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EXHIBIT 4.2
INVESTORS AGREEMENT
Investors Agreement dated as of January 28, 1999 (this
"Agreement") by and among Sage Networks, Inc., a Delaware corporation (the
"Company"), and each of the individuals or entities signatory hereto (each a
"Stockholder" and together the "Stockholders").
W I T N E S S E T H :
WHEREAS, the Company is authorized to issue (i) a total of
2,647,658 shares of Series A Convertible Preferred Stock, par value $0.01 per
share ("Preferred Stock"), and (ii) a total of 35,000,000 shares of Common
Stock, par value $0.01 per share ("Common Stock"); and
WHEREAS, upon the consummation of the transactions
contemplated by the Securities Purchase Agreement dated as of January 28, 1999,
among the Company and the purchasers named therein (the "Purchase Agreement")
there will be 19,217,197 shares of Common Stock issued and outstanding and
2,647,658 shares of Preferred Stock issued and outstanding; and
WHEREAS, upon the consummation of the transactions
contemplated by the Purchase Agreement, the Stockholders will own the number of
shares of Common Stock and Preferred Stock as set forth opposite their
respective names on Schedule I hereto; and
WHEREAS, it is a condition to the consummation of the
transactions contemplated by the Purchase Agreement that the parties enter into
this Agreement.
NOW THEREFORE, in consideration of the mutual promises,
agreements and covenants set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending legally to be bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 Defined Terms. The following terms when used in this
Agreement, including its preamble and recitals, shall, except where the context
otherwise requires, have the following meanings, such meanings to be equally
applicable to the singular and plural forms thereof:
"Affiliate" shall mean, with respect to any Person, any person
that, directly or indirectly, controls, is controlled by or is under common
control with such Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management
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and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise.
"Common Stock Equivalents" shall mean the number of shares of
Common Stock issuable upon the exercise, exchange or conversion of any security.
"Encumbrance" means any security interest, pledge, mortgage,
lien, charge, adverse claim of ownership or use, or other encumbrance of any
kind.
"Equity Securities" shall mean any Common Stock, any
securities exercisable or exchangeable for or convertible into Common Stock and
any rights, options or warrants to acquire any of the foregoing.
"Expiration Date" shall mean the earliest of (a) the
consummation of the initial public offering of Common Stock by the Company, (b)
a Sale Transaction with respect to the Company and (c) the date on which
Purchasers (in the aggregate) no longer own at least 40% of the Preferred Stock
(or Common Stock issued on conversion thereof) purchased by the Purchasers
pursuant to the Purchase Agreement.
"Investor" shall mean each owner of Stock.
"Permitted Registration Rights" shall mean all demand and
piggyback registration rights granted under this Agreement.
"Permitted Transferee" shall have the meaning set forth in
Section 3.04 herein.
"Person" shall mean and include an individual, a corporation,
a limited liability company, an association, a partnership, a joint venture, a
trust or estate, a government or any department or agency thereof, or any other
entity or governmental body.
"Preferred Stock" shall mean the Company's Series A Preferred
Stock, $.01 par value, with the rights and preferences set forth in the
Certificate of Incorporation of the Company, as amended.
"Purchasers" shall mean the Purchasers named in the Purchase
Agreement, together with their successors and assigns permitted by the Purchase
Agreement.
"Registration Expenses" shall mean all expenses incident to
the Company's performance of or compliance with its obligations under Sections
4.01 and 4.02 hereof, including without limitation, all SEC, NASD and stock
exchange or NASDAQ registration and filing fees and expenses, fees and expenses
of compliance with applicable state securities or "blue sky" laws (including,
without limitation, reasonable fees and disbursements of counsel for the
underwriters in connection with "blue sky" qualifications of securities
registered in accordance with this Agreement), printing expenses, messenger and
delivery expenses, the fees and expenses incurred in connection with the listing
of the securities to be registered in an initial public offering on each
securities exchange or national market system on which such securities are to be
so listed
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and, following such initial public offering, the fees and expenses incurred in
connection with the listing of such securities to be registered on each
securities exchange or national market system on which such securities are
listed, fees and disbursements of counsel for the Company and all independent
certified public accountants retained by the Company (including the expenses of
any annual audit and "cold comfort" letters required by or incident to such
performance and compliance), all reasonable fees and expenses of one counsel to
the Stockholders in the case of a Piggyback Registration or one counsel for all
Stockholders in the case of the exercise of a Demand Registration Right, the
fees and disbursements of underwriters customarily paid by issuers or sellers of
securities (including the fees and expenses of any "qualified independent
underwriter" required by the NASD), the reasonable fees and expenses of any
special experts retained by the Company in connection with such registration,
fees and expenses of other Persons retained by the Company in connection with
such registration, all transfer taxes with respect to the shares of Common Stock
sold by a Stockholder and all other expenses incurred by Stockholders customary
for and incidental to the sale and delivery of the shares of Common Stock to be
sold by such Stockholders (but not including any underwriting discounts or
commission, if any, attributable to the sale of Common Stock by holders of such
Common Stock other than the Company).
"Sale Transaction" shall mean a sale of all or substantially
all of the assets of the Company, or a merger or consolidation of the Company
with or into any other entity (other than a merger or consolidation in which
shares of the Company's voting capital stock outstanding immediately before such
merger or consolidation are exchanged or converted into or constitute shares
which represent more than fifty percent (50%) of the surviving entity's voting
capital interests after such consolidation or merger) or a transaction or series
of related transactions in which a person or group of persons (as defined in
Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended), acquires
beneficial ownership (as determined in accordance with Rule 13d-3 of such Act)
of more than 50% of the voting power of the Company; provided, however, that any
reorganization, merger or consolidation involving (1) only a change in the state
of incorporation of the Company, (2) a merger of the Company with or into a
wholly-owned subsidiary of the Company that is incorporated in the United States
of America, or (3) an acquisition by merger, reorganization or consolidation, of
which the Company is substantively the surviving corporation and operates as a
going concern, of another entity formed or incorporated in the United States of
America that is engaged in a business similar or related to the business of the
Company and which does not involve a recapitalization or conversion of the
Preferred Stock shall not constitute a "Sale Transaction".
