EXHIBIT 2
IPRINT TECHNOLOGIES, INC.
THIRD AMENDED AND RESTATED RIGHTS AGREEMENT
THIS THIRD AMENDED AND RESTATED RIGHTS AGREEMENT is entered into as of
June 23, 2001, by and among iPrint Technologies, inc., a Delaware corporation
(the "Company"), the undersigned purchasers of Series A Preferred Stock, the
undersigned purchasers of Series B Preferred Stock and the undersigned
purchasers of Series C Preferred Stock of the Company (collectively, the "Prior
Purchasers"), Royal X. Xxxxxx (the "Common Holder") and Xxxxx Xxxx (the "New
Holder").
RECITALS:
A. The Prior Purchasers, the Common Holder and the Company are parties
to that certain Second Amended and Restated Rights Agreement dated September 30,
1999 among the Company and such Series A Purchasers, Series B Purchasers, Series
C Purchasers and the Common Holder (the "Prior Agreement").
B. Concurrently herewith, the Company and Wood Alliance, Inc. are
entering into an Agreement and Plan of Reorganization , dated as of the date
hereof (the "Reorganization Agreement"), pursuant to which the Company will, at
the closing of the transactions provided for therein (the "Merger"), issue
shares of its Common Stock to the holders of the outstanding shares of Wood
Alliance, Inc. in exchange for the issued and outstanding shares of Wood
Alliance, Inc.
C. The Prior Purchasers and the Common Holder, beneficially owning at
least a majority of the Company's outstanding shares held by all Prior
Purchasers and the Common Holder which are subject to the Prior Agreement, and
the Company, wish to amend the Prior Agreement to grant registration,
information, co-sale rights and other rights to the New Holder identical to the
registration, information, co-sale rights and other rights of the Common Holder,
with all such registration, information, co-sale rights and other rights not to
become effective until the consummation of the Merger (the "Effective Time" as
such term is used in the Reorganization Agreement).
D. At the Effective Time, the New Holder desires to become a party to
the Prior Agreement, as amended and restated hereby, on the same material terms
as the Common Holder.
E. By this Agreement, the Company, the Prior Purchasers, the Common
Holder and the New Holder desire to set forth certain registration and other
rights of the parties, as set forth below.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, the parties agree as follows:
1. REGISTRATION RIGHTS.
1.1 DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:
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(a) The terms "register," "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "Securities Act"),
and the declaration or ordering of the effectiveness of such registration
statement.
(b) The term "Conversion Shares" means the Common Stock issued
upon conversion of the Series A, Series A-1, Series B, Series B-1, Series C and
Series C-1 Preferred Stock issued and sold by the Company pursuant to the Series
A Preferred Stock Purchase Agreement dated October 17, 1997 among the Company
and the undersigned purchasers of Series A Preferred Stock (the "Series A
Agreement"), the Series B Preferred Stock Purchase Agreement dated February 25,
1999 among the Company and the undersigned purchasers of Series B Preferred
Stock (which shares of Series A, Series A-1, Series B and Series B-1 Preferred
Stock are referred to herein as the "Preferred Shares"), the Series C Preferred
Stock Purchase Agreement dated September 30, 1999, and securities issuable upon
exercise of Warrants issued to Intel Corporation and Silicon Valley Bank.
(c) The term "Registrable Securities" means (i) the Conversion
Shares and, for purposes of subsection 1.3 only, any and all shares of Common
Stock held by either the Common Holder or the New Holder then employed by the
Company; (ii) stock issued in lieu of the stock referred to in subsection (i)
above in any reorganization which has not been sold to the public; or (iii)
stock issued in respect of the stock referred to in subsections (i) and (ii)
above as a result of a stock split, stock dividend, recapitalization or the
like, which has not been sold to the public; provided, however, that for
purposes of subsections 1.2 and 1.4, the number of Registrable Securities deemed
to be held by the New Holder shall be the product of (a) the total number of
shares of the Common Stock of the Company beneficially owned by the New Holder
immediately following the Effective Time, multiplied by (b) the quotient of (x)
the total number of Conversion Shares beneficially owned by the Common Holder
immediately following the Effective Time, divided by (y) the total number of
shares of the Common Stock of the Company beneficially owned by the Common
Holder immediately following the Effective Time.
(d) The terms "Holder" or "Holders" means any person or persons to
whom Registrable Securities were originally issued or qualifying transferees
under subsection 1.10 hereof who hold Registrable Securities.
