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EXHIBIT 4.11
ONEWORLD SYSTEMS, INC.
INVESTOR RIGHTS AGREEMENT
This Investor Rights Agreement (the "AGREEMENT") is made and entered
into as of March 3, 1999 by and among OneWorld Systems, Inc., a Delaware
corporation (the "COMPANY"), and the persons listed on Schedule A attached
hereto (the "INVESTORS").
RECITALS
WHEREAS, the Company desires for the Investors to purchase shares of the
Company's Common Stock and Series A Preferred Stock pursuant to a Unit Purchase
Agreement of even date herewith (the "PURCHASE AGREEMENT"); and
WHEREAS, as an inducement for the Investors to enter into the Purchase
Agreement, the Company and the Investors desire to enter into this Agreement.
1. RIGHTS OF INVESTORS.
The Company hereby grants to the Investors the registration rights
(collectively the "INVESTOR RIGHTS") contained herein. The Investors accept the
Investor Rights, as applicable, and agree to be bound by the obligations
contained herein.
2. REGISTRATION RIGHTS.
2.1 DEFINITIONS.
(a) Exchange Act. The term "EXCHANGE ACT" means the
Securities Exchange Act of 1934, as amended.
(b) Form S-1. The term "FORM S-1" means such form
under the Securities Act as is in effect on the date hereof or any successor
registration form under the Securities Act subsequently adopted by the SEC.
(c) Form S-3. The term "FORM S-3" means such form
under the Securities Act as is in effect on the date hereof or any successor
registration form under the Securities Act subsequently adopted by the SEC which
permits inclusion or incorporation of substantial information by reference to
other documents filed by the Company with the SEC.
(d) Holder. For purposes of this Section 2, the term
"HOLDER" means any person owning of record Registrable Securities that have not
been sold to the public or pursuant to
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Rule 144 promulgated under the Securities Act or any assignee of record of such
Registrable Securities to whom rights under this Section 2 have been duly
assigned in accordance with this Agreement (including Section 2.10 hereof).
(e) Initiating Holder. The term "INITIATING HOLDER"
shall mean any Holder or Holders who in the aggregate are Holders of not less
than a majority of the then outstanding Registrable Securities which have not
been sold to the public.
(f) Preferred Stock. The term "PREFERRED STOCK" shall mean
the Series A Preferred Stock of the Company.
(g) Registrable Securities. The term "REGISTRABLE
SECURITIES" means: (1) all shares of Series A Preferred Stock and Common Stock
issued and outstanding as of March 12, 2001, (2) all shares of Common Stock
issued or issuable pursuant to the conversion of Series A Preferred Stock, and
(3) any shares of the Common Stock of the Company or other securities issued in
connection with any stock split, stock dividend, recapitalization or similar
event relating to the foregoing; excluding in all cases, however, any
Registrable Securities sold by a person in a transaction in which rights under
this Section 2 are not assigned in accordance with this Agreement or any
Registrable Securities sold to the public or sold pursuant to Rule 144
promulgated under the Securities Act.
(h) Registration. The terms "REGISTER," "REGISTERED," and
"REGISTRATION" refer to a registration effected by preparing and filing a
registration statement on Form S-1 or Form S-3 in compliance with the Securities
Act, and the declaration or ordering of effectiveness of such registration
statement.
(i) Registration Expenses. "REGISTRATION EXPENSES" shall
mean all expenses incurred by the Company in complying with Section 2.2 hereof,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel and accountants for the Company,
fees and expenses of one counsel for all 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).
(j) SEC. The term "SEC" or "COMMISSION" means the
U.S. Securities and Exchange Commission.
(k) Selling Expenses. "SELLING EXPENSES" shall mean all
underwriting discounts and selling commissions applicable to the sale of
Registrable Securities.
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2.2 REQUESTED REGISTRATION.