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Stock" shall mean the Common Stock and the Preferred Stock.
"WHO" shall mean WEB Hosting Organization L.L.C., a Delaware
limited liability company.
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ARTICLE II
VOTING AGREEMENT
2.01 Board of Directors of the Company. So long as the
Purchasers own at least 40% of the issued and outstanding Preferred Stock (or
Common Stock issued on conversion thereof) purchased by the Purchasers pursuant
to the Purchase Agreement, a majority in interest of the Purchasers shall have
the right to nominate one person for election as a director of the Company (the
"Purchasers Representative"). Initially, such person shall be Xxxxxxx X. Xxx. At
the option of the Purchasers Representative, the Board of Directors of the
Company will cause the Purchasers Representative to be a member of the
Compensation Committee and/or the Audit Committee of the Company.
2.02 Covenant to Vote. Each of the Stockholders shall appear
in person or by proxy at any annual or special meeting of stockholders for the
purpose of obtaining a quorum and shall vote or cause the vote of the shares of
Stock owned by such Stockholder or by any Affiliate of such Stockholder, either
in person or by proxy, at any annual or special meeting of stockholders of the
Company called for the purpose of voting on the election, if such director has
been nominated for election, or removal, if such director has been designated
for removal, of directors, or by consensual action of stockholders with respect
to such election or removal of directors, in favor of such election of the
directors nominated, or removal of the director designated, in accordance with
Section 2.01 and for the replacement of the director in accordance with Section
2.01. In addition, each of the Stockholders shall appear in person or by proxy
at any annual or special meeting of stockholders for the purpose of obtaining a
quorum and shall vote or cause the vote of the shares of Stock owned by such
Stockholder or any Affiliate of such Stockholder upon any matter submitted to a
vote of the stockholders of the Company in a manner so as to be consistent and
not in conflict with, and to implement, the terms of this Agreement. If the
Purchasers do not designate a director pursuant to Section 2.01, each of the
Stockholders shall appear in person or by proxy at any annual or special meeting
of stockholders for the purpose of obtaining a quorum and shall vote for or
cause the vote of the shares of Stock owned by such Stockholder or by any
Affiliate of such Stockholder, either in person or by proxy, at any annual or
special meeting of the stockholders of the Company for the purpose of voting on
the election, and vote for the re-election of the prior director designated by
the Purchasers failing to exercise their rights to designate a director pursuant
to Section 2.01.
2.03 Vacancies/Removals. The Purchasers Representative shall
be subject to removal by the Purchasers at any time, with or without cause. The
Purchasers shall have the right to call a special meeting of Stockholders at any
time, and from time to time, for the sole purpose of removing from the Board of
Directors of the Company, with or without cause, any person or persons nominated
by him for election as a director, and in such event, the Stockholders shall
vote all of their Stock in support of such removal and for the election of such
replacements as may be nominated by the Purchasers.
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2.04 No Voting or Conflicting Agreements. Each of the
Investors agrees that it will not and will not permit any Affiliate to grant any
proxy or enter into or agree to be bound by any voting trust with respect to its
shares of Stock or to enter into any stockholder agreements or arrangements of
any kind with any Person with respect to its shares of Stock in any such case in
a manner that is inconsistent with the provisions of this Agreement.
2.05 Actions Consistent with Agreement. The Company shall not
take any action inconsistent with the provisions of this Agreement.
2.06 Expiration of Rights. The rights granted pursuant to this
Article 2 shall expire and be of no further force and effect as of the date that
the Purchasers no longer own at least 40% of the issued and outstanding
Preferred Stock (or Common Stock issued on conversion thereof) purchased by the
Purchasers pursuant to the Purchase Agreement.
ARTICLE III
RESTRICTIONS ON TRANSFERS BY THE INVESTORS
3.01 Restrictions on Transfers Generally. Each Investor hereby
agrees that such Investor shall not, and shall not permit any Affiliate to,
directly or indirectly, transfer, sell or otherwise dispose of, or create, incur
or assume any Encumbrance with respect to any shares of Stock or Equity
Securities other than (i) pursuant to an effective registration statement under
the Securities Act or (ii) pursuant to an exemption from registration under the
Securities Act and any state securities or Blue Sky laws.
3.02 Tag Along Right. If WHO proposes to transfer shares of
Stock or Equity Securities to any Person or Persons (other than to an
Affiliate), WHO shall notify the Purchasers in writing (the "Tag Along Notice")
of such proposed transfer and its terms and conditions. Within fifteen (15) days
of receipt of a Tag Along Notice, each Purchaser shall notify WHO if it elects
to participate in such transfer ("Tag Along Right") and shall state the number
of shares of Stock or Equity Securities that the Purchaser desires to sell. Upon
electing to transfer, each Purchaser shall be obligated to sell, at the same
price and on the same terms as WHO, the number of shares stated in its notice to
WHO. Each Purchaser may elect to sell such number of shares of Stock and number
of Equity Securities as is equal to the number of shares of Stock and number of
Equity Securities to be transferred multiplied by a fraction, the numerator of
which shall be the aggregate number of shares of Stock and Equity Securities
held by such Purchaser (calculated on a fully diluted basis) and the denominator
of which shall be the aggregate number of shares of Stock and number of Equity
Securities held by all transferors (calculated on a fully diluted basis). Each
such Purchaser shall agree to enter into a purchase agreement in form and
substance approved by WHO to the extent such agreement shall contain customary
representations as to ownership of the shares to be purchased and the absence of
liens thereon. If the sale is not consummated within one hundred eighty (180)
days following the delivery of the Tag Along Notice, then each Purchaser shall
no longer be obligated to sell such Purchaser's shares of Stock and Equity
Securities pursuant to such Tag Along Right but shall remain subject to the
provisions of this Section 3.02 with respect to any subsequent proposed transfer
described
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in this Section 3.02. In the event that the proposed transferee does not
purchase all the shares of Stock and number of Equity Securities that the
Purchaser elects to sell pursuant to the foregoing on the same terms and
conditions as the securities purchased from WHO, then WHO shall not be permitted
to sell any securities to the proposed transferee. If no Tag Along Notice is
received by the end of the 15 days referred to above, WHO shall have the right
for a 180 day period thereafter to transfer the securities to the proposed
transferee on terms and conditions no more favorable to WHO than those stated in
the Tag Along Notice and in accordance with the provisions of this Section 3.02.
