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EXHIBIT 10.8
VERIO INC.
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
MAY 20, 1997
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VERIO INC.
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THIS AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Agreement") dated
as of May 20, 1997 is entered into by and among (i) VERIO INC., a Delaware
corporation (the "Company"), (ii) the holders of the Company's Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock
identified on the signature pages hereto (the "Investors"), and (iii) the
members of the Company's management identified on the signature pages hereto or
that have otherwise agreed to be bound by the provisions hereof (the "Management
Holders") and replaces the Stockholders Agreement dated December 5, 1996, as
amended, by and among the Company and the Company's existing Investors and
Management Holders. The Investors and the Management Holders are referred to
collectively as the "Stockholders."
Certain of the Investors and the Company are parties to a Series C
Preferred Stock Purchase Agreement of even date herewith (the "Purchase
Agreement"). Such Investors' obligations under the Purchase Agreement are
conditioned upon the execution and delivery of this Agreement by the
Stockholders and the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the following
respective meanings:
1.1 "AFFILIATE" of a person means any other person that controls, is
controlled by, or is under common control with, such person.
1.2 "CLOSING" shall mean the date of the initial sale of shares of the
Company's Series C Preferred Stock pursuant to the Purchase Agreement.
1.3 "COMMISSION" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
1.4 "COMMON STOCK" shall mean the Company's Common Stock, $.001 par value
per share.
1.5 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934 (or any
similar successor federal statute), as amended, and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
1.6 "INITIATING HOLDERS" shall mean holders of Registrable Securities
representing not less than twenty-five percent (25%) of the then-outstanding
Registrable Securities.
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1.7 "INVESTOR STOCK" shall mean (i) shares of Common Stock owned by the
Investors or any transferee thereof; (ii) shares of Common Stock issued or
issuable upon the conversion or exercise of any stock (including, without
limitation, the Series A Preferred Stock, Series B Preferred Stock and Series C
Preferred Stock) warrants, options or other securities of the Company owned by
the Investors or any transferee thereof; and (iii) any shares of Common Stock
issued as a dividend or other distribution with respect to or in exchange for or
in replacement of the shares referenced in (i) and (ii) above.
1.8 "MANAGEMENT STOCK" shall mean (i) shares of Common Stock owned by the
Management Holders or any Permitted Transferee thereof; (ii) shares of Common
Stock issued or issuable upon the conversion or exercise of any options or other
securities of the Company owned by the Management Holders; and (iii) any shares
of Common Stock issued as a dividend or other distribution with respect to or in
exchange for or in replacement of the shares referenced in (i) and (ii) above.
1.9 "PERMITTED TRANSFEREE" shall mean, (i) with respect to a Management
Holder, a member of such Management Holder's immediate family, a trust
established for the benefit of members of such Management Holder's immediate
family, or a transferee of such Management Holder by will or the laws of
intestate succession, and (ii) with respect to a holder of Investor Stock, any
Affiliate of such Stockholder or any partner, shareholder or other equity owner
of such Stockholder or, in the case of Providence Equity Partners L.P. or
Providence Equity Partners II L.P. (collectively, "Providence"), the members of
their sole general partners on the date hereof.
1.10 "QUALIFIED PUBLIC OFFERING" shall mean an underwritten public offering
of Common Stock resulting in proceeds to the Company of not less than $30
million (prior to expenses and underwriting commissions) and at an offering
price per share equal to at least $15.00 (as appropriately adjusted for future
stock splits, stock dividends, recapitalizations and similar transactions
affecting the Common Stock).
1.11 "REGISTRABLE SECURITIES" shall mean the Investor Stock; provided,
however, that Registrable Securities shall not include any shares of Investor
Stock that have previously been registered under the Securities Act or that have
otherwise been sold to the public in an open-market transaction under Rule 144.
1.12 The terms "REGISTERS," "REGISTERED" and "REGISTRATION" shall refer to
a registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering of the
effectiveness of such registration statement by the Commission.
1.13 "REGISTRATION EXPENSES" shall mean all expenses incurred in effecting
any registration pursuant to this Agreement, including without limitation all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses,
expenses of any regular or special audits incident to or required by any such
registration, and the fees and expenses of one counsel for the selling holders
of Registrable Securities, but excluding Selling Expenses.
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1.14 "RULE 144" shall mean Rule 144 as promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
1.15 "SECURITIES ACT" shall mean the Securities Act of 1933 (or any similar
successor federal statute), as amended, and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
1.16 "SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities.
1.17 "SERIES A PREFERRED STOCK" shall mean the Company's Series A Preferred
Stock, $.001 par value per share.
1.18 "SERIES B PREFERRED STOCK" shall mean the Company's Series B Preferred
Stock, $.001 par value per share.
1.19 "SERIES C PREFERRED STOCK" shall mean the Company's Series C Preferred
Stock, $.001 par value per share.
1.20 "SIGNIFICANT HOLDER" shall mean a holder of Registrable Securities
representing at least five percent (5%) of the fully diluted Common Stock of the
Company.
1.21 "SUBSIDIARIES" shall refer to the Company's wholly-owned subsidiaries:
CCNet, Inc., a California corporation, Global Enterprises Services, Inc., a
Colorado corporation, NorthWestNet, Inc., an Oregon corporation, Pioneer Global
Telecommunications, Inc., a Massachusetts corporation, and RustNet, Inc., a
Colorado corporation, and any other corporation or other entity that becomes a
wholly-owned subsidiary of the Company.