(k) Request for Registration by Initiating Holders. If the
Company shall receive from Initiating Holders, at any time after the date sixty
(60) calendar days from the date hereof, a written request that the Company
effect any registration with respect to all or a part of that portion of the
Registrable Securities which consists of Common Stock, or alternately, at any
time after the date two (2) calendar years from the date hereof, a written
request that the Company effect any registration with respect to all or part of
that portion of the Registrable Securities which consists of Series A Preferred
Stock and/or Common Stock, the Company will:
(i) promptly give written notice of the
proposed registration, qualification or compliance to all other Holders of
Registrable Securities; and
(ii) as soon as practicable, use its best
efforts to effect such registration (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under the Securities
Act) as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such 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 of the same
class as those which are the subject of the request and are specified in a
written request received by the Company within 15 days after written notice from
the Company is given under Section 2.2(a)(i) above; provided, however, that the
Company shall not be obligated to effect, or take any action to effect, any such
registration pursuant to this Section 2.2(a):
(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 or applicable rules or regulations thereunder; or
(B) With respect to that portion of the
Registrable Securities which consists of shares of Common Stock, after the
Company has effected one such registration of shares of Common Stock pursuant to
Section 2.2 and such registration has been declared or ordered effective and the
sale of such Registrable Securities shall have closed; and with respect to that
portion of the Registrable Securities which consists of shares of Series A
Preferred Stock, after the Company has effected one such registration of shares
of Series A Preferred Stock pursuant to Section 2.2 and such registration has
been declared or ordered effective and the sale of such Registrable Securities
shall have closed.
The registration statement filed pursuant to the request of the
Initiating Holders may, subject to the provisions of Section 2.2(b) below,
include other securities of the Company which are held by officers or directors
of the Company, or which are held by persons who, by virtue of agreements with
the Company, are entitled to include their securities in any such registration,
but the Company and
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such other holders shall have no absolute right to include any of its securities
in any such registration.
(b) Underwriting; Request by Initiating Holders. 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 a part of their request made pursuant to Section 2.2(a) and the Company shall
include such information in the written notice referred to in Section 2.2(a). In
such event, the right of any Holder to include such Holder's 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 Section
2.4(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 and reasonably acceptable to the Company.
Notwithstanding any other provision of Section 2.2, if the underwriter advises
the Company and the Initiating Holders in writing that marketing factors require
a limitation of the number of shares to be underwritten, then the Company 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 such proportion (as nearly as
practicable) among the Holders pro rata based on the amount of Registrable
Securities owned by each Holder.
(c) Notwithstanding the foregoing, if the Company
shall furnish to the Holders requesting the filing of a registration statement
pursuant to Section 2.2(a), a certificate signed by the President or Chief
Executive Officer of the Company stating that a delay in the filing of the
registration statement is necessary because in the reasonable judgment of the
Company, it would not be in the best interest of the Company and its
stockholders for such registration statement to be filed. In no event shall such
delay exceed thirty (30) calendar days with respect to any single exercise of
the Company's rights hereunder, and provided further, however, that in no event
shall Company be permitted to exercise this right more than three times or for
more than an aggregate of sixty (60) calendar days in any single calendar year.
In addition, the Company agrees to use its reasonable best efforts to resolve
whatever condition or conditions have occasioned any such delay on its part, and
will promptly end such delay upon resolution of such condition or conditions.
(d) Notwithstanding the foregoing, in the event that
the Company shall prepare and file with the SEC a registration statement
covering securities to be distributed on its own behalf (including, but not
limited to, registration statements relating to secondary offerings of
securities of the Company, but excluding any registration statement relating to
any employee benefit plan or a corporate reorganization, a "Company
Registration"), and such registration statement shall become effective, then
during the period of effectiveness of such Company Registration, the Company
shall have no obligation to prepare, file, or keep effective any registration
statement with respect to Registrable Securities of the Holders; however, such
obligations of the Company with
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respect to the Holders as are contained elsewhere in this Section 2 shall arise
again immediately upon the end of the effectiveness of any Company Registration,
and if necessary, at such time the Company shall prepare, file and keep
effective a registration statement with respect to any Registrable Securities of
the Holders for which a previously effective registration statement was
preempted by a Company Registration.