(e) The term "Initiating Holders" means any Holder or Holders of
40% or greater of the aggregate of the Registrable Securities then outstanding.
(f) The term "SEC" means the Securities and Exchange Commission.
(g) The term "Registration Expenses" shall mean all expenses
incurred by the Company in complying with subsections 1.2, 1.3 and 1.4 hereof,
including, without limitation, all registration, qualification and filing fees,
printing expenses, escrow fees, fees and disbursements of counsel for the
Company and counsel for the Holders, blue sky fees and expenses, and the expense
of any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company which shall be
paid in any event by the Company.)
(h) The term "Common Shares" shall mean all shares of Common Stock
of the Company owned or subsequently acquired by either the Common Holder or the
New Holder and all shares of Common Stock issuable upon exercise or conversion
of any derivative securities held or subsequently acquired by either the Common
Holder or the New Holder other than shares of Common
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Stock issued upon conversion of Preferred Stock and shares held by such persons
which are eligible for sale on a registration statement on Form S-8 or S-3.
1.2 DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION. If the Company shall receive
from the Initiating Holders a written request that the Company effect any
registration, qualification or compliance with respect to Registrable Securities
with an anticipated aggregate offering price before deduction of underwriting
discounts and commissions, in excess of $5,000,000, the Company will:
(i) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(ii) as soon as practicable, use its best efforts to
effect all such registrations, qualifications and compliances (including,
without limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualifications under the applicable blue sky or other
state securities laws and appropriate compliance with exemptive regulations
issued under the Securities Act and any other governmental requirements or
regulations) as may be so requested and as would permit or facilitate the sale
and distribution of all or such portion of such Initiating Holder's or
Initiating Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as are specified in a written request given
within thirty (30) days after receipt of such written notice from the Company;
provided that the Company shall not be obligated to take any action to effect
such registration, qualification or compliance pursuant to this subsection 1.2:
(A) in any particular jurisdiction in which the
Company would be required to execute a general qualification or compliance
unless the Company is already subject to service in such jurisdiction and except
as required by the Securities Act; or
(B) after the Company has effected two (2) such
registrations pursuant to this subsection 1.2(a) and such registrations have
been declared or ordered effective.
Subject to the foregoing clauses (A) and (B), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practical, but in any event within ninety (90) days, after
receipt of the request or requests of the Initiating Holders; provided, however,
that if the Company shall furnish to such holders a certificate signed by the
President of the Company stating that in the good faith judgment of the Board of
Directors it would be seriously detrimental to the Company and its shareholders
for such registration statement to be filed at the date filing would be required
and it is therefore essential to defer the filing of such registration
statement, the Company shall have an additional period of not more than ninety
(90) days after the expiration of the initial ninety (90) day period within
which to file such registration statement.
(b) UNDERWRITING. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as part of their request made
pursuant to subsection 1.2 and the Company shall include such information in the
written notice referred to in subsection 1.2(a)(i). In such event, the
underwriter shall be selected by a majority in interest of the Initiating
Holders and shall be reasonably acceptable to the Company. The right of any
Holder to registration pursuant to subsection 1.2 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable
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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. The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the underwriter or underwriters. Notwithstanding any
other provision of this subsection 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, the Initiating Holders shall so advise all
Holders, and the number of shares of Registrable Securities that may be included
in the registration and underwriting shall be allocated among all Holders
thereof in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities held by such Holders; 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. If any Holder of Registrable Securities disapproves of the terms
of the underwriting, such Holder may elect to withdraw therefrom by written
notice to the Company, the underwriter and the Initiating Holders. Any
Registrable Securities which are excluded from the underwriting by reason of the
underwriter's marketing limitation or withdrawn from such underwriting shall be
withdrawn from such registration.
(c) COMPANY SHARES. If the managing underwriter has not
limited the number of Registrable Securities to be underwritten, the Company may
include securities for its own account or for the account of others in such
registration if the managing underwriter so agrees and if the number of
Registrable Securities which would otherwise have been included in such
registration and underwriting will not thereby be limited.