ARTICLE 2
REGISTRATION RIGHTS
2.1 DEMAND REGISTRATIONS.
(a) REQUEST FOR REGISTRATION. At any time or times after the effective
date of the first registration statement filed by the Company under the
Securities Act, the Initiating Holders may require that the Company effect a
registration under the Securities Act (i) in the case of a requested
registration on Form S-1 or any similar form (a "Long Form Registration"), with
respect to at least ten percent (10%) of the Registrable Securities then
outstanding or (ii) in the case of a requested registration on Form S-3 or any
similar form, if available (a "Short-Form Registration"), with respect to
Registrable Securities with an anticipated offering price of $5,000,000 or more
(each a "Demand Registration"). Upon receipt of written notice of such demand,
the Company will promptly give written notice of the proposed registration to
all other holders of Registrable Securities and will include in such
registration all Registrable Securities specified in such demand, together with
all Registrable Securities of any other holder of
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Registrable Securities joining in such demand as are specified in a written
request received by the Company within twenty (20) days after delivery of the
Company's notice.
(b) DEFERRAL OF DEMAND REGISTRATION. The Company shall file a
registration statement with respect to each Demand Registration requested
pursuant to Section 2.1(a) as soon as practicable after receipt of the demand of
the Initiating Holders; provided, however, that if in the good faith judgment of
the Board of Directors of the Company, such registration would be seriously
detrimental to the Company in that such registration would interfere with a
proposed primary registration of securities by the Company or any other material
corporate transaction and the Board of Directors concludes, as a result, that it
is advisable to defer the filing of such registration statement at such time (as
evidenced by an appropriate resolution of the Board), then the Company shall
have the right to defer such filing for the period during which such
registration would be seriously detrimental; provided, however, that (x) the
Company may not defer the filing for a period of more than one hundred eighty
(180) days after receipt of the demand of the Initiating Holders, (ii) the
Company shall not exercise its right to defer a Demand Registration more than
once, and (iii) if the Company undertakes a primary registration following an
exercise of its deferral right, the holders of Registrable Securities shall have
"piggyback" rights under Section 2.2 hereof with respect to not less than
one-third (1/3) of the number of shares of Common Stock to be sold in such
offering.
(c) UNDERWRITING. If the Initiating Holders intend to distribute the
Registrable Securities covered by a Demand Registration by means of an
underwriting, they shall so advise the Company as a part of their demand made
pursuant to Section 2.1 and the Company shall include such information in its
written notice to holders of Registrable Securities. The Initiating Holders
shall have the right to select the managing underwriter(s) for an underwritten
Demand Registration, subject to the approval of the Company's Board of Directors
(which will not be unreasonably withheld or delayed). The right of any holder of
Registrable Securities to participate in an underwritten Demand Registration
shall be conditioned upon such holder's participation in such underwriting in
accordance with the terms and conditions thereof, and the Company and such
holders will enter into an underwriting agreement in customary form.
(d) PRIORITIES. The holders of Registrable Securities will have
absolute priority over any other securities included in a Demand Registration.
If other securities are included in any Demand Registration that is not an
underwritten offering, all Registrable Securities included in such offering
shall be sold prior to the sale of any of such other securities. If other
securities are included in any Demand Registration that is an underwritten
offering, and the managing underwriter for such offering advises the Company
that in its opinion the amount of securities to be included exceeds the amount
of securities which can be sold in such offering without adversely affecting the
marketability thereof, the Company will include in such registration all
Registrable Securities requested to be included therein prior to the inclusion
of any other securities. If the number of Registrable Securities requested to be
included in such registration exceeds the amount of securities which in the
opinion of such underwriter can be sold without adversely affecting the
marketability of such offering, such Registrable Securities shall be included
pro rata among the holders thereof based on the percentage of the outstanding
Common Stock held by each such Stockholder (assuming the conversion of the
Series A
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Preferred Stock, Series B Preferred Stock and Series C Preferred Stock
and the exercise of all options, warrants and similar rights held by such
Stockholder).
2.2 PIGGYBACK REGISTRATIONS.
(a) REQUEST FOR INCLUSION. If the Company shall determine to register
any of its securities for its own account or for the account of other security
holders of the Company on any registration form (other than Form S-4 or S-8)
which permits the inclusion of Registrable Securities (a "Piggyback
Registration"), the Company will promptly give each holder of Registrable
Securities written notice thereof and, subject to Section 2.2(c), shall include
in such registration all the Registrable Securities requested to be included
therein pursuant to the written requests of holders of Registrable Securities
received within twenty (20) days after delivery of the Company's notice.
(b) UNDERWRITING. If the Piggyback Registration relates to an
underwritten public offering, the Company shall so advise the holders of
Registrable Securities as a part of the written notice given pursuant to Section
2.2(a). In such event, the right of any holder of Registrable Securities to
participate in such registration shall be conditioned upon such holder's
participation in such underwriting in accordance with the terms and conditions
thereof. All holders of Registrable Securities proposing to distribute their
securities through such underwriting shall (together with the Company) enter
into an underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company.
(c) PRIORITIES. If such proposed Piggyback Registration is an
underwritten offering and the managing underwriter for such offering advises the
Company that the securities requested to be included therein exceeds the amount
of securities that can be sold in such offering, except as provided in Section
2.l(b), any securities to be sold by the Company in such offering shall have
priority over any Registrable Securities, and the number of shares to be
included by a holder of Registrable Securities in such registration shall be
reduced pro rata on the basis of the percentage of the outstanding Common Stock
held by such Stockholder (assuming the conversion of the Series A Preferred
Stock, Series B Preferred Stock and Series C Preferred Stock and the exercise of
all options, warrants and similar rights held by such Stockholder) and all other
holders exercising similar registration rights.