3.03 Drag Along Right.
(a) If at any time the Company or WHO (the "Proposing
Investor") proposes to transfer in a bona fide arm's length sale all or
substantially all of the assets or shares of capital stock of the Company or the
Stock and Equity Securities owned by WHO to any Person or Persons who are not
Affiliates of the Proposing Investor (the "Proposed Transferee"), the Proposing
Investor shall have the right (the "Drag Along Right"), subject to applicable
law and compliance with any other restrictions applicable to such transfer, to
require all Investors to sell, pursuant to Section 3.03(b), to the Proposed
Transferee, on the same terms and conditions as applicable to the Proposing
Investors except as limited in Section 3.03(b), all (but not less than all) of
the shares of such Stock and Equity Securities then held by such Investors.
(b) To exercise a Drag Along Right, the Proposing Investor
shall give each Investor (each, a "Drag-Along Investor"), at least fifteen (15)
days prior to the proposed transfer to the Proposed Transferee, a written notice
(the "Drag Along Notice") containing (a) the name and address of the Proposed
Transferee and (b) the proposed purchase price and the terms of payment and
other material terms and conditions of the Proposed Transferee's offer. Each
Drag-Along Investor shall thereafter be obligated to sell all of its shares of
Stock and Equity Securities to the Proposed Transferee. Each such Drag Along
Investor shall agree to enter into a purchase agreement in form and substance
approved by the Proposing Investors to the extent such agreement shall contain
customary representations from each Drag Along Investor as to ownership of the
shares to be purchased and the absence of liens thereon and customary
indemnification provisions solely with respect to such representations from the
Drag Along Investor. If the sale is not consummated within a period of one
hundred eighty (180) days following the date of the Drag Along Notice, then each
Drag Along Investor shall no longer be obligated to sell such Investor's shares
of Stock and Equity Securities pursuant to such Drag Along Right but shall
remain subject to the provisions of this Section 3.03 with respect to any
subsequent proposed transfer described in this Section 3.03. The Drag-Along
Investor shall not be required to participate in a proposed transfer pursuant to
the exercise of a Drag Along Right unless its liability for breaches of
representations and warranties made in connection with the sale thereunder is
limited to no more than the total sale price received by such Drag-Along
Investor in such sale.
3.04 Transfers to Affiliates; Other Transfers. The Purchasers
agree not to transfer or otherwise dispose of any shares of Preferred Stock or
Equity Securities of the Company or use any shares of Preferred Stock or Equity
Securities of the Company as collateral
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for the purposes of securing any indebtedness for borrowed money or otherwise;
provided, however, a Purchaser (a) shall transfer its shares of Stock or Equity
Securities as required by Section 3.03, (b) may transfer its shares of Stock and
Equity Securities (i) in accordance with Section 3.02, (ii) to an Affiliate of
such Purchaser that is an investment fund or similar entity and that, in the
reasonable judgement of the Company, is not a competitor of the Company, (iii)
by gift or bequest or through inheritance to, or for the benefit of, a spouse or
children or (iv) by will or the laws of descent and distribution (each
transferee referred to in (ii), (iii) or (iv), a "Permitted Transferee").
3.05 Transferees Subject to Agreement. In the event of any
transfer of shares of Stock or Equity Securities by the Stockholders pursuant to
this Agreement, the transferee shall hold such shares of Stock or Equity
Securities so acquired with all the rights conferred by, and subject to all of
the restrictions imposed by, this Agreement, except if such transferee acquires
such shares of Stock or Equity Securities pursuant to the Company's performance
of its obligation under Sections 4.01 and 4.02 hereof. Any transferee of any
shares of Stock or Equity Securities shall, as a condition of the consummation
of such transfer, agree to be subject to the terms of this Agreement.
3.06 Right of First Refusal.(a) If, at any time, any Purchaser
desires to sell, transfer or otherwise dispose of any shares of Stock or Equity
Securities than owned by such Purchaser (other than a transfer to a Permitted
Transferee or sales pursuant to an effective registration statement under the
Securities Act) to any third party pursuant to a bona fide offer, such selling
Purchaser (the "Seller") shall first give a written notice to the Company and
WHO (the "Seller's Notice") stating the Seller's desire to make such sale,
transfer or other disposition and the terms of the offer, including the identity
of the person making the offer (the "Bona Fide Purchaser"), the amount and kind
of securities proposed to be transferred and the purchase price offered to the
Seller by the Bona Fide Purchaser. The Seller's Notice shall constitute an
irrevocable offer by the Seller to sell to WHO or its Members (the "Eligible
Investors") and the Company such securities at the price and on the terms
offered by the Bona Fide Purchaser.
(i) Within 10 business days after the receipt by WHO and the
Company of the Seller's Notice, the Company may elect to purchase such
securities at the price and on the terms offered by the Bona Fide
Purchaser in cash under this Section 3.06(a) by giving notice to the
Seller, with copies to WHO and the Eligible Investors as to the number,
if any, of such securities it is electing to purchase (the "Company
Notice"). The election to purchase such securities shall be made on
behalf of the Company by those members of the Board of Directors of the
Company not affiliated or associated with the Seller. The Company
Notice shall be deemed to be an irrevocable commitment to purchase from
the Seller in cash at the price and on the terms offered by the Bona
Fide Purchaser the number of such securities that the Company specifies
in the Company Notice. If the Company elects to purchase any of such
securities, the Company shall have 20 business days from the date the
Company Notice has been sent to fund such purchase.
(ii) If the Company does not elect to purchase all of such
securities, WHO may elect (within 5 business days after the receipt by
WHO of the Company Notice) to
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purchase such securities at the price and on the terms offered by the
Bona Fide Purchase in cash under this Section 3.06(a) by giving a
notice to the Seller, with copies to the Company and the Eligible
Investors, as to the number of such securities, if any, it is electing
to purchase (the "WHO Notice"). The WHO Notice shall be deemed to be an
irrevocable commitment to purchase from the Seller in cash at the price
and on the terms offered by the Bona Fide Purchaser the number of such
securities that WHO has elected to purchase pursuant to the WHO Notice.