1.3 COMPANY REGISTRATION.
(a) REGISTRATION. If at any time or from time to time, the
Company shall determine to register any of its securities, for its own account
or the account of any of its shareholders, other than a registration on S-8
relating solely to employee stock option or purchase plans, or a registration on
Form S-4 relating solely to an SEC Rule 145 transaction, or a registration on
any other form or any successor to such forms relating to such transactions,
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of Registrable
Securities, the Company will:
(i) promptly give to each Holder written notice
thereof and
(ii) include in such registration (and
compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request or requests, made within twenty (20)
days after receipt of such written notice from the Company, by any Holder or
Holders, except as set forth in subsection 1.3(b) below.
(b) UNDERWRITING. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to subsection 1.3(a)(i). In such event the right of any Holder to
registration pursuant to subsection 1.3 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other shareholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this
subsection 1.3, if the underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the underwriter may limit
the amount of securities to be included in
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the registration and underwriting by the Company's shareholders; provided
however, the number of Registrable Securities to be included in such
registration and underwriting under this subsection 1.3(b) shall not be reduced
to less than twenty-five percent (25%) of the aggregate securities included in
such registration without the prior consent of at least a majority of the
Holders who have requested their shares to be included in such registration and
underwriting; and provided, further, that the number of shares of Registrable
Securities, other than the Common Shares, to be included in such underwriting
shall not be reduced until all other securities, including the Common Shares,
are first entirely excluded from the underwriting. The Company shall so advise
all Holders of Registrable Securities which would otherwise be registered and
underwritten pursuant hereto, and the number of shares of Registrable Securities
that may be included in the registration and underwriting shall be allocated
first, to the Company; second, among the Purchasers requesting registration in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by each of such Purchasers as of the date of the notice pursuant
to subsection 1.3(a)(i) above; and third, among the other Holders on a pro rata
basis. If any Holder disapproves of the terms of the any such underwriting, he
may elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
(c) REGISTRATION RIGHTS OF OFFICERS AND DIRECTORS. Upon any
sale by the Company of its securities to the public in a firmly underwritten
public offering, the then existing officers and directors of the Company shall
be entitled to include any of their securities of the Company in any
registration by the Company under this subsection 1.3 provided that such
inclusion shall not diminish the number of securities included by the Company or
the number of Registrable Securities which may be included by the Holders as set
forth in subsection 1.3(b) above in the event that the underwriters determine
that marketing factors require a limitation on the number of shares included in
the registration and underwriting.
1.4 FORM S-3. In addition to the rights and obligations set forth in
subsection 1.2 above, if any Holder requests that the Company file a
registration statement on Form S-3 (or any successor to Form S-3) for a public
offering of shares of Registrable Securities, the reasonably anticipated
aggregate price to the public of which (net of underwriting discounts and
commissions) would exceed $1,000,000 and the Company is then a registrant
entitled to use Form S-3 to register the shares for such an offering, the
Company shall use its best efforts to cause such shares to be registered for the
offering as soon as practicable on Form S-3 (or any successor form to Form S-3);
provided, however the Company shall not be required to effect a registration
pursuant to this subsection 1.4:
(a) in any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(b) if the Company, within ten (10) days of the receipt of
the request of such Holder(s), gives notice of its bona fide intention to effect
the filing of a registration statement with the SEC within forty-five (45) days
of receipt of such request (other than with respect to a registration statement
relating to a Rule 145 transaction, an offering solely to employees or any other
registration which is not appropriate for the registration of Registrable
Securities);
(c) during a period of ninety (90) days following the
effective date of a registration statement;
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(d) if the Company shall furnish to such 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 detrimental
to the Company and its shareholders for such registration statement to be filed
on or before the date filing would be required and it is therefore essential to
defer the filing of such registration statement, in which case the Company shall
have the right to defer such filing for a period of not more than sixty (60)
days after the furnishing of such a certificate of deferral, provided that the
Company may not defer such filing pursuant to this subsection 1.4 more than once
in any twelve (12) month period.
In the event such Holders propose to offer the shares of Registrable
Securities pursuant to this subsection 1.4 by means of an underwriting, the
proposed underwriter(s) shall be selected by a majority in interest of the such
Holders and shall be reasonably acceptable to the Company, provided, however,
that in the event such underwriter(s) is (are) not reasonably acceptable to the
Company, the Company shall be required to furnish to the Holders, within twenty
(20) days of the receipt of the request for registration from Holders pursuant
to this subsection 1.4, the names of at least 2 underwriters acceptable to the
Company, who agree to act as underwriter for the proposed offering on terms no
less favorable to the Holders than those terms proposed in writing by the
underwriter(s) selected by the Holders. The Company shall give written notice to
all Holders of the receipt of a request for registration pursuant to this
subsection 1.4 and shall provide a reasonable opportunity for other Holders to
participate in the registration, provided that if the registration is for an
underwritten offering, the terms of subsection 1.2(b), including without
limitation the provisions relating to the exclusion of other securities prior to
any reduction of Registrable Securities in any Underwriting, shall apply to all
participants in such offering.