2.3 EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with up to two Long-Form Registrations and all Short-Form and
Piggyback Registrations shall be borne by the Company; provided, however, that
(x) no registration shall count as one of the Company-paid Long Form
Registrations unless the holders of Registrable Securities are able to register
and sell at least ninety percent (90%) of the Registrable Securities requested
to be included therein, and (y) the holders of Registrable Securities shall be
entitled to additional Long-Form Registrations, so long as such holders agree to
bear all Registration Expenses associated therewith. All Selling Expenses
relating to Registrable Securities included in any Demand or Piggyback
Registration shall be borne by the holders of such securities pro rata on the
basis of the number of shares sold by them.
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2.4 REGISTRATION PROCEDURES. In the case of each registration effected by
the Company pursuant to this Article II, the Company will keep each holder of
Registrable Securities advised in writing as to the initiation of such
registration and as to the completion thereof. At its expense, the Company will
use its best efforts to:
(a) cause such registration to be declared effective by the Commission
and, in the case of a Demand Registration, keep such registration effective for
a period of one hundred eighty (180) days or until the holders of Registrable
Securities included therein have completed the distribution described in the
registration statement relating thereto, whichever first occurs;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement (including post-effective amendments) 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) obtain appropriate qualifications of the securities covered by
such registration under state securities or "blue sky" laws in such
jurisdictions as may be requested by the holders of Registrable Securities;
provided, however, that the Company shall not be required to file a general
consent to service of process in any jurisdiction in which it is not otherwise
subject to service in order to obtain any such qualification;
(d) furnish such number of prospectuses and other documents incident
thereto, including any amendment of or supplement to the prospectus, as a holder
of Registrable Securities from time to time may reasonably request;
(e) notify each holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and at the request of any such holder, prepare and
furnish to such holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing;
(f) cause all Registrable Securities covered by such registration to
be listed on each securities exchange or inter-dealer quotation system on which
similar securities issued by the Company are then listed;
(g) provide a transfer agent and registrar for all Registrable
Securities covered by such registration and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration;
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(h) otherwise comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve (12)
months, but not more than eighteen (18) months, beginning with the first month
after the effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act; and
(i) in connection with any underwritten Demand Registration, the
Company will enter into an underwriting agreement reasonably satisfactory to the
Initiating Holders containing customary underwriting provisions, including
indemnification and contribution provisions.
2.5 INDEMNIFICATION.
(a) The Company will indemnify each holder of Registrable Securities,
each of such holders' officers, directors, partners, agents, employees and
representatives, and each person controlling such holder within the meaning of
Section 15 of the Securities Act, with respect to each registration,
qualification or compliance effected pursuant to this Article II, against all
expenses, claims, losses, damages and liabilities (or actions, proceedings or
settlements in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by the Company of the
Securities Act or any rule or regulation thereunder applicable to the Company
and relating to action or inaction required of the Company in connection with
any such registration, qualification or compliance, and will reimburse each such
indemnified person for any legal and any other expenses reasonably incurred in
connection with investigating and defending or settling any such claim, loss,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company by such holder
of Registrable Securities and stated to be specifically for use therein. It is
agreed that the indemnity agreement contained in this Section 2.5(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Company
(which consent has not been unreasonably withheld).
(b) Each holder of Registrable Securities included in any registration
effected pursuant to this Article II shall indemnify the Company, each of its
directors, officers, agents, employees and representatives, and each person who
controls the Company within the meaning of Section 15 of the Securities Act,
each other such holder of Registrable Securities and each of their officers,
directors and partners, and each person controlling such holders, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements
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therein not misleading, and will reimburse such indemnified persons for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in strict conformity with written information furnished to the Company by such
holder of Registrable Securities; provided, however, that (x) no holder of
Registrable Securities shall be liable hereunder for any amounts in excess of
the net proceeds received by such holder pursuant to such registration, and (y)
the obligations of such holder of Registrable Securities hereunder shall not
apply to amounts paid in settlement of any such claims, losses, damages or
liabilities (or actions in respect thereof) if such settlement is effected
without the consent of such holder (which consent has not been unreasonably
withheld).
(c) Each party entitled to indemnification under this Section 2.5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such 2 Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnified
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2.5 to the extent such
failure is not prejudicial. No Indemnifying Party in the defense of any such
claim or litigation shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include an unconditional release of such Indemnified Party from all liability in
respect to such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 2.5 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage or expense referred to therein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions which resulted in such loss, liability, claim,
damage or expense as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
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(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in an underwriting agreement
entered into in connection with an underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.
2.6 OTHER OBLIGATIONS. With a view to making available the benefits of
certain rules and regulations of the Commission which may effectuate the
registration of Registrable Securities or permit the sale of Registrable
Securities to the public without registration, the Company agrees to:
(a) after its initial registration under the Securities Act, exercise
best efforts to cause the Company to be eligible to utilize Form S-3 (or any
similar form) for the registration of Registrable Securities;
(b) at such time as any Registrable Securities are eligible for
transfer under Rule 144(k), upon the request of the holder of such Registrable
Securities, remove any restrictive legend from the certificates evidencing such
securities at no cost to such holder;
(c) make and keep available public information as defined in Rule 144
under the Securities Act at all times from and after ninety (90) days following
its initial registration under the Securities Act;
(d) 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
at any time after it has become subject to such reporting requirements;
(e) furnish any holder of Registrable Securities upon request a
written statement by the Company as to its compliance with the reporting
requirements of Rule 144 (at any time from and after ninety (90) days following
the effective date of the first registration statement filed by the Company for
an offering of its securities to the general public), and of the Securities Act
and the Exchange Act (at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents as a holder of Registrable
Securities may reasonably request in availing itself of any rule or regulation
of the Commission (including Rule 144A) allowing a holder of Registrable
Securities to sell any such securities without registration.
