"Series A Stock"), (ii) the shares of Common Stock issuable or issued upon
---------------
conversion of the Series B Preferred Stock (the "Series B Stock" and with
--------------
the Series A Stock, collectively, the "Stock"), (iii) any other shares of
-----
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 Stock, (iv) the shares of Common Stock issued to the
Founders (the "Founders' Stock"), and (v) the shares of Common Stock issued
---------------
pursuant to that certain Common Stock Purchase Agreement dated December 28,
1998 between the Company and Provident Companies, Inc. and the shares of
Common Stock issued pursuant to that certain Common Stock Purchase
Agreement dated December 28, 1998 between the
-23-
Company and Unitrin Services Company, provided, however, that the term
-------- -------
Registrable Securities shall exclude in all cases (x) any Registrable
Securities sold by a person in a transaction in which his or her rights
under this Agreement are not assigned, and (y) the shares of Common Stock
referenced in clause (v) above for purposes of Sections 1.2, 1.12 and 2.1
hereof."
1.2 HOLDERS. Subsection (d) of Section 1.1 of the Restated Agreement is
-------
hereby amended and restated in its entirety to read as follows:
"The term "Holder" means any person owning or having the right to acquire
------
Registrable Securities or any assignee thereof in accordance with Section
1.13 hereof, provided, however, that for purposes of Section 1.2 and 1.12
-------- -------
hereof, Holder shall not include persons owning or having the right to
acquire Registrable Securities by virtue of clause (v) of subsection (b) of
this Section 1.1."
1.3 UNDERWRITING. The clause contained in Section 1.8 of the Restated
------------
Agreement which begins "provided however" and runs through the end of the
-------- -------
sentence is hereby amended and restated in its entirety to read as follows:
"provided however that in every underwriting pursuant to Section 1.3, the
-------- -------
Registrable Securities held by Holders referred to in Section 1.1(b)(i),
1.1(b)(ii) or 1.1(b)(v) shall not be reduced below 20% of the Registrable
Securities included in such underwriting."
2. ACKNOWLEDGMENT AND AGREEMENT. Provident and Unitrin each acknowledge and
----------------------------
agree that it shall be subject to the obligations and other provisions contained
in Sections 1 and 3 of the Restated Agreement, as amended, including, without
limitation, the "market stand-off agreement" contained in Section 1.14 of the
Restated Agreement, as amended, and the amendment and waiver provisions
contained in Section 3.7 of the Restated Agreement, as amended. The address of
each of Provident and Unitrin for purposes of notices given pursuant to Section
3.5 of the Restated Agreement, as amended, shall be as set forth on the
signature page hereto. The Company and each other party to this Amendment also
agree that the provisions of Section 1.3 of the Restated Agreement, as amended,
apply to a registration commenced pursuant to Section 1.2 or 1.12 of the
Restated Agreement, as amended, and that to the extent the provisions of
Sections 1.2 (b) and 1.8 conflict, the provisions of Section 1.2 (b) shall
govern.
3. GENERAL PROVISIONS.
------------------
3.1 GOVERNING LAW. This Amendment and all acts and transactions pursuant
-------------
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of California, without giving effect to principles of conflicts of
laws.
3.2 COUNTERPARTS. This Amendment may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-24-
3.3 UNUM CORPORATION. Each of the Company and each other party to this
----------------
Amendment hereby consents to Provident's business combination with Unum
Corporation and agrees that all of the rights and obligations of this Amendment
and the Restated Agreement that apply to Provident shall apply to the successor
entity to Provident as a result of such business combination.
[Signature Page Follows]
-25-
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
Amended and Restated Investors' Rights Agreement as of the date and year first
above written.
TENFOLD CORPORATION
By:
--------------------------------------
Xxxx X. Xxxxxxx, Chief Executive
Officer
WINTER HARBOR, L.L.C.
By: First Media, L.P., Manager
By: First Media Corporation
its sole general partner
By:
--------------------------------------
Xxxxx X. Xxxxx Xx., Secretary
INDUS INTERNATIONAL, INC.
By:
--------------------------------------
Xxxxxx X. Xxxxxx, Chairman and
Chief Executive Officer
PROVIDENT COMPANIES, INC.