1.5 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Section 1 shall be borne by the Company except as follows:
(a) The Company shall not be required to pay for expenses
of any registration proceeding begun pursuant to subsection 1.2, the request for
which has been subsequently withdrawn by the Initiating Holders, and such
withdrawal is not the result of an adverse change in the condition or the
business of the Company, in which latter such case, such expenses shall be borne
pro rata by the Holders requesting such withdrawal.
(b) The Company shall only be required to pay up to a
maximum of $30,000 in fees and/or disbursements of legal counsels for the
Holders.
(c) The Company shall not be required to pay underwriters'
fees, discounts or commissions relating to Registrable Securities.
1.6 REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Rights
Agreement, the Company will keep each Holder participating therein advised in
writing as to the initiation of each registration, qualification and compliance
and as to the completion thereof. Except as otherwise provided in subsection
1.5, at its expense the Company will:
(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 year.
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(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 Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act with respect to the disposition of all
securities covered by such registration statement for a period set forth in
1.6(a).
(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) 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 Securities 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
statements therein not misleading in the light of the circumstances therein.
(f) 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.
1.7 INDEMNIFICATION.
(a) The Company will indemnify each Holder of Registrable
Securities and each of its officers, directors and partners, and each person
controlling such Holder, with respect to which such registration, qualification
or compliance has been effected pursuant to this Rights Agreement, and each
underwriter, if any, and each person who controls any underwriter of the
Registrable Securities held by or issuable to such Holder, against all claims,
losses, expenses, damages and liabilities (or actions in respect thereto)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in or incorporated by reference into any registration
statement, prospectus, offering circular, prospectus supplement, abbreviated
term sheet or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statement
therein not misleading, or any violation or alleged violation by the Company of
the Securities Act, the Securities Exchange Act of 1934, as amended, ("Exchange
Act"), the Trust Indenture Act of 1939, as amended, or any state securities law
applicable to the Company or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any such state law and relating to action or
inaction required of the Company in connection with any such registration,
qualification of compliance, and will reimburse each such Holder, each of its
officers, directors and partners, and each person controlling such Holder, each
such underwriter and each person who controls any such underwriter, within a
reasonable amount of time after incurred for any reasonable legal and any other
expenses incurred in connection with investigating, defending or settling any
such claim, loss, damage, liability
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or action; provided, however, that the indemnity agreement contained in this
subsection 1.7(a) shall not apply to amounts paid in settlement of any such
claim, loss, damage, liability, or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld);
and provided further, that the Company will not be liable in any such case to
the extent that any such claim, loss, damage or liability arises out of or is
based on any untrue statement or omission based upon written information
furnished to the Company by an instrument duly executed by such Holder
specifically for use therein. This obligation shall be in addition to all other
rights and remedies available to a Holder.
(b) Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company and each of its directors and officers, against all claims, losses,
expenses, damages and liabilities (or actions in respect thereof) (collectively
"Damages") arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in or incorporated by reference into any
such registration statement, prospectus, offering circular, prospectus
supplement or abbreviated term sheet or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Company, such
directors and officers, for any reasonable legal or any other expenses incurred
in connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, each underwriter, if any, of
the Company's securities covered by such a registration statement or prospectus
in reliance upon and in conformity with written information furnished to the
Company by the Holder in an instrument duly executed by such Holder specifically
for use therein; provided, however, that the indemnity agreement contained in
this subsection 1.7(b) shall not apply to amounts paid in settlement of any such
claim, loss, damage, liability or action if such settlement is effected without
the consent of the Holder (which consent shall not be unreasonably withheld);
and provided further, that the total amount for which any Holder shall be liable
under this subsection 1.7(b) shall not in any event exceed the lesser of the
aggregate proceeds received by such Holder from the sale of Registrable
Securities held by such Holder in such registration or its pro rata amount of
the Damages based on the number of securities sold by each such Holder. No
holder of Registrable Securities will be required to indemnify any person
against any liability arising from any untrue or misleading statement or
omission contained in any preliminary prospectus if such deficiency was
corrected in the final prospectus or for any liability which arises out of the
failure of any person to deliver a prospectus as required by the Securities Act.