2.7 HOLD-BACK AGREEMENTS. If requested by the Company or any underwriter
of Common Stock of the Company, a holder of Registrable Securities shall not
sell or otherwise transfer or dispose of any Common Stock (other than pursuant
to such registration) during (a) in the case of the Company's initial public
offering of Common Stock for its own account, the one hundred eighty (180) day
period following the effective date of such registration statement, and (b) in
the case of all subsequent registrations of the Company's Common Stock, the
ninety (90) day period following the effective date of such registration
statement; provided, however, that if holders of Management Stock are subjected
to hold-back restrictions of shorter duration, such shorter periods shall apply
to holders of Registrable Securities. The obligations described in this Section
2.7 shall not apply to a registration on Form S-4 or Form S-8 or similar forms
which may
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be promulgated in the future and, except in the case of the Company's
initial public offering, shall not apply to a holder of Registrable Securities
representing less than 1% of the then-outstanding Common Stock.
2.8 TERMINATION OF REGISTRATION RIGHTS. The right of any holder of
Registrable Securities to request inclusion of Registrable Securities in any
registration pursuant to this Article 2 shall terminate when (i) all Registrable
Securities beneficially owned by such holder of Registrable Securities may
immediately be sold under Rule 144(k), and (ii) the Company's Common Stock is
listed on a national securities exchange or traded in The Nasdaq National Market
System; provided, however, that the provisions of this Section 2.8 shall not
apply to any holder of Registrable Securities representing more than five
percent (5%) of the Company's then-outstanding Common Stock.
ARTICLE 3
TRANSFER RESTRICTIONS
3.1 PROHIBITION ON TRANSFER. No Stockholder shall sell, transfer, assign,
pledge or otherwise dispose of any interest in any Stockholder Shares (a
"transfer") other than in compliance with this Article III. Each Stockholder
agrees not to consummate any transfer (other than a transfer to a Permitted
Transferee pursuant to Section 3.4) until the expiration of a 30-day period (the
"Election Period") following delivery by such Stockholder of a Sale Notice
pursuant to Section 3.2 or an Offer Notice pursuant to Section 3.3, as
applicable.
3.2 RIGHTS OF FIRST REFUSAL. If at any time a Management Holder receives a
bona fide offer from any person to purchase shares of Common Stock held by such
Management Holder (a "Third-Party Offer"), such Management Holder shall cause
such Third-Party Offer to be reduced to writing and shall notify the Company and
each holder of Investor Stock of such Management Holder's desire to accept the
Third-Party Offer. The Management Stockholder's notice (the "Sale Notice") shall
contain an irrevocable offer to sell such Common Stock to the Company at a
purchase price equal to the price contained in, and on the same terms and
conditions of, the Third-Party Offer and shall be accompanied by a true copy of
the Third-Party Offer (which shall identify the offeror). At any time within
twenty (20) days after the date of receipt by the Company of the Sale Notice,
the Company shall have the right to purchase all or any portion of the Common
Stock covered by the Third-Party Offer at the same price and on the same terms
and conditions as the Third-Party Offer; provided, however, that (i) any shares
not purchased by the Company shall be reoffered to the holders of Investor
Stock, each of whom shall have the right, exercisable by delivery of written
notice to the transferring Management Holder within ten (10) days following the
expiration of such 20-day period, to purchase all (but not less than all) of its
pro rata share (equal to such electing holder's percentage interest in the
outstanding Investor Stock) and (ii) the Company or the holders of Investor
Stock may pay cash to the selling Management Holder equal in amount to the fair
market value of any non-cash consideration offered in the Third-Party Offer. If
the Company and/or the holders of Investor Stock have not notified the selling
Management Holder in writing of their election to purchase any Common Stock
covered by the Third Party Offer as set forth herein prior to the expiration of
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the Election Period, the selling Management Holder may within sixty (60) days
thereafter sell such Common Stock on the terms set forth in the original
Third-Party Offer. Any Management Stock covered by the Third Party Offer that is
not so transferred during such 60-day period shall again be subject to this
Section 3.2.
3.3 RIGHT OF FIRST OFFER. Prior to any transfer of Investor Stock, the
transferring Stockholder shall deliver a written notice (the "Offer Notice") to
the Company and the other holders of Investor Stock disclosing in reasonable
detail the number of shares of Investor Stock proposed to be transferred (the
"Offered Shares") and the terms and conditions of such proposed transfer. Each
other holder of Investor Stock shall have the right, exercisable by delivery of
written notice to the transferring Stockholder within twenty (20) days after
delivery of the Offer Notice, to purchase all (but not less than all) of its pro
rata share (equal to such electing holder's percentage interest in the
outstanding Investor Stock) of the Offered Shares on the terms and conditions
set forth in the Offer Notice. In the event that any holder of Investor Stock
declines to exercise its right of first offer, the remaining unpurchased portion
of the Offered Shares shall be reoffered to the electing holders of Investor
Stock on a pro rata basis for a period of ten (10) days following the expiration
of such 20-day period. To the extent that the holders of Investor Stock have not
elected to purchase all of the Offered Shares prior to the expiration of the
Election Period, the transferring Stockholder may, within ninety (90) days after
the expiration of the Election Period, transfer such Offered Shares to one or
more third parties at a price not less that ninety-five percent (95%) of the
price per share specified in the Offer Notice. Any Offered Shares not
transferred during such 90-day period shall again be subject to the provisions
of this Section 3.3 upon subsequent transfer.