If WHO elects to purchase any of such securities, WHO shall have 20
business days from the date the WHO Notice has been sent to fund such
purchase.
(iii) If the Company and WHO do not elect to purchase all of
such securities, any Eligible Investor may elect (within 5 business
days after the date of receipt by the Eligible Investors of the WHO
Notice) to purchase such securities at the price and on the terms
offered by the Bona Fide Purchaser in cash under this Section 3.06(a)
by giving a notice to the Seller, with a copy to the Company and WHO as
to the number of such securities, if any, it is electing to purchase
(the "Eligible Investor Notice"). Each Eligible Investor that is given
an Eligible Investor Notice shall be allocated a portion of the
remaining securities pro rata based on its ownership interest in WHO.
The Eligible Investor Notice shall be deemed to be an irrevocable
commitment to purchase from the Seller in cash at the price and on the
terms offered by the Bona Fide Purchaser the number of such securities
that the Company specified in the Eligible Investor Notice. If an
Eligible Investor elects to purchase any of such securities, such
Eligible Investor shall have 20 business days from the date the
Eligible Investor Notice has been sent to fund such purchase.
(b) If the Company, WHO and the Eligible Investors fail to
elect to purchase such securities within the time periods specified in Section
3.06(a), then the Seller (i) shall be under no obligation to sell any of such
securities to WHO, the Company or any Eligible Investors, unless the Seller so
elects, and (ii) may, within a period of three months from the date of the
Seller's Notice, sell all (but not less than all) such securities to the Bona
Fide Purchaser in cash at a price per share not less than the price and on the
terms offered by the Bona Fide Investor; provided, however, that such Bona Fide
Purchaser shall, in accordance with the provisions of Section 3.05 hereof, agree
to execute and be bound by the terms of this Agreement to the same extent and in
the same manner as the Seller of such shares.
3.07 Restrictive Legends. Each share of Stock and Equity
Securities shall bear a legend in substantially the following form:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
neither the securities nor any interest therein may be
offered, sold, transferred, pledged or disposed of in the
absence of such registration or an exemption under such Act
and the rules and regulations thereunder. The securities
represented by this certificate are subject to, and are
transferable only upon compliance with, the provisions of the
Investors Agreement dated as of
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January 28, 1999 among Sage Networks, Inc. and certain of its
shareholders. A copy of the above-referenced agreement is on
file at the office of Sage Networks, Inc.
3.08 Expiration of Restrictions. The restrictions set forth in
Article 3 hereof shall expire and be of no further force and effect as of the
Expiration Date.
ARTICLE IV
REGISTRATION RIGHTS
4.01 Piggyback Registration.
(a) If the Company proposes (including in connection with any
demand registration by a Stockholder) to file any registration statement under
the Securities Act with respect to any Stock or Equity Security (other than
pursuant to a registration statement on Form S-4 or S-8 or any successor or
similar forms in connection with an exchange offer or any offering of securities
solely to the Company's then existing stockholders or employees of the Company
and its subsidiaries and other than in connection with the Company's initial
public offering), the Company shall give written notice of such proposed filing
to each Stockholder at least 30 days prior to such proposed filing. Such notice
shall offer to each Stockholder the opportunity to include in such registration
statement for resale by the Stockholders, such number of shares of Common Stock
each may request in a written notice to the Company (which notice shall specify
the number of shares to be disposed of by such holder and the intended method of
disposition thereof) within 20 days after the receipt of such notice from the
Company (a "Piggyback Registration"). The Company shall permit, or shall cause
the managing underwriter of any such proposed offering to permit, the shares of
Stock or Equity Securities requested to be included in the registration to be
included on the same terms and conditions as are applicable to the other Stock
or Equity Securities included in such registration statement. The Company or
such subsidiary, as applicable, shall not be required to maintain the
effectiveness of the registration statement beyond the earlier to occur of (i)
180 days after the effective date of the registration statement; and (ii)
consummation of the distribution by the Stockholders whose shares of Stock or
Equity Securities are included in such registration statement. If a Stockholder
includes shares of Stock or Equity Securities in a Piggyback Registration with
respect to any registration of (i) shares by the Company or (ii) shares held by
one or more of the Company's other stockholders, such Piggyback Registration
shall not be deemed to be the exercise of a Demand Registration Right by such
Stockholder.
(b) If the managing underwriter or underwriters, if any,
advise the Stockholders seeking to register shares of Stock or Equity Securities
under this Section 4.01 in writing that in its or their opinion that, the number
of securities proposed to be sold in such registration (including securities to
be included pursuant to Section 4.01(a) above) will materially adversely affect
the success of such offering, the Company will include in such registration the
number of securities, if any, which in the opinion of such underwriter or
underwriters, or the Company or such subsidiary, as the case may be, can be sold
as follows: (i) first, the shares the Company
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proposes to sell; (ii) second, the shares of Common Stock requested to be
included in such registration by WHO and the Purchasers; and (iii) third, the
securities requested to be included by each other Person exercising any
Piggyback Registration rights; provided that (a) if all shares requested to be
included in such Piggyback Registration by members of any group set forth above
are not to be included, selection of shares to be included from within such
groups shall be made pro rata based on the number of shares that each member of
such group holds and (b) no Stockholder shall have the right to register shares
pursuant to this Section 4.01 if the Company is at such time, and has been
continuously during the immediately preceding three years, subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act and such
Stockholder is then entitled to sell all of its shares of Stock or Equity
Securities without any volume restrictions pursuant to Rule 144 of the
Securities Act or all of such shares of Stock or Equity Securities may be sold
pursuant to Rule 144(k) of the Securities Act.