(c) Each party entitled to indemnification under this
subsection 1.7 (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense; and provided further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations hereunder, unless such failure resulted in
prejudice to the Indemnifying Party; and provided further, 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 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. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving
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by the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
(d) If the indemnification provided for in this Section 1.7
is held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any losses, claims, damages or liabilities referred to
herein, the Indemnifying Party, in lieu of indemnifying such Indemnified Party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage or liability 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 violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by a court of law 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; provided, that in no event shall any contribution by a
Holder hereunder exceed the proceeds from the offering by such Holder.
(e) The obligations of the Company and Holders under this
Section 1.7 shall survive completion of any offering of Registrable Securities
and the termination of this Agreement. No Indemnifying Party, in the defense of
any such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.
(f) No Holder shall be obligated to enter into an
underwriting agreement that contains any provisions more onerous to such Holder
than the provisions in this Section 1.7 and such failure to enter into such
agreement shall not adversely affect such Holder's rights set forth herein.
1.8 INFORMATION BY HOLDER. Any Holder or Holders of Registrable
Securities included in any registration shall promptly furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
1.9 RULE 144 REPORTING. With a view to making available to
Holders the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, the Company agrees at all times to:
(a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144, after ninety (90) days after
the effective date of the first registration filed by the Company for an
offering of its securities to the general public;
(b) file with the SEC 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
(c) so long as a Holder owns any Registrable Securities, to
furnish to such Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144 and of the
Securities Act and the Exchange Act, a copy of the
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most recent annual or quarterly report of the Company, and such other reports
and documents so filed by the Company as the Holder may reasonably request in
complying with any rule or regulation of the SEC allowing the Holder to sell any
such securities without registration.
1.10 TRANSFER OF REGISTRATION RIGHTS. Holders' rights to cause
the Company to register their securities and keep information available, granted
to them by the Company under subsections 1.2, 1.3, 1.4 and 1.9, may be assigned
to a transferee or assignee of at least twenty percent (20%) of such Holder's
original number of Preferred Shares (and equivalent number of Common Shares) (as
adjusted for stock splits, stock dividends, recapitalization and like events),
provided, that the Company is given written notice by such Holder at the time of
or within a reasonable time after said transfer, stating the name and address of
said transferee or assignee and identifying the securities with respect to which
such registration rights are being assigned. The Company may reasonably prohibit
the transfer of any Holders' rights under this subsection 1.10 to any proposed
transferee or assignee who the Company reasonably believes is a competitor of
the Company. Notwithstanding anything else in this subsection 1.10, any Holder
may transfer rights to a transferee if such transferee is a partner, a retired
partner, affiliate or family member of such Holder.
1.11 LIMITATION ON REGISTRATION RIGHTS OF COMMON HOLDER AND NEW
HOLDER. Notwithstanding the registration rights granted to officers and
directors of the Company under subsection 1.3(c), during the period beginning on
the Closing Date (as such term is used in the Reorganization Agreement) and
ending six (6) months thereafter (the "Limitation Period"), the maximum number
of Registrable Securities which each of the Common Holder and the New Holder may
include in any registration pursuant to subsections 1.2, 1.3 or 1.4 shall be
limited to ten percent (10%) of the Registrable Securities beneficially owned by
such person immediately following the Effective Time. If during the Limitation
Period the Company effects more than one registration, neither the Common Holder
nor the New Holder may include more than that number of Registrable Securities
that, when added to the number of Registrable Securities included by such person
in any other registration effected by the Company during the Limitation Period,
would exceed ten percent (10%) of the Registrable Securities beneficially owned
by such person immediately following the Effective Time. Upon expiration of the
Limitation Period, the limitations imposed on the Common Holder and the New
Holder pursuant to this subsection 1.11 shall terminate and no longer have any
force or effect.
1.12 TERMINATION OF REGISTRATION RIGHTS. The obligations of the
Company pursuant to this Section 1 ("Registration Rights") shall terminate with
respect to any Holder on the earlier of (i) March 7, 2005 (five (5) years
following the effective date of the Company's initial registered underwritten
public offering(the "IPO")), or (ii) the date on which the Holder can sell all
of his/her/its remaining Registrable Securities under Rule 144 during any three
(3) month period.