3.4 EXEMPT TRANSACTIONS. The restrictions set forth in this Article III
shall not apply to transfers of Management Stock or Investor Stock to a
Permitted Transferee of the transferring Stockholder; provided, however, that
such Permitted Transferee shall agree in writing to be bound by such
restrictions in connection with subsequent transfers.
ARTICLE 4
COVENANTS OF THE COMPANY
The Company hereby covenants and agrees, so long as any Registrable
Securities are outstanding, as follows:
4.1 BASIC FINANCIAL INFORMATION. The Company will furnish the following
reports to each Significant Holder and to each holder of Registrable Securities
who has a representative serving on the Company's Board of Directors:
(a) As soon as practicable after the end of each fiscal year of the
Company, a consolidated balance sheet of the Company and its consolidated
subsidiaries, if any, as of the end of such fiscal year, and consolidated
statements of income and cash flow of the Company and its consolidated
subsidiaries, if any, for such year, prepared in accordance with generally
accepted accounting principles consistently applied and setting forth in each
case in comparative form the
11.
13
figures for the previous fiscal year, all in reasonable detail and certified by
independent public accountants of recognized national standing selected by the
Company.
(b) As soon as practicable after the end of each quarterly accounting
period in each fiscal year of the Company, a consolidated balance sheet of the
Company and its consolidated subsidiaries, if any, as of the end of each such
quarterly period, and consolidated statements of income and cash flow of the
Company and its subsidiaries, if any, for such period and for the current fiscal
year to date, prepared in accordance with generally accepted accounting
principles consistently applied and setting forth in comparative form the
figures for the corresponding periods of the previous fiscal year, subject to
changes resulting from normal year-end audit adjustments, all in reasonable
detail and certified by the chief financial officer of the Company (or the chief
accounting officer if no CFO is in place), except that such statements need not
contain the notes required by generally accepted accounting principles.
(c) As soon as practicable after the end of each monthly accounting
period, a consolidated balance sheet of the Company and its consolidated
subsidiaries, if any, as of the end of such month and consolidated statements of
income of the Company and its consolidated subsidiaries, if any, for each month
and for the current fiscal year of the Company to date, all subject to normal
year-end audit adjustments, prepared in accordance with generally accepted
accounting principles consistently applied and certified by the chief financial
officer of the Company (or the chief accounting officer if no CFO is in place),
except that such statements need not contain the notes required by generally
accepted accounting principles.
4.2 ADDITIONAL INFORMATION RIGHTS.
(a) The Company will permit each Significant Holder to visit and
inspect any of the properties of the Company, including its books of account and
other records (and make copies thereof and take extracts therefrom), and to
discuss its affairs, finances and accounts with the Company's officers and its
independent public accountants, all at such reasonable times and as often as any
such person may reasonably request.
(b) The Company will deliver the reports described below in this
Section 4.2(b) to each Significant Holder:
(i) Annually (but in any event at least thirty (30) days prior to
the commencement of each fiscal year of the Company) the financial plan of the
Company, in such manner and form as approved by the Board of Directors of the
Company, which financial plan shall include an operating budget for such fiscal
year and an updated five-year strategic plan for the Company.
(ii) Concurrently with delivery thereof, copies all reports and
other written material submitted to the Board of Directors.
(iii) Concurrently with delivery thereof, copies of any reports or
communications delivered to the financial community, including all press
releases.
12.
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(c) Each Significant Holder hereby agrees to hold in confidence and
trust and not to misuse or disclose any confidential information provided
pursuant to this Section 4.2; provided, however, that a Significant Holder shall
not be prohibited from using any such information for the purpose of generating
and delivering portfolio valuation information to its investors.
4.3 PROMPT PAYMENT OF TAXES, ETC. The Company will promptly pay and
discharge, or cause to be paid and discharged, when due and payable, all lawful
taxes, assessments and governmental charges or levies imposed upon the income,
profits, property or business of the Company or any Subsidiary; provided,
however, that any such tax, assessment, charge or levy need not be paid if the
validity thereof shall currently be contested in good faith by appropriate
proceedings and if the Company shall have set aside on its books adequate
reserves with respect thereto; and provided, further, that the Company will pay
all such taxes, assessments, charges or levies forthwith upon the commencement
of proceedings to foreclose any lien which may have attached as security
therefor. The Company will promptly pay or cause to be paid when due, in
conformance with customary trade terms, all other obligations incident to the
operations of the Company.
4.4 MAINTENANCE OF PROPERTIES AND LEASES. The Company will keep its
properties and those of the Subsidiaries in good repair, working order and
condition, reasonable wear and tear excepted, and from time to time make all
needful and proper repairs, renewals, replacements, additions and improvements
thereto; and the Company and the Subsidiaries will at all times comply with each
material provision of all leases to which any of them is a party or under which
any of them occupies property if the breach of such provision might have a
material and adverse effect on the condition, financial or otherwise, or
operations of the Company.
4.5 INSURANCE. The Company will keep its assets and those of the
Subsidiaries which are of an insurable character insured by financially sound
and reputable insurers against loss or damage by fire, explosion and other risks
customarily insured against by companies in the Company's line of business, and
the Company will maintain, with financially sound and reputable insurers,
insurance against other hazards and risks and liability to persons and property
to the extent and in the manner customary for companies in similar businesses
similarly situated.
4.6 ACCOUNTS AND RECORDS. The Company will keep true records and books of
account in which full, true and correct entries will be made of all dealings or
transactions in relation to its business and affairs in accordance with
generally accepted accounting principles applied on a consistent basis.