4.02 Demand Registration Rights. Upon the written request (the
"Request") of such Stockholder having such rights that the Company register
under the Securities Act any or all shares of Stock or Equity Securities then
held by such Stockholder, the Company will include such shares in a registration
statement on Form S-1, Form S-2 or Form S-3 (or any equivalent form), and use
its best efforts to register such shares, under the Securities Act (a "Demand
Registration Right"). A majority in interest of the Purchasers shall have two
Demand Registration Rights with respect to the registration of shares of Form
S-1 and twenty percent in interest of the Purchasers shall have two Demand
Registration Rights with respect to the registration of shares on Form S-3 at
any time after the Company becomes eligible to use Form S-3. A Demand
Registration Right may not be exercised unless the managing underwriter or
underwriters, if any, or the Purchasers exercising such Demand Registration
Rights, if the offering is not underwritten, advise the Company that the
anticipated aggregate offering price of the shares of Common Stock to be sold by
the Purchasers exercising such Demand Registration Rights is at least
$10,000,000. The Company will promptly give written notice of such requested
registration to all other Stockholders and thereupon will use its best efforts
to effect the registration under the Securities Act of (i) the shares of Stock
or Equity Securities, which the Company has been so requested to register, for
disposition in accordance with the intended method of disposition stated in such
request; and (ii) all other Common Stock, the holders of which shall have,
within 20 days after the receipt of such written notice from the Company, made
written request (which notice shall specify the intended method of disposition
thereof) to the Company for registration thereof, all to the extent required to
permit the disposition (in accordance with the intended method thereof as
aforesaid) by all such holders of securities so to be registered; provided,
however, that the Company shall not be obligated to effect any such registration
pursuant to this Section 4.02 at any time prior to the date six months following
the consummation of the Company's initial public offering. Notwithstanding the
foregoing, the Company may defer the effective date of such Demand Registration
Right for a period of up to 180 days from the date of its receipt of exercise of
the Demand Registration Right or such shorter period provided below, if (i) at
the time of the exercise of the Demand Registration Right, the Company is
engaged in a material transaction or has an undisclosed material corporate
development, which in either case, would be required to be disclosed under the
federal securities laws in the registration statement, and (ii) the Company's
Board of Directors has made a good faith determination that making such
disclosure at such time would materially adversely affect
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such transaction or development (in which case, the Company shall disclose the
matter as promptly as practicable and promptly thereafter file the registration
statement). The Company may defer a Demand Registration Right for not more than
180 days in any one-year period. If the managing underwriter or underwriters, if
any, advise the Stockholders seeking to register shares of Common Stock, under
this Section 4.02 in writing that in its or their opinion the number of
securities proposed to be sold in such registration will materially adversely
affect the success of such offering, the Company will include in such
registration the number of securities, if any, which in the opinion of such
underwriter or underwriters can be sold on a pro rata basis based on the number
of shares that each Stockholder holds.
4.03 Holdback Agreement. Notwithstanding any other provision
in this Article 4, the Company and each Stockholder whose shares of Common Stock
are included in a registration statement agrees it will not, and the Company
shall use its best efforts to not permit any Affiliate to (and it shall be a
condition to the rights of each Stockholder under this Article 4 that such
Stockholder does not) offer for public sale any shares of Common Stock or Equity
Securities, or effect any sale of securities pursuant to Rule 144, during the 10
days prior to and the 180 days after the closing date of any underwritten
offering thereunder unless such shares are covered by such registration
statement or such shorter period is agreed to by any managing underwriter or
underwriters of such offering.
4.04 Expenses. All Registration Expenses, disbursements and
fees incurred by the Company and the Stockholders in connection with any
registration under this Article 4 shall be borne by the Company.
4.05 Registration Procedures. In connection with the
registration of shares of Stock or Equity Securities under the Securities Act
pursuant to this Agreement, the Company, will furnish each Stockholder whose
shares of Stock or Equity Securities re registered thereunder and each
underwriter, if any, with a copy of the registration statement (including all
exhibits thereto) and all amendments thereto and will supply each such
Stockholder and each underwriter, if any, with copies of any prospectus included
therein (including a preliminary prospectus and all amendments and supplements
thereto) in such quantities as may be reasonably necessary for the purposes of
the proposed sale or distribution covered by such registration.
Notwithstanding anything to the contrary herein, the only
securities which the Company shall be required to register pursuant to this
Article 4 shall be shares of Common Stock; provided, however, that in any
underwritten public offering, the holders of Preferred Stock and any securities
exercisable or exchangeable for or convertible into Common Stock, and any
rights, options or warrants to acquire any of the foregoing, shall be entitled
to sell such securities to the underwriters for exercise, exchange or conversion
and sale of the shares of Common Stock issued upon exercise, exchange or
conversion thereof.