(e) In the event that because of a planned Company
Registration, pursuant to Section 2.2(d) the Company will fail to maintain the
effectiveness of an effective registration statement previously filed with the
SEC to register Registrable Securities of the Holders pursuant to a request by
the Initiating Holders under this Section 2.2, the Company shall notify all
Holders in writing at least 30 days prior to such Company Registration, and will
afford each such Holder an opportunity to include in such Company Registration
all or any part of the Registrable Securities then held by such Holder. Each
Holder desiring to include in any such Company Registration all or any part of
the Registrable Securities held by such Holder shall, within 15 days after
receipt of the above-described notice from the Company, so notify the Company in
writing, and in such notice shall inform the Company of the number of
Registrable Securities such Holder wishes to include in such Company
Registration. If a Company Registration as which the Company gives notice under
this Section 2.2(e) is for an underwritten offering, then the Company shall so
advise the Holders. In such event, the right of any such Holder's Registrable
Securities to be included in the Company Registration 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 Registrable Securities through
such underwriting shall enter into an underwriting agreement in customary form
with the managing underwriter or underwriter(s) selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the managing
underwriter(s) determine(s) in good faith that marketing factors require a
limitation of the number of shares to be underwritten, then the managing
underwriter(s) may exclude shares (including Registrable Securities) from the
registration and the underwriting, and the number of shares that may be included
in the registration and the underwriting shall be allocated, first, to the
Company, and second, to each of the Holders of Registrable Securities requesting
inclusion of their Registrable Securities in such registration statement, to be
allocated among all Holders thereof pro rata based on the amount of Registrable
Securities of the Company owned by each Holder. Any Registrable Securities
excluded or withdrawn from such underwriting shall be excluded and withdrawn
from the Company Registration.
2.3 EXPENSES OF REGISTRATION. All Registration Expenses incurred
in connection with one demand registration (pursuant to Section 2.2) shall be
borne by the Company, and all Selling Expenses shall be borne by the Holders of
the securities so registered pro rata on the basis of the number of their shares
so registered.
2.4 OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities under this Agreement, the Company
shall, as expeditiously as reasonably possible:
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(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 keep such
registration statement effective until the distribution is completed, subject to
any termination or suspension of the Holders' registration rights as provided
elsewhere herein.
(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, and all amendments and supplements thereto,
and such other documents as they may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by them that are included in
such registration.
(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, however, 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,
unless the Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act or applicable rules or regulations
thereunder.
(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(s) 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 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 the
statements therein not misleading in the light of the circumstances then
existing and, following such notification, promptly deliver to each Holder
copies of all amendments or supplements referred to in paragraphs (b) and (c) of
this Section 2.4.
(g) Furnish, at the request of any Holder registering
Registrable Securities, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters, (i) an opinion, dated as of 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
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any, and if there are no underwriters, to the Holders requesting registration of
Registrable Securities; provided, however that the requesting Holder and the
Company shall each bear one half of the reasonable fees and expenses of counsel
in generating such opinion, and (ii) a "comfort" letter dated as of 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 and reasonably satisfactory to a
majority in interest of the Holders requesting registration, addressed to the
underwriters; provided, however that the requesting Holder and the Company shall
each bear one half of the reasonable fees and expenses of the Company's
independent certified public accountants in generating such letter.
2.5 FURNISH INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 2.2 that the
selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition of such securities as shall be required to timely effect the
registration of Registrable Securities.
2.6 DELAY OF REGISTRATION. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 2.
2.7 INDEMNIFICATION.
(a) For the purpose of this Section 2.7:
(i) the term "registration statement" shall
include any final prospectus, exhibit, supplement or amendment included in or
relating to the registration statement (or any of the securities offered
thereunder) referred to in Section 2.2 and
(ii) the term "untrue statement" shall include
any untrue statement or alleged untrue statement, or any omission or alleged
omission to state in the registration statement a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The Company agrees to indemnify and hold harmless
each Holder (or any partner, officer or director of such Holder, and any person
who controls such Holder within the meaning of the Securities Act or the
Exchange Act) from and against any losses, claims, damages or liabilities, joint
or several, to which such person may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon (i) any untrue
statement or alleged untrue statement of a material fact, or any omission to
state or alleged omission to state a material fact contained in the registration
statement, (ii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated thereunder in connection with the offering covered by the
registration statement, or (iii) any failure by the
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Company to fulfill any undertaking included in the registration statement, and
the Company will reimburse such person for any reasonable legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim, or preparing to defend any such action,
proceeding or claim, provided, however, that the Company shall not be liable in
any such case to the extent that such loss, claim, damage or liability arises
out of, or is based upon, an untrue statement or alleged untrue statement, or
any omission to state or alleged omission to state a material fact made in such
registration statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Holder specifically
for use in preparation of the registration statement or the failure of such
Holder to comply with its covenants and agreements contained in 2.8 hereof
respecting sale of the Registrable Securities or any statement or omission in
any Prospectus that is corrected in any subsequent Prospectus that was delivered
to the Holder prior to the pertinent sale or sales by the Holder.