4.7 INDEPENDENT ACCOUNTANTS. The Company will retain a "Big Six" national
accounting firm as its independent public accountants who shall certify the
Company's financial statements at the end of each fiscal year. In the event the
services of the independent public accountants so selected are terminated, the
Company will promptly thereafter notify the holders of Investor Stock and will
request the firm of independent public accountants whose services are terminated
to deliver to the Investors a letter from such firm setting forth the reasons
for the termination of their services. In the event of such termination, the
Company will promptly
13.
15
thereafter engage another "Big Six" national accounting firm as its independent
public accountants. In its notice to the holders of Investor Stock the Company
shall state whether the change of accountants was recommended or approved by the
Board of Directors of the Company or any committee thereof.
4.8 COMPLIANCE WITH LAWS. The Company and the Subsidiaries shall duly
observe and conform to all applicable laws and valid requirements of
governmental authorities relating to the conduct of their businesses or to their
properties or assets.
4.9 MAINTENANCE OF CORPORATE EXISTENCE, ETC. The Company shall maintain in
full force and effect its corporate existence, rights and franchises and all
licenses and other rights in patents, processes, licenses, trademarks, trade
names or copyrights owned or possessed by it or any Subsidiary and deemed by the
Company to be necessary to the conduct of their business.
4.10 PREEMPTIVE RIGHTS. In the event that the Company proposes to issue any
Common Stock or any other equity securities, the Company shall give not less
than thirty (30) days' prior written notice to the Specified Investors (as
defined below) setting forth the terms and conditions of such proposed issuance
(the "Issuance Notice"). The Specified Investors shall have the preemptive right
to purchase up to eighty percent (80%) of the securities so offered on the terms
and conditions set forth in the Issuance Notice by giving written notice to the
Company within fifteen (15) days after receipt of the Issuance Notice (the
"Election Period"). Each electing Specified Investor shall have the right to
purchase its pro rata share of the offered securities (determined by dividing
such Specified Investor's percentage interest in the Common Stock on a
fully-diluted basis by the aggregate percentage interest of all electing
Specified Investors in the Common Stock on a fully-diluted basis and multiplying
such quotient by eighty percent (80%) of the offered securities); provided,
however, that if any Specified Investor declines to exercise its preemptive
right in full, the remaining electing Specified Investors shall be entitled to
purchase such Specified Investor's unpurchased portion of the offered securities
on a pro rata basis. The Company may issue and sell all offered securities not
purchased by the Specified Investors on the terms and conditions set forth in
the Issuance Notice within ninety (90) days after the expiration of the Election
Period; provided, however, that any offered securities not sold within such
90-day period or any offered securities that are proposed to be sold on terms
and conditions less favorable to the Company than those set forth in the
Issuance Notice shall again be subject to the procedure set forth in this
Section 4.10 prior to issuance. The provisions of this Section 4.10 shall not
apply to any Permitted Issuance (as defined in Section 6 of Article Four of the
Company's Restated Certificate of Incorporation, as amended) or any issuance of
equity securities for non-cash consideration to non-Affiliates of the Company. A
Specified Investor may assign its rights pursuant to this Section 4.10 to one or
more of its Affiliates, subject only to compliance with applicable securities
laws. For purposes of this Section 4.10, a Specified Investor shall mean each of
the following Investors: Bessemer Venture Partners, WNA; BCV Partners WNA;
Boston Capital Ventures III, L.P.; Xxxxxx Fiber Properties, Inc.; Centennial
Entrepreneurs Fund V, L.P.; Centennial Fund IV, L.P.; Centennial Fund V, L.P.;
Centennial Holdings, Inc.; Centennial Holdings I, LLC; Fleet Equity Partners VI,
L.P.; Fleet Venture Resources, Inc.; GC&H Investments, Inc.; Norwest Equity
Partners V, L.P.; Providence Equity Partners II, L.P.; Providence
14.
16
Equity Partners L.P.; Telecom Partners, L.P. and WNA - DMG Investors, LLC.
ARTICLE 5
CORPORATE GOVERNANCE
5.1 BOARD OF DIRECTORS.
(a) Concurrently with the Closing and at all times thereafter, each
Stockholder agrees to vote all securities of the Company over which such
Stockholder has voting control and to take all other necessary or desirable
actions within its control (whether as a stockholder, director or officer of the
Company or otherwise, and including without limitation attendance at meetings in
person or by proxy for purposes of obtaining a quorum and execution of written
consents in lieu of meetings), and the Company shall take all necessary and
desirable actions within its control (including, without limitation, calling
special board and stockholder meetings), so that:
(i) the Company shall have a Board of Directors comprised of no
more than nine members;
(ii) the following persons shall be elected to the Board of
Directors:
(A) Two representatives of management, one of whom shall be
the Company's chief executive officer and one of whom shall be the Company's
President (the "Management Directors");
(B) Four representatives designated by the holders of the
outstanding Series A Preferred Stock (the "Series A Directors"), one of which
shall be designated by Centennial Fund IV, L.P. ("Centennial"), one of which
shall be designated by Telecom Partners, L.P., one of which shall be designated
by Norwest Equity Partners V and one of which shall be designated by Xxxxxx
Fiber Properties, Inc., in each case so long as such Investor and/or its
Affiliates continue to hold at least sixty-six and two-thirds percent (66-2/3%)
of the Series A Preferred Stock (or shares of underlying Common Stock) held by
such Investor on the date hereof;
(C) One representative designated by Providence Equity
Partners L.P. so long as Providence continues to hold, in the aggregate, at
least sixty-six and two-thirds percent (66-2/3%) of the Series B Preferred Stock
(or shares of underlying Common Stock) held by such Investor as of the date
hereof (the "Series B Director" and together with the Series A Directors, the
"Investor Directors"); and
(D) Up to two directors selected by the nominating committee
of the Board of Directors and approved by the Board and the holders of a
majority of the outstanding Investor Stock (the "Outside Directors"), such
approval not to be unreasonably withheld. It is intended that one such Outside
Director shall have significant business and/or
15.