In connection with the Company's registration obligations
pursuant to this Article 4, the Company will use its best efforts to effect such
registration to permit the sale of such shares of Stock or Equity Securities in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company will:
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(a) prepare and file with the SEC, as soon as practicable
after receiving a written notice pursuant to Section 4.02, a registration
statement on any appropriate form under the Securities Act, which form shall be
selected by the Company (and shall be reasonably acceptable to any managing
underwriter chosen by holders of shares covered by such registration statement)
and shall be available for the sale of the shares in accordance with the
intended method or methods of distribution thereof, and use its reasonable
efforts to cause such registration statement to become effective; provided that
before filing a registration statement or any prospectus related thereto or any
amendments or supplements thereto, including documents incorporated by reference
after the initial filing of any registration statement, the Company will furnish
copies of all such documents proposed to be filed to the holders of the shares
covered by such registration statement and underwriters, if any, and make the
Company's representatives available for discussion of such documents and other
relevant matters and shall reasonably consider such changes in such documents
prior to the filing thereof as such holders or underwriters may timely and
reasonably request. If any Stockholder whose shares of Stock or Equity
Securities are covered by such registration statement shall reasonably object to
any disclosure in or omission from any registration statement or any amendment
thereto or any prospectus or any supplement thereto (including documents
incorporated by reference) which the Company in good faith on the advice of
counsel believes is necessary or appropriate to be included therein or omitted
therefrom, and prior to the effectiveness of such registration advises the
Company that it chooses not to participate in such offering, such Stockholder
may choose not to participate in such offering;
(b) prepare and file with the SEC such amendments and
post-effective amendments to the registration statement as may be necessary to
keep such registration statement effective for the required duration thereof;
cause the related prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act; and comply with the relevant provisions of the Securities Act
during the applicable period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration statement or
supplement to such prospectus;
(c) notify the selling Stockholders and the managing
underwriters if any, promptly, and (if requested by any such holder) confirm
such advice in writing, (A) when a prospectus or any prospectus supplement or
post-effective amendment has been filed, and, with respect to a registration
statement or any post-effective amendment, when the same has become effective,
(B) of any request by the SEC for amendments or supplements to a registration
statement or related prospectus or for additional information, (C) of the
issuance by the SEC of any stop order suspending the effectiveness of a
registration statement or the initiation of any proceedings for that purpose,
(D) of the receipt by the Company of any written notification with respect to
the suspension of the qualification of any of the shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, and (E) of the existence of any fact known to the Company which results
in a registration statement, a prospectus or any document incorporated therein
by reference containing an untrue statement of a material fact or omitting to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
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(d) use reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of a registration statement at the earliest
practicable moment;
(e) if reasonably requested by the managing underwriters or a
selling Stockholder, promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriters or a
selling Stockholder agree should be included therein, subject to the last
sentence of Section 4.05(a); and promptly make all required filings of such
prospectus supplement or post-effective amendment as soon as notified of the
matters to be incorporated in such prospectus supplement or post-effective
amendment;
(f) prior to any public offering of Stock or Equity
Securities, register or qualify or cooperate with the selling Stockholders, the
managing underwriters, if any, and their respective counsel in connection with
the registration or qualification of such shares for offer and sale under the
securities or "blue sky" laws of such jurisdictions within the United States as
any seller or underwriter reasonably requests in writing and do any and all
other acts or things reasonably necessary or advisable to enable the disposition
in such jurisdictions of the shares of Common Stock covered by the applicable
registration statement; provided that the Company will not be required to
qualify generally to do business in any jurisdiction where it would not
otherwise be required to be so qualified or to take any action which would
subject itself to taxation (other than a nominal amount) in any such
jurisdiction or to general service of process in any jurisdiction where it is
not then so subject;
(g) cooperate with the selling Stockholders and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing shares of Common Stock to be sold and not bearing any
restrictive legends; and enable such shares to be in such denominations and
registered in such names as the managing underwriters may request at least two
business days prior to any sale of shares to the underwriters;
(h) use its best efforts to cause the shares covered by the
applicable registration statement to be listed or registered with or approved by
any stock exchange or quotation system on which the shares of Stock or Equity
Securities are then listed and by such governmental agencies or authorities
within the United States as may be reasonably necessary to enable the seller or
sellers thereof or the underwriters, if any, to consummate the disposition of
such shares;
(i) if any fact contemplated by Section 4.05 (c)(E) shall
exist, prepare a supplement or post-effective amendment to the applicable
registration statement or the related prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the shares of Stock or Equity Securities being
sold thereunder, such prospectus will not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(j) provide a CUSIP number for all shares of Stock or Equity
Securities, no later than the effective date of the applicable registration
statement;
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(k) enter into such agreements (including an underwriting
agreement) and take all such other actions in connection therewith in order to
expedite or facilitate the disposition of such shares of Stock or Equity
Securities and in such connection, whether or not an underwriting agreement is
entered into and whether or not the registration is an underwritten
registration: (A) make such representations and warranties to the holders of
such shares and the underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in primary underwritten offerings;
(B) obtain opinions of counsel to the Company (including counsel which may be an
employee of the Company) and updates thereof which counsel and opinions (in
form, scope and substance) shall be reasonably satisfactory to the managing
underwriters, if any, covering the matters customarily covered in opinions
requested by such holders and underwriters; (C) obtain "cold comfort" letters
and updates thereof from the Company's independent certified public accountants,
addressed to the selling holders and the underwriters, if any, such letters to
be in customary form and covering matters of the type customarily covered in
"cold comforts" letters to underwriters in connection with primary underwritten
offerings; (D) if any underwriting agreement is entered into, the same shall set
forth in full the indemnification provisions and procedures of Section 4.06 with
respect to all parties to be indemnified pursuant to such Section 4.06; and (E)
the Company shall deliver such documents and certificates as may be reasonably
requested by the holders of the Stock or Equity Securities being sold and the
managing underwriters, if any, to evidence compliance with clause (A) hereof and
with any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company. The above shall be done at each closing
under such underwriting or similar agreement or as and to the extent otherwise
reasonably required thereunder;
(l) make available for inspection during normal business hours
by a representative of each Stockholder, any underwriter participating in any
disposition pursuant to a registration statement and any attorney or accountants
retained by such selling Stockholders or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all information
reasonably requested by such representative, underwriter, attorney or accountant
in connection with such registration statement; provided, that such
Stockholders, underwriters, attorneys or accountants execute prior thereto an
agreement with the Company that all such records, information or document shall
be kept confidential by such persons unless (A) disclosure of such records,
information or documents is required by law or by court or administrative order,
or (B) such records, information or documents are or become (but only when they
become) generally available to the public other than as a result of disclosure
in violation of this paragraph; and
(m) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make generally available to the
Stockholders earnings statements satisfying the provisions of Section 1 l(a) of
the Securities Act no later than 45 days after the end of any 12-month period
(or 90 days, if such period is a fiscal year) (A) commencing at the end of any
fiscal quarter in which shares of Stock or Equity Securities are sold to
underwriters in an underwritten offering, or (B) if not sold to underwriters in
such an offering beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the registration statement, which
statements shall cover such 12-month periods.
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The Company may require each Stockholder who is a party hereto
as to which any registration is being effected to furnish to the Company such
information and undertakings as it may reasonably request regarding such
Stockholder and the distribution of such securities as the Company may from time
to time reasonably request in writing.
Each Stockholder who is a party hereto agrees (i) that upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 4.05 (c)(E) such Stockholder will forthwith discontinue
such Stockholder's disposition of shares of Stock or Equity Securities pursuant
to the registration statement relating to such shares until such Stockholder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 4.05(i) and, if so directed by the Company, will deliver to the Company
(at the Company's expense) all copies then in such Stockholder's possession of
the prospectus relating to such shares current at the time of receipt of such
notice and (ii) that such Stockholder will immediately notify the Company, at
any time when a prospectus relating to the registration of such shares is
required to be delivered under the Securities Act, of the happening of any event
as a result of which information previously furnished by such holder to the
Company in writing for inclusion in such prospectus contains an untrue statement
of a material fact or omits to state any material fact required to be stated
therein, or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
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4.06 Indemnification and Contribution.