(c) Each Holder agrees to indemnify and hold harmless
the Company (and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act, each officer of the Company who
signs the registration statement and each director of the Company) from and
against any losses, claims, damages or liabilities to which the Company (or any
such officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, (i) any failure to comply with the covenants and agreements
contained in Section 2.8 hereof respecting sale of the Registrable Securities,
or (ii) any untrue statement or alleged untrue statement of a material fact, or
any omission to state or alleged omission to state a material fact contained in
the registration statement if such untrue statement or alleged untrue statement,
or any omission to state or alleged omission to state a material fact was made
in reliance upon and in conformity with written information furnished by or on
behalf of such Holder the Investor specifically for use in preparation of the
registration statement, and such Holder will reimburse the Company (or such
officer, director or controlling person), as the case may be, for any legal or
other expenses reasonably incurred in connection with investigating, defending
or preparing to defend any such action, proceeding or claim; provided, however,
that the indemnity agreement contained in this Section 2.7(c) 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 such Holder, which consent
shall not be unreasonably withheld; provided, further, that in no event shall
the liability of any Holder under this Section 2.7 exceed the proceeds from the
offering actually received by such Holder.
(d) Promptly after receipt by any indemnified person
of a notice of a claim or the beginning of any action in respect of which
indemnity is to be sought against an indemnifying person pursuant to this
Section 2.7, such indemnified person shall notify the indemnifying person in
writing of such claim or of the commencement of such action, but the omission to
so notify the indemnifying party will not relieve it from any liability which it
may have to any indemnified party under this Section 2.7 (except to the extent
that such omission materially and adversely affects the indemnifying party's
ability to defend such action) or from any liability otherwise than under this
Section 7.3. Subject to the provisions hereinafter stated, in case any such
action shall be brought
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against an indemnified person, the indemnifying person shall be entitled to
participate therein, and, to the extent that it shall elect by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from such indemnified party, shall be entitled to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified person. After notice
from the indemnifying person to such indemnified person of its election to
assume the defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof, provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that unless an additional specific conflict of interest between two
indemnified parties otherwise requires, no indemnifying person shall be
responsible for the fees and expenses of more than one separate counsel
(together with appropriate local counsel) for all indemnified parties. In no
event shall any indemnifying person be liable in respect of any amounts paid in
settlement of any action unless the indemnifying person shall have approved the
terms of such settlement; provided that such consent shall not be unreasonably
withheld. No indemnifying person shall, without the prior written consent of the
indemnified person, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified person is or could have been a
party and indemnification could have been sought hereunder by such indemnified
person, unless such settlement includes an unconditional release of such
indemnified person from all liability on claims that are the subject matter of
such proceeding.
(e) If the indemnification provided for in this Section
2.7 is unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Holders on
the other in connection with the statements or omissions or other matters which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, in the case of an
untrue statement, whether the untrue statement relates to information supplied
by the Company on the one hand or Holder on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement. The Company and the Holders agree that it would not be
just and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Holder
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shall be required to contribute any amount in excess of the amount by which the
net amount received by such Holder from the sale of the Registrable Securities
to which such loss relates exceeds the amount of any damages which such Holder
has otherwise been required to pay by reason of such untrue statement. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Holders' obligations in
this subsection to contribute are several in proportion to their sales of
Registrable Securities to which such loss relates and not joint.
(f) The parties to this Agreement hereby acknowledge that
they are sophisticated business persons who were represented by counsel during
the negotiations regarding the provisions hereof including, without limitation,
the provisions of this Section 2.7, and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 2.7
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the registration statement as required by the Securities Act and the Exchange
Act. The parties are advised that federal or state public policy as interpreted
by the courts in certain jurisdictions may be contrary to certain of the
provisions of this Section 2.7, and the parties hereto hereby expressly waive
and relinquish any right or ability to assert such public policy as a defense to
a claim under this Section 2.7 and further agree not to attempt to assert any
such defense.
2.8 TRANSFER OF SHARES AFTER REGISTRATION.
(a) RESTRICTIONS ON TRANSFER. No Holder may make any sale
of any Restricted Shares except either (i) in accordance with the Registration
Statement, in which case Holder must comply with the requirement of delivering a
current prospectus, or (ii) in accordance with Rule 144. Such Restricted Shares
are not transferable on the books of the Company unless the certificate
submitted to the Company's transfer agent evidencing such Shares is accompanied
by a separate certificate executed by an officer of, or other person duly
authorized by, the Holder for purposes of establishing compliance with this
Agreement. Such certificate shall be in such form as shall be supplied by the
Company.