2. AFFIRMATIVE COVENANTS OF THE COMPANY AND THE HOLDERS. The Company
hereby covenants and agrees as follows:
2.1 INFORMATION RIGHTS. Until March 7, 2003 (a period of three
(3) years following the IPO), so long as a Holder holds a number of Preferred
Shares and Conversion Shares which together equal at least ten percent (10%) of
the outstanding Preferred Shares and Conversion Shares (or in the case of Intel
Corporation ("Intel") any Preferred Shares or Conversion Shares) (each a
"Qualified Holder" and collectively the "Qualified Holders"), the Company shall
deliver to each Qualified Holder copies of the Company's 10-K's, 10-Q's, 8-K's
and Annual Reports to Shareholders promptly after such documents are filed with
the Securities and Exchange Commission.
10
2.2 CONFIDENTIALITY OF COMPANY INFORMATION. Each Qualified Holder
agrees that it will keep confidential and will not disclose or divulge any
confidential, proprietary or secret information which such Qualified Holder may
obtain from the Company, and which the Company has prominently marked
"confidential", "proprietary" or "secret" or has otherwise identified as being
such, pursuant to financial statements, reports and other materials submitted by
the Company as required hereunder, unless such information is or becomes known
to the Qualified Holder from a source other than the Company without violation
of any rights of the Company, or is or becomes publicly known, or unless the
Company gives its written consent to the Qualified Holder's release of such
information, except that no such written consent shall be required (and the
Qualified Holder shall be free to release such information to such recipient) if
such information is to be provided to a Qualified Holder's counsel or accountant
(and the provision of such information is directly necessary in order for such
recipient to provide services to Qualified Holder), or to an officer, director
or partner of a Qualified Holder, provided that the Qualified Holder shall
inform the recipient of the confidential nature of such information, and such
recipient agrees in writing in advance of disclosure to treat the information as
confidential.
2.3 ASSIGNMENT OF RIGHTS OF INFORMATION. The rights granted
pursuant to subsection 2.1 may be assigned by each Qualified Holder upon sale or
transfer by such Holder of a number of Preferred Shares and Conversion Shares
which together equal at least ten percent (10%) of the outstanding Preferred
Shares and Conversion Shares. Notwithstanding anything else in this subsection
2.3, rights may not be assigned to a transferee which the Company reasonably
believes is a competitor or intends to become a competitor of the Company and
provided further that any transferee shall agree to become subject to the
obligations of the transferring party hereunder.
2.4 KEY MAN INSURANCE. The Company has obtained and agrees to use
its best efforts to maintain a $2,000,000 renewable term life insurance policy
with a three year term (renewable at the request of the Board of Directors) for
Royal X. Xxxxxx naming the Company as sole beneficiary (the "Key Man Insurance
Policy").
2.5 FUTURE EMPLOYEE ISSUANCES AND AGREEMENTS. All future
issuances of securities of the Company to employees, officers and consultants
shall be made pursuant to stock grant, stock purchase and/or stock option plan
or any other stock incentive program, agreement or arrangement shall be approved
by the Board of Directors and shall provide for (i) ratable vesting over four
years, with no vesting until the end of the first year, and (ii) no transfer of
unvested shares. The Company will require that all current and future employees
of the Company enter into Employee Inventions and Proprietary Rights Assignment
and Confidentiality Agreements in substantially the form provided to the
Holders, with such amendments thereto or deviations therefrom as the Board of
Directors may from time to time approve.
2.6 CONFIDENTIALITY OF INVESTOR INFORMATION. Neither the Company
nor any Holder or Common Holder (other than Intel), without the prior written
consent of Intel, shall use Intel or its affiliates' names or refer to Intel or
its affiliates directly or indirectly in connection with Intel or its
affiliates' relationship with the Company in any advertisement, news release or
professional or trade publication, or in any other manner, unless required by
law. The parties agree that without the prior written consent of Intel, there
will be no press release or other public statement (an "Announcement") issued by
any party which refers directly or indirectly to Intel's participation as a
party to this Agreement or Intel's participation in the transactions
contemplated hereby. The parties further agree that, apart from an Announcement,
the parties will keep the terms and conditions of this Agreement, the Series A
Agreement, the Series B Agreement and the Series C Agreement and any other
agreements related to or entered into in connection with these agreements
(collectively, the "Financing Agreements") in strictest confidence. These
restrictions shall not prohibit disclosure to the parties' counsel, accountants
and
11
professional advisors. If any of the parties determines that it is required by
law to disclose the terms and conditions of any or all of the Financing
Agreements, or to file any or all of the Financing Agreements with the SEC, such
party or parties shall, a reasonable time before making any such disclosure or
filing, consult with Intel regarding such filing and seek confidential treatment
for such portions of those agreements as may be requested by Intel.