By:
---------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------
Title: Sr. Vice President
--------------------------------------
Address:
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
UNITRIN SERVICES COMPANY
By:
---------------------------------------
Name: Xxxx X. Xxxxx
-------------------------------------
Title: Treasurer
-------------------------------------
Address:
Xxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
SECOND AMENDMENT TO AMENDED AND RESTATED
-----------------------------------------
INVESTORS' RIGHTS AGREEMENT
---------------------------
This Second Amendment to Amended and Restated Investors' Rights Agreement
(this "Amendment") is made and entered into as of December 29, 1998 by and among
---------
TenFold Corporation, a Delaware corporation (the "Company"), Winter Harbor,
-------
L.L.C. ("Winter Harbor"), Indus International, Inc. ("Indus") and Unitrin
------------- -----
Services Company ("Unitrin").
-------
RECITALS
--------
A. Winter Harbor, Indus and Unitrin are stockholders of the Company, and
the Company, Winter Harbor, Indus, Unitrin and certain other stockholders of
the Company are parties to that certain Amended and Restated Investors' Rights
Agreement dated November 24, 1997, as amended on december 28, 1998 (the
"Restated Agreement").
-------------------
C. The Company, Winter Harbor, Indus and Unitrin desire to amend the
Restated Agreement pursuant to Section 3.7 thereof on the terms set forth below.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree that the Restated
Agreement is amended as follows:
1. AMENDMENT.
---------
1.1 REGISTRABLE SECURITIES. The first sentence of subsection (b) of
----------------------
Section 1.1 of the Restated Agreement is hereby amended and restated in its
entirety to read as follows:
"The term "Registrable Securities" means (i) the shares of Common Stock
----------------------
issuable or issued upon conversion of the Series A Preferred Stock (the
"Series A Stock"), (ii) the shares of Common Stock issuable or issued upon
---------------
conversion of the Series B Preferred Stock (the "Series B Stock" and with
--------------
the Series A Stock, collectively, the "Stock"), (iii) any other shares of
-----
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 Stock, (iv) the shares of Common Stock issued to the
Founders (the "Founders' Stock"), and (v) the shares of Common Stock issued
---------------
pursuant to that certain Common Stock Purchase Agreement dated December 28,
1998 between the Company and Provident Companies, Inc. and the shares of
Common Stock issued pursuant to that certain Common Stock Purchase
Agreement dated December 28, 1998 between the Company and Unitrin Services
Company, provided, however, that the term Registrable Securities shall
-------- -------
exclude in all cases any Registrable Securities sold by a person in a
transaction in which his or her rights under this Agreement are not
assigned."
-2-
1.2 HOLDERS. Subsection (d) of Section 1.1 of the Restated Agreement is
-------
hereby amended and restated in its entirety to read as follows:
"The term "Holder" means any person owning or having the right to
------
acquire Registrable Securities or any assignee thereof in
accordance with Section 1.13 hereof, provided, however, that for
-------- -------
purposes of initiating a request for registration under Section
1.2 and under Section 1.12 hereof, Holder shall not include
persons owning or having the right to acquire Registrable
Securities by virtue of clause (v) of subsection (b) of this
Section 1.1, but such persons shall be considered a Holder for
all other purposes under Section 1.2 and 1.12."
2. AGREEMENT. The provisions of Sections 1.3 and 1.8 of the Restated
---------
Agreement, as amended, shall not apply to a registration commenced pursuant to
Section 1.2 or 1.12 of the Restated Agreement, as amended. All Holders of
Registrable Securities shall be subject to the provisions of Sections 1.2 and
1.12 of the Restated Agreement, as amended, on the terms contemplated by this
Amendment.
3. GENERAL PROVISIONS.
------------------
3.1 GOVERNING LAW. This Amendment and all acts and transactions pursuant
-------------
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of California, without giving effect to principles of conflicts of
laws.
3.2 COUNTERPARTS. This Amendment may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Signature Page Follows]
-3-
IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
to Amended and Restated Investors' Rights Agreement as of the date and year
first above written.
TENFOLD CORPORATION
By:
--------------------------------------
Xxxx X. Xxxxxxx, Chief Executive
Officer
WINTER HARBOR, L.L.C.
By: First Media, L.P., Manager
By: First Media Corporation
its sole general partner
By: /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx Xx., Secretary
INDUS INTERNATIONAL, INC.
By:
--------------------------------------
Xxxxxx X. Xxxxxx, Chairman and
Chief Executive Officer
UNITRIN SERVICES COMPANY
By:
--------------------------------------
Name: Xxxx X. Xxxxx
--------------------------------------
Title: Treasurer
--------------------------------------
Address:
Xxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