(b) NOTICE OF PROPOSED SALE; RIGHT OF COMPANY TO SUSPEND
USE OF REGISTRATION STATEMENT. If any Holder shall propose to sell any
Registrable Securities pursuant to the Registration Statement, it shall notify
Company of its intent to do so at least three (3) full business days prior to
such sale. Such notice shall be deemed to constitute a representation that any
information previously supplied by such Holder is accurate as of the date of
such notice. At any time within such three (3) business-day period, Company may
refuse to permit the Holder to resell any Registrable Securities pursuant to the
Registration Statement; provided, however, that the Company in each case shall
use its best reasonable efforts to respond as rapidly as possible; and provided,
however, that in order to exercise this right, Company must deliver a
certificate in writing to the Holder to the effect that a delay in such sale is
necessary because a sale pursuant to such Registration Statement in its
then-current form would not be in the best interests of Company and its
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shareholders. In no event shall such delay exceed thirty (30) calendar days with
respect to any single exercise of the Company's rights hereunder, and provided
further, however, that in no event shall Company be permitted to exercise this
right more than three times or for more than an aggregate of sixty (60) calendar
days in any single calendar year. In addition, the Company agrees to use its
reasonable best efforts to resolve whatever condition or conditions have
occasioned any such delay on its part, and will promptly end such delay upon
resolution of such condition or conditions.
2.9 RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Registrable Securities to the public without
registration, after such time as a public market exists for the Common Stock of
the Company, the Company agrees to:
(a) Make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act, at all
times after the effective date of the first registration under the Securities
Act filed by the Company for an offering of its securities to the general
public;
(b) Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(c) So long as a Holder owns any Registrable Securities,
to furnish to the Holder forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 and of
the Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration.
2.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights of a Holder
under this Section 2 may be assigned by any Holder in connection with any
transfer or assignment by a Holder of Registrable Securities provided that: (i)
such transfer may otherwise be effected in accordance with applicable securities
laws, (ii) such transfer is effected in compliance with the restrictions on
transfer contained in the Agreement and in any other agreement between the
Company and the Holder, (iii) such assignee or transferee either holds
subsequent to such transfer not less than one hundred thousand (100,000) shares
of Registrable Securities (treating the outstanding Series A Preferred Stock on
an as-converted basis) or is a subsidiary, wholly-owned entity, successor
entity, parent, member or stockholder of a Holder, and (iv) such other party
agrees in writing with the Company to be bound by all of the provisions of this
Section 2.
2.11 TERMINATION OF REGISTRATION RIGHTS. The registration rights
granted pursuant to Section 2 will terminate as to any Holder upon the earlier
to occur of (a) such time as a Holder can sell all of its remaining Registrable
Securities under Rule 144 of the Securities Act
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during any three (3)-month period, or (b) such time as all Registrable
Securities purchased by such Holder pursuant to the Purchase Agreement have been
sold.
3. LEGENDS.
Each Investor understands that the share certificates evidencing
any Registrable Securities shall be endorsed with the following legends (in
addition to any legends required under applicable state securities laws):
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."
(b) Any legend required to be place thereon by any other
applicable state securities laws.
4. MISCELLANEOUS.
4.1 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and permitted
transferees and permitted assigns of the parties.
4.2 GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of California as applied to contracts made and
to be performed entirely within that state between residents of that state.
4.3 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one instrument.
4.4 TITLES AND SUBTITLES. The titles of the paragraphs and
subparagraphs of this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.
4.5 STOCK SPLITS, ETC. All share numbers used in this Agreement
are subject to adjustment in the case of any stock split, reverse stock split,
combination or similar events.
4.6 NOTICES. Any notice required or permitted to be given to a
party pursuant to the provisions of this Agreement will be in writing and will
be effective and or (i) the date of delivery by facsimile, or (ii) the business
day after deposit with a nationally-recognized courier or overnight service,
including Express Mail, for United States deliveries or (iii) five (5) business
days
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after deposit in the United States mail by registered or certified mail for
United States deliveries. All notices not delivered personally or by facsimile
will be sent with postage and other charges prepaid and properly addressed to
the party to be notified at the address set forth below such party's signature
on this Agreement or at such other address as such party may designate by ten
(10) days advance written notice to the other parties hereto. All notices for
delivery outside the United States will be sent by facsimile, or by nationally
recognized courier or overnight service. Any notice given hereunder to more than
one person will be deemed to have been given, for purposes of counting time
periods hereunder, on the date given to the last party required to be given such
notice. Notices to the Company will be marked to the attention of the Chief
Financial Officer.