17
technical experience in the internet or related industries and that such Outside
Director may be a representative of one of the Company's core internet service
provider affiliates.
(iii) in the event that any director for any reason ceases to
serve as a member of the Board during his term of office, the resulting vacancy
on the Board shall be filled by a majority of the Stockholders entitled to elect
such director as provided in this Section 5.1; and
(iv) if the Stockholders fail to designate a representative to
fill a directorship pursuant to the terms of this Section 5.1, except as
otherwise provided in the Company's certificate of incorporation, the election
of such director shall be accomplished in accordance with the Company's
certificate of incorporation and bylaws and applicable law.
(b) To the extent that such Stockholder does not have a representative
on the Board of Directors, each Significant Holder shall have the right to
designate a non-voting observer (an "Observer") to attend all meetings of the
Board.
(c) To the extent that any provision of the Company's certificate of
incorporation or by-laws is inconsistent with the provisions of this Agreement,
the Stockholders agree to take all actions necessary to effect such amendments
to the certificate of incorporation or by-laws as may be necessary and
appropriate to give full effect to the provisions of this Agreement.
5.2 MEETINGS OF THE BOARD. The Board of Directors will meet at least four
times each year in accordance with an agreed-upon schedule.
5.3 COMMITTEES. The audit committee previously established by the Board of
Directors shall not include any of the Management Directors. Centennial's
representative on the Board of Directors shall be a member of each of the audit
and nominating committees.
5.4 REIMBURSEMENT OF EXPENSES. The reasonable travel expenses of each
Investor Director or Observer incurred in attending or observing Board or
committee meetings shall be reimbursed by the Company. If, following the
Company's initial public offering, the Company adopts any plan or arrangement to
compensate its "outside" or "independent" directors generally for service as a
director either with cash or with stock options, then the Company will also
extend the same compensation to the Investor Directors and in the case of stock
options, such options shall be freely transferable by the Investor Directors to
their respective firms.
ARTICLE 6
MISCELLANEOUS
6.1 GOVERNING LAW. This Agreement shall be governed in all respects by the
laws of the State of Colorado as such laws are applied to agreements between
Colorado residents entered into and performed entirely in Colorado, except that
the General Corporation Law of the State of Delaware shall govern as to matters
of corporate law.
16.
18
6.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
6.3 ENTIRE AGREEMENT; AMENDMENT AND WAIVER. This Agreement and the
Purchase Agreement constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof. Neither this Agreement
nor any term hereof may be amended, waived, discharged or terminated except by a
written instrument signed by the Company and the holders of at least two-thirds
(2/3) of the outstanding Investor Stock, and any such amendment, waiver,
discharge or termination shall be binding on all the Stockholders; provided,
however, that no such amendment, waiver, discharge or termination, which applies
specifically to a named Stockholder to the exclusion of other Stockholders,
shall be binding on such Stockholder without a written instrument signed by such
Stockholder.
6.4 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by United States
first-class mail, postage prepaid, or delivered personally addressed by hand or
special courier (a) if to a Stockholder, to the address reflected in the
Company's stock ledger, or at such other address as such Stockholder shall have
furnished to the Company in writing, or (b) if to the Company, at 0000 X.
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, Attention: General
Counsel, or at such other address as the Company shall have furnished to each
Stockholder in writing. All such notices and other written communications shall
be effective (i) if mailed, five (5) days after mailing and (ii) if delivered,
upon delivery.
6.5 DELAYS OR OMISSIONS. No delay or omission to exercise any right, power
or remedy accruing to any Stockholder under this Agreement shall impair any such
right, power or remedy of such Stockholder nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofor or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any Stockholder of any breach or default
under this Agreement or any waiver on the part of any Stockholder of any
provisions or conditions of this Agreement must be made in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
Stockholder, shall be cumulative and not alternative.
6.6 SEVERABILITY. Unless otherwise expressly provided herein, a
Stockholder's rights hereunder are several rights, not rights jointly held with
any of the other Stockholders. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
6.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
17.
19
6.8 TERMINATION. The provisions of this Agreement (other than Article 2
hereof) shall terminate upon consummation of a Qualified Public Offering. The
provisions of Article 2 shall terminate on the tenth anniversary of the date
hereof.
6.9 SPECIFIC ENFORCEMENT. Any holder of Investor Stock shall be entitled
to specific enforcement of its rights under this Agreement. The parties
acknowledge that money damages would be an inadequate remedy for a breach of
this Agreement and consent to an action for specific performance or other
injunctive relief in the event of any such breach.
6.10 PRIOR AGREEMENT. The Stockholders Agreement among the Company and
certain of the Stockholders originally executed on December 5, 1996, as amended,
is hereby terminated and of no further force and effect.
18.
20
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Stockholders Agreement effective as of the day and year first above
written.
VERIO INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxx
Chief Executive Officer
INVESTORS:
CENTENNIAL FUND IV, L.P.
By: Centennial Holdings IV, L.P.
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
A General Partner
CENTENNIAL FUND V, L.P.
By: Centennial Holdings V, L.P.
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
A General Partner
CENTENNIAL ENTREPRENEURS FUND V, L.P.
By: Centennial Holdings V, L.P.