Notwithstanding the foregoing, the Company may disclose the existence of any or
all of the Financing Agreements to bona fide potential investors or its general
or limited partners or investors (in the case of a venture capital fund only)
who are under obligations of nondisclosure, similar to those contained herein
and which the Company believes in good faith are seriously considering investing
in the Company.
3. GENERAL.
3.1 WAIVERS AND AMENDMENTS. With the written consent of the
record or beneficial holders of at least a majority of the Registrable
Securities, the obligations of the Company and the rights of the parties under
this agreement may be waived (either generally or in a particular instance,
either retroactively or prospectively, and either for a specified period of time
or indefinitely), and with the same consent the Company, when authorized by
resolution of its Board of Directors, may enter into a supplementary agreement
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement; provided, however, that no
such modification, amendment or waiver shall reduce the aforesaid percentage of
Registrable Securities without the consent of all of the Holders of the
Registrable Securities. Upon the effectuation of each such waiver, consent,
agreement of amendment or modification, the Company shall promptly give written
notice thereof to the record holders of the Registrable Securities who have not
previously consented thereto in writing. This Agreement or any provision hereof
may be changed, waived, discharged or terminated only by a statement in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, except to the extent provided in this subsection 3.1.
3.2 GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California.
3.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.
3.4 ENTIRE AGREEMENT. Except as set forth below, this Agreement
and the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof, and this Agreement shall supersede and cancel all prior
agreements between the parties hereto with regard to the subject matter hereof.
3.5 REMEDIES. The rights of the parties under this Agreement are
unique and, accordingly, the parties intend that in addition to all other legal
or equitable remedies available, injunctive relief and the remedy of specific
performance may be utilized in the event of the breach or threatened breach of
this Agreement.
3.6 NOTICES, ETC. All notices and other communications required
or permitted hereunder shall be in writing and shall be delivered by overnight
courier service of mailed by first class mail, postage prepaid, certified or
registered mail, return receipt requested, addressed (a) if to any Purchaser, at
such party's address as set forth in the Company's records, or at such other
address as such party shall have furnished to the Company in writing, or (b) if
to the Company, at 000 Xxxxxxxxxxxx Xxxxx,
00
Xxxxx Xxxx, Xxxxxxxxxx 00000, or at such other address as the Company shall have
furnished to the Purchaser in writing.
3.7 SEVERABILITY. In case any provision of this Agreement shall
be invalid, illegal, or unenforceable, the validity, legality and enforceability
of the remaining provisions of this Agreement or any provision of the other
Agreements shall not in any way be affected or impaired thereby.
3.8 TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
3.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
13
IN WITNESS WHEREOF, the parties hereby have executed this Rights
Agreement as of the date first above written.
"COMPANY"
iPrint Technologies, inc., a Delaware corporation
By:
----------------------------------------------
Royal X. Xxxxxx, President
14
In consideration of the execution and delivery of this Rights Agreement and the
transactions contemplated hereby, the undersigned hereby have executed this
Rights Agreement as of the date first above written.
"COMMON HOLDER"
-----------------------------------
Royal X. Xxxxxx
"NEW HOLDER"
-----------------------------------
Xxxxx Xxxx
15
PURCHASER'S COUNTERPART SIGNATURE PAGE
IPRINT TECHNOLOGIES, INC. THIRD AMENDED AND RESTATED RIGHTS AGREEMENT
CANAAN EQUITY, L.P.
------------------------------------------
By: Canaan Equity Partners L.L.C.