4.7 ATTORNEYS' FEES. 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.
4.8 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 party against whom
enforcement of such amendment or waiver is sought; provided, however that with
respect to any Investor, the consent of the holders of more than 50% of the
Registrable Securities shall be sufficient to bind any and all Investors; and
provided, further, that where the amendment or waiver affects a right or creates
an obligation that is specific to a party named herein (whether an individual,
trust, partnership or corporation), the amendment or waiver of such right or
creation of such obligation shall require the consent of such party.
4.9 SEVERABILITY. If any provision of this Agreement is held to
be unenforceable under applicable law, then such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision was so excluded and shall be enforceable in accordance with its
terms.
4.10 ENTIRE AGREEMENT. This Agreement, together with all Exhibits
hereto, constitute the full and entire understanding and agreement between the
parties with respect to the subject matter hereof and supersedes all prior
negotiations, correspondence, agreements, understandings, duties or obligations
among the parties with respect to the subject matter hereof.
4.11 FURTHER ASSURANCES. From and after the date of this
Agreement, upon the request of a party, the other parties shall execute and
deliver such instruments, documents or other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Investor
Rights Agreement as of the date first above written.
ONEWORLD SYSTEMS, INC.
By: /S/ Xxxx Xxxxxx
-------------------------------------
Title: President and CEO
----------------------------------
INVESTORS:
ACCESS TECHNOLOGY PARTNERS
BROKERS FUND, L.P.
By: H&Q VENTURE MANAGEMENT, L.L.C.
Its: General Partner
By: /S/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Its: Xxxxxx X. Xxxxxx Tax Director, Attorney-in-Fact
-----------------------------------------------
ACCESS TECHNOLOGY PARTNERS, L.P.
By: ACCESS TECHNOLOGY MANAGEMENT, L.L.C.
Its: General Partner
By: H&Q VENTURE MANAGEMENT, L.L.C.
Its: Managing Member
By: /S/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Its: Xxxxxx X. Xxxxxx Tax Director, Attorney-in-Fact
-----------------------------------------------
[SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT]
00
XXXXXXXXX & XXXXX XXXXXXXXXX
By: /S/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Its: Xxxxxx X. Xxxxxx Tax Director, Attorney-in-Fact
-----------------------------------------------
XXXXXXXXX & XXXXX EMPLOYEE VENTURE FUND, X.X. XX
By: H&Q VENTURE MANAGEMENT, L.L.C
Its: General Partner
By: /S/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Its: Xxxxxx X. Xxxxxx Tax Director, Attorney-in-Fact
-----------------------------------------------
XXXXXX X. CASE III
By: /S/ Xxxxxx X. Case III
----------------------
DELAWARE CHARTER GUARANTEE & TRUST
COMPANY, CUSTODIAN FOR XXXXXX X. CASE
By: /S/ Xxxxxx X. Case
--------------------
Name: Xxxxxx X. Case
--------------------
XXXXXXX X. CASE
By: /S/ Xxxxxxx X. Case
-----------------------
[SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT]
16
XXXXX XXXXXX
By: /S/ Xxxxx Xxxxxx
---------------------------------
XXXX XXXXXX
By: /S/ Xxxxx Xxx, Attorney-in-Fact
---------------------------------
[SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT]
17
INTEGRAL CAPITAL PARTNERS IV, L.P.
By: INTEGRAL CAPITAL MANAGEMENT IV, LLC
Its: General Partner
By: /S/ XXXXXX X. XXXXXXX
----------------------------------
Xxxxxx X. Xxxxxxx
A Manager
INTEGRAL CAPITAL PARTNERS IV MS SIDE FUND, L.P.
By: ICP MS MANAGEMENT, LLC
Its: General Partner
By: /s/ XXXXXX X. XXXXXXX
--------------------------------
Xxxxxx X. Xxxxxxx
A Manager
[SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT]
18
XXXXXXX FAMILY TRUST, APRIL 19, 1996
By: /s/ XXXXX XXXXXXX
-----------------------------------------
Its: Trustee
-----------------------------------------
[SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT]