(a) Indemnification. (i) In the event of any registration
under the Securities Act of any shares of Stock pursuant to this Article 4, the
Company hereby agrees to indemnify and hold harmless each Stockholder offering
or selling such shares and any underwriter, and their respective officers,
directors, stockholders, members, partners and affiliates, in connection with
such offer or sale against such losses, claims, damages, liabilities, costs or
expenses (including reimbursement for reasonable legal and other expenses) to
which any such person may become subject under the Securities Act or otherwise
insofar as such losses, claims, damages, liabilities, costs or expenses arise
out of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such shares
were registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any application or other filing under any "blue sky" or
state securities law, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, provided that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage, liability (or action or proceeding
in respect thereof), cost or expense arises out of or is based upon an untrue
statement or omission or alleged omission made in such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement, or application or other filing, in reliance upon and in conformity
with written information furnished to the Company through an instrument duly
executed by any holder of the Company's securities or underwriter.
(ii) In the event of any registration under the Securities Act
of any shares of Common Stock pursuant to this Article 4, each Stockholder whose
shares of Stock or Equity Securities are included in such registration hereby
agrees to indemnify and hold harmless, but only for an amount, with respect to
such Stockholder, not in excess of the net proceeds realized by such Stockholder
from the sale of its shares of Common Stock registered pursuant to such
registration statement, both the Company and its officers, directors,
stockholders and affiliates, and any underwriter, and their respective officers,
directors, stockholders and affiliates, in connection with such offer or sale
against such losses, claims, damages, liabilities, costs or expenses (including
reimbursement for reasonable legal and other expenses) to which any such person
may become subject under the Securities Act or otherwise insofar as such losses,
claims, damages, liabilities, costs or expenses arise out of or are based solely
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such shares were registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, or
any application or other filing under any "blue sky" or state securities law, or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, to the extent that
such untrue statement or omission or alleged omission made in such registration
statement, any such preliminary prospectus, final prospectus, summary
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prospectus, amendment or supplement, or application or other filing, is
contained in any written information furnished to the Company through an
instrument duly executed by such holder.
(b) Contribution.(i) If the indemnification provided for in
Section 4.06(a) is unavailable to persons to be indemnified pursuant thereto in
respect of any losses, claims, damages, liabilities, costs or expenses referred
to therein, then the Company, in lieu of indemnifying such person, shall
contribute to the amount paid or payable by such person as a result of such
losses, claims, damages, liabilities, costs or expenses, in such proportion as
is appropriate to reflect the relative fault of the Company and such persons in
connection with the actions which resulted in such losses, claims, damages,
liabilities, costs or expenses, as well as any other relevant equitable
considerations. The relative fault of the Company and such persons shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, the Company or such persons, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such action. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities, costs and expenses referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such party in connection with any investigation or proceeding.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 4.06(b) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 4.06(b), an
indemnified person shall not be required to contribute any amounts in excess of
the amount by which the total price at which the shares of Stock or Equity
Securities were sold by such indemnified person and distributed to the public
exceeds the amount of any damages which such indemnified person has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission and provided, however, that such Stockholder's
aggregate liability shall be limited to the net proceeds realized by such
Stockholder in such offering. 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.
(iii) If indemnification is available under this Section 4,
the Company shall indemnify each indemnified party to the full extent provided
herein without regard to the relative fault of the Company or the indemnified
party or any other equitable consideration provided for in this Section 4.06(b).
(iv) In the event that any provisions of an indemnification
clause in an underwriting agreement executed by or on behalf of a holder differs
from a provision in this Article IV, such provision in the underwriting
agreement shall determine such holder's rights in respect thereof.
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ARTICLE V
RIGHT TO ACQUIRE SECURITIES
5.01 Right to Acquire Securities. If at any time the Company
proposes to issue in any non-public offering Stock or Equity Securities of the
Company (except for (i) issuances pursuant to the terms of any stock option or
other incentive plan duly approved by the Board of Directors or (ii) issuances
in connection with (w) a conversion or exchange of any outstanding securities,
(x) a stock dividend, (y) an acquisition pursuant to the Company's acquisition
strategy set forth in the Company's Confidential Offering Memorandum dated March
12, 1998, as amended through January 15, 1999, without regard to the aggregate
amount of such offering specified in such Confidential Offering Memorandum, (z)
a merger, reclassification or other reorganization, then, as to the Purchasers,
so long as they shall hold any shares of Preferred Stock or Common Stock, the
Company shall:
(a) give written notice setting forth in reasonable detail (i)
the designation and all of the terms and provisions of the equity securities
proposed to be issued (the "Proposed Securities"), including, where applicable,
the voting powers, preferences and relative participating, optional or other
special rights, and the qualification, limitations or restrictions thereof and
interest or dividend rate and maturity; (ii) the price and other terms of the
proposed sale of such securities; (iii) the amount of such securities proposed
to be issued; and (iv) such other information as may be reasonably required or
requested by any such Stockholder in order to evaluate the proposed issuance;
and
(b) each Purchaser shall have the option to acquire a number
of shares or, if applicable, share equivalents of the Proposed Securities equal
to the number of shares of the Proposed Securities multiplied by a fraction, the
numerator of which shall be the number of shares of Common Stock or Common Stock
Equivalents held by such Purchaser and the denominator of which shall be the
total number of shares of Common Stock outstanding on a fully diluted basis.
(c) Each such Purchaser that wishes to exercise its purchase
rights hereunder shall deliver a written notice to that effect to the Company
within fifteen (15) days after its receipt of the notice specified in Section
5.01(a) from the Company. To the extent that a sufficient number of shares of
Common Stock or Common Stock Equivalents are not available for such purpose, the
Company shall take all action necessary and proper to authorize and issue such
Common Stock or Common Stock Equivalents.