Name: Xxxxxx Xxxxx
Title: Member/Manager
XXXXXX XXXXX
------------------------------------------
Xxxxxx Xxxxx
DAWNTREADER FUND I LP
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
BAYVIEW INVESTORS, LTD.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
16
PURCHASER'S COUNTERPART SIGNATURE PAGE
IPRINT TECHNOLOGIES, INC. THIRD AMENDED AND RESTATED RIGHTS AGREEMENT
XXXXXX XXXXXXX XXXXXX AND XXXXXXXX XXXXXXXXX
XXXXXX, HUSBAND AND WIFE AS COMMUNITY
PROPERTY
--------------------------------------------
Xxxxxx Xxxxxxx Xxxxxx
--------------------------------------------
Xxxxxxxx Xxxxxxxxx Xxxxxx
XXXXXX XXXXXXX
--------------------------------------------
Xxxxxx Xxxxxxx
--------------------------------------------
XXXX X. XXXXXXXXX
--------------------------------------------
Xxxx X. Xxxxxxxxx
--------------------------------------------
XXXX HELZBERG
--------------------------------------------
Xxxx Helzberg
17
PURCHASER'S COUNTERPART SIGNATURE PAGE
IPRINT TECHNOLOGIES, INC. THIRD AMENDED AND RESTATED RIGHTS AGREEMENT
XXXXXXX AND XXXXX XXXXXXX
-----------------------------------------------
Xxxxxxx Xxxxxxx
-----------------------------------------------
Xxxxx Xxxxxxx
INFORMATION TECHNOLOGY VENTURES L.P., a
California limited partnership
By: ITV Management, LLC,
a California limited liability company
Title: General Partner
-----------------------------------------------
Name: Xxxx Xxxxxxx
Title: Principal Member
ITV AFFILIATES FUND, L.P.,
a California limited partnership
By: ITV Management, LLC,
a California limited liability company
Title: General Partner
-----------------------------------------------
Name: Xxxx Xxxxxxx
Title: Principal Member
18
PURCHASER'S COUNTERPART SIGNATURE PAGE
IPRINT TECHNOLOGIES, INC. THIRD AMENDED AND RESTATED RIGHTS AGREEMENT
GCWF INVESTMENT PARTNERS
By: Xxxx Xxxx Corporation, Managing Partner
By:
------------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and Chief Financial Officer
XXXXXX XXXXX AND XXXXX XXXXX TRUSTEES OF THE
CHASE 1991 REVOCABLE TRUST DATED 04/02/91
By:
------------------------------------------------
Xxxxxx Xxxxx
By:
------------------------------------------------
Xxxxx Xxxxx
ROYAL X. XXXXXX
---------------------------------------------------
Royal X. Xxxxxx
XXXXXXX X. XXXXX
---------------------------------------------------
Xxxxxxx X. Xxxxx
19
PURCHASER'S COUNTERPART SIGNATURE PAGE
IPRINT TECHNOLOGIES, INC. THIRD AMENDED AND RESTATED RIGHTS AGREEMENT
XXXXXXXXXX X. XXXXXX AND XXXXX X. XXXXX III
-----------------------------------------------
Xxxxxxxxxx X. Xxxxxx
-----------------------------------------------
Xxxxx X. Xxxxx III
(By Xxxxxxxxxx X. Xxxxxx, Attorney-in-Fact)
DELAWARE CHARTER GUARANTEE AND TRUST COMPANY
CUST FOR XXXXXX XXXXXX KRUBERG, MD SEP XXX
By:
--------------------------------------------
X. Xxxxxx Kruberg, M.D.
JO XXX XXXXX XXXXXX AND XXXXX X. XXXXXX, M.D.
COMM PROP
-----------------------------------------------
Jo Xxx Xxxxx Xxxxxx
-----------------------------------------------
Xxxxx X. Xxxxxx
INTEL CORPORATION
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
20
PURCHASER'S COUNTERPART SIGNATURE PAGE
IPRINT TECHNOLOGIES, INC. THIRD AMENDED AND RESTATED RIGHTS AGREEMENT
XX XXXXXX
-------------------------------------------
Xx Xxxxxx
SOFTBANK TECHNOLOGY
VENTURES V, L.P.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
21
PURCHASER'S COUNTERPART SIGNATURE PAGE
IPRINT TECHNOLOGIES, INC. THIRD AMENDED AND RESTATED RIGHTS AGREEMENT
AT&T VENTURE FUND II, LP
By: Venture Management, LLC,
its General Partner
By:
--------------------------------------------
Name: Xxxx Xxxxxxx
Title: Manager
SPECIAL PARTNERS FUND, LP
By: Venture Management III, LLC,
its General Partner
By:
--------------------------------------------
Name: Xxxx Xxxxxxx
Title: Manager
SPECIAL PARTNERS FUND INTERNATIONAL, LP
By: Venture Management III, LLC,
its Investment General Partner
By:
--------------------------------------------
Name: Xxxx Xxxxxxx
Title: Manager
22