(d) Upon the expiration of the offering period described
above, the Company will be free to sell Proposed Securities that such Purchasers
have not elected to purchase during the ninety (90) days following such
expiration on terms and conditions (considered as a whole) no more favorable to
the buyers thereof than those offered to such Purchasers. Any Proposed
Securities offered or sold by the Company after such 90-day period must be
re-offered to such Purchasers pursuant to this Section 5.01. The election by any
such Purchaser not to exercise its
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subscription rights under this Section 5.01 in any one instance shall not affect
its right (other than in respect of a reduction in its percentage holdings) as
to any subsequent proposed issuance. Any sale of such securities by the Company
without first giving such Purchasers the rights described in this Section 5.01
shall be void and of no force and effect, and the Company shall cause any
correction required to be effected.
5.02 Expiration of Right. The parties hereto agree that the
rights set forth in Article V hereof shall expire and be of no further force and
effect as of the Expiration Date.
ARTICLE VI
CERTAIN REPRESENTATIONS AND COVENANTS
6.01 Stockholder Representation. Each Stockholder represents
and warrants as to itself that as of the Closing Date (after giving effect to
all transactions occurring on or as of the Closing Date) such Stockholder is not
a party with any other Person to any other agreement with respect to the
holding, voting, acquisition or disposition of shares of Stock or Equity
Securities except as previously disclosed to the other Stockholders.
6.02 Company Representation. The Company represents and
warrants that as of the Closing Date (after giving effect to all transactions
occurring on or as of the Closing Date) (i) it is not a party with any other
Person to any other agreement with respect to the holding, voting, acquisition
or disposition of shares of Stock or Equity Securities to the other
Stockholders, and (ii) it has not granted to any other Person any other
registration rights with respect to capital stock of the Company, and no holder
of any capital stock of the Company shall have as of the date hereof any right
to require registration of any capital stock of the Company under the Securities
Act or to include any security in any registration statement filed by the
Company under the Securities Act except pursuant hereto; provided, however, that
the Company is a party to the Registration Rights Agreement dated as of December
8, 1997, between the Company and WHO.
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ARTICLE VII
MISCELLANEOUS
7.01 Injunctive Relief. It is acknowledged that it will be
impossible to measure in money the damages that would be suffered if the parties
fail to comply with certain of the obligations imposed on them by this
Agreement, including without limitation those obligations set forth in Article
II, Article III, Article IV and Article V and that in the event of any such
failure, an aggrieved Person will be irreparably damaged and will not have an
adequate remedy at law. Any such Person shall, therefore, be entitled to
injunctive relief and/or specific performance to enforce such obligations, and
if any action should be brought in equity to enforce any of such provisions of
this Agreement, none of the parties hereto shall raise the defense that there is
an adequate remedy at law.
7.02 Further Assurances. Each party hereto shall do and
perform or cause to be done and performed all such further acts and things and
shall execute and deliver all such other agreements, certificates, instruments
and documents as any other party hereto reasonably may request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
7.03 Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the laws of the State of New York.
7.04 Entire Agreement; Amendment; Waiver. This Agreement (i)
contains the entire agreement among the parties hereto with respect to the
subject matter hereof, (ii) supersedes all prior written agreements and
negotiations and oral understandings, if any, with respect thereto, (iii) may
not be amended or supplemented except by an instrument or counterparts thereof
in writing signed by the Company, WHO and a majority in interest of the
Purchasers then holding Stock or Equity Securities. No waiver of any term or
provision shall be effective unless in writing signed by the party to be charged
and such waiver shall not be effective to any other provision of this Agreement.
7.05 Binding Effect. This Agreement shall be binding on and
inure to the benefit of the parties hereto and, subject to the terms and
provisions hereof, their respective legal representatives, successors and
permitted assigns.
7.06 Invalidity of Provision. The invalidity or
unenforceability of any provision of this Agreement in any jurisdiction shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of this Agreement, including
that provision, in any other jurisdiction.
7.07 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, all of which taken together shall be
deemed but one and the same instrument.
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7.08 Notices. All notices and other communications provided
for or given or made hereunder shall be in writing (including delivery by
facsimile transmission) and, unless otherwise provided herein, shall be deemed
to have been given when received by the party to whom such notice is to be given
at its address set forth in the Note and Stock Purchase Agreement, or such other
address for the party as shall be specified by notice given pursuant hereto.
7.09 Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute part of this Agreement.
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IN WITNESS WHEREOF, this Agreement has been executed by or on
behalf of each of the parties hereto as of the date first above written.
SAGE NETWORKS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Co-Chairman
STOCKHOLDERS:
WEB HOSTING ORGANIZATION, L.L.C.
By: /s/ Xxx X. Xxxxx
-------------------------------
Name: Xxx X. Xxxxx
----------------
Title: Authorized Signatory
SOFTBANK TECHNOLOGY VENTURES IV, L.P.
By: STV IV LLC, its general partner
By: /s/ Xxxxxxx X. Xxx
-------------------------------
Xxxxxxx X. Xxx, Managing Member
SOFTBANK TECHNOLOGY VENTURES IV, L.P.
By: STV IV LLC, its managing partner
By: /s/ Xxxxxxx X. Xxx
-------------------------------
Xxxxxxx X. Xxx, Managing Member
SOFTBANK TECHNOLOGY ADVISORS FUND, L.P.
By: STV IV LLC, its managing partner
By: /s/ Xxxxxxx X. Xxx
-------------------------------
Xxxxxxx X. Xxx, Managing Member
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SCHEDULE I
STOCKHOLDERS' OWNERSHIP OF SECURITIES OF THE COMPANY
Common Stock
------------
WEB HOSTING ORGANIZATION, L.L.C. 18,600,000 shares
Series A Convertible Preferred Stock
SOFTBANK TECHNOLOGY VENTURES IV, L.P. 2,597,882 shares
SOFTBANK TECHNOLOGY ADVISORS FUND, L.P. 49,776 shares
Warrants
SOFTBANK TECHNOLOGY VENTURES IV, L.P. 735,532 shares of Common Stock
SOFTBANK TECHNOLOGY ADVISORS FUND, L.P. 14,093 shares of Common Stock