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
A General Partner
21
CENTENNIAL HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Title: Chairman
---------------------------------------
CENTENNIAL HOLDINGS I, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Title: Chairman
---------------------------------------
TELECOM PARTNERS, L.P.
By: Telecom Management LLC
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Managing Member
---------------------------------------
NORWEST EQUITY PARTNERS, V
A Minnesota Limited Liability Partnership
By: Itasca Partners V, L.L.P.
Its General Partner
By: Illegible
------------------------------------------
Title:
---------------------------------------
XXXXXX FIBER PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------------
Title: CEO
---------------------------------------
FLEET VENTURE RESOURCES, INC.
By: /s/ Xxxxxxx X. Balesco
------------------------------------------
Title: Vice President and CFO
---------------------------------------
22
FLEET EQUITY PARTNERS VI, L.P.
By: Growth Resources II, Inc.
Its Corporate General Partner
By: /s/ Xxxxxxx X. Balesco
------------------------------------------
Title: Vice President and CFO
---------------------------------------
PROVIDENCE EQUITY PARTNERS L.P.
By: Providence Equity Partners L.L.C.
A Delaware limited liability company
Its General Partner
By: /s/ Xxxx X. Xxxxx
------------------------------------------
Title: Managing Director
---------------------------------------
PROVIDENCE EQUITY PARTNERS II L.P.
By: Providence Equity Partners L.L.C.
A Delaware limited liability company
Its General Partner
By: /s/ Xxxx X. Xxxxx
------------------------------------------
Title: Managing Director
---------------------------------------
BESSEMER VENTURE PARTNERS, WNA
By: Bessemer Venture Partners IV L.P.
Its Managing General Partner
By: Deer IV & Co. LLC
Its General Partner
By: /s/ Xxxx Xxxxxx
------------------------------------------
Title: Manager
---------------------------------------
23
BOSTON CAPITAL VENTURES III, LIMITED
PARTNERSHIP
By: BD Partners Limited Partnership
By: /s/ Xxxxxx Xxxxxxxxxx
----------------------------------------
General Partner
BCV PARTNERS WNA
By: /s/ Xxxxxx Xxxxxxxxxx
----------------------------------------
General Partner
WNA - DMG INVESTORS, LLC
By:
---------------------------------------
Name:
---------------------------------------
Title:
/s/ Xxxx X. Xxxxxx
--------------------------------------------
Xxxx X. Xxxxxx
/s/ Xxxxx Xxxxxx
--------------------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxxxx X. Xxxxxx
--------------------------------------------
Xxxxxxxx X. Xxxxxx
/s/ Xxxxxx Xxxxxxxx
--------------------------------------------
Xxxxxx Xxxxxxxx
24
XXXXX X. XXXXXXXX TRUST, DTD 07/14/88
By:
----------------------------------------
Trustee:
BERKMAN ASSOCIATES, L.P.
By:
----------------------------------------
Partner
GC&H INVESTMENTS
By:
----------------------------------------
Title:
-------------------------------------
MANAGEMENT HOLDERS:
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxx
--------------------------------------------
Xxxx X. Xxxxxx
/s/ Xxxxx X. XxXxxxxx
--------------------------------------------
Xxxxx X. XxXxxxxx
/s/ Xxxxxxx Xxxxxxxx Xxxxx
--------------------------------------------
Xxxxxxx Xxxxxxxx Xxxxx
/s/ Xxxxx X. Xxxxxx
--------------------------------------------
Xxxxx X. Xxxxxx
25
/s/ Xxxxx X. Xxxxxxx
--------------------------------------------
Xxxxx X. Xxxxxxx
/s/ Xxxxx Xxxxxxx
--------------------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxx Xxxxx Xxxxxxxx
--------------------------------------------
Xxxxx Xxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxx
--------------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxx Xxxxxxx
--------------------------------------------
Xxxx Xxxxxxx
/s/ Xxxxxx Xxxxxx
--------------------------------------------
Xxxxxx Xxxxxx
26
TABLE OF CONTENTS
PAGE
ARTICLE 1 CERTAIN DEFINITIONS............................................................................1
ARTICLE 2 REGISTRATION RIGHTS............................................................................3
2.1 Demand Registrations...........................................................................3
2.2 Piggyback Registrations........................................................................5
2.3 Expenses of Registration.......................................................................5
2.4 Registration Procedures........................................................................6
2.5 Indemnification................................................................................7
2.6 Other Obligations..............................................................................9
2.7 Hold-Back Agreements...........................................................................9
2.8 Termination of Registration Rights............................................................10
ARTICLE 3 TRANSFER RESTRICTIONS.........................................................................10
3.1 Prohibition on Transfer.......................................................................10
3.2 Rights of First Refusal.......................................................................10
3.3 Right of First Offer..........................................................................11
3.4 Exempt Transactions...........................................................................11
ARTICLE 4 COVENANTS OF THE COMPANY......................................................................11
4.1 Basic Financial Information...................................................................11
4.2 Additional Information Rights.................................................................12
4.3 Prompt Payment of Taxes, Etc..................................................................13
4.4 Maintenance of Properties and Leases..........................................................13
4.5 Insurance.....................................................................................13
4.6 Accounts and Records..........................................................................13
4.7 Independent Accountants.......................................................................13
4.8 Compliance with Laws..........................................................................14
4.9 Maintenance of Corporate Existence, Etc.......................................................14
4.10 Preemptive Rights.............................................................................14
ARTICLE 5 CORPORATE GOVERNANCE..........................................................................15
5.1 Board of Directors............................................................................15
5.2 Meetings of the Board.........................................................................16
5.3 Committees....................................................................................16
5.4 Reimbursement of Expenses.....................................................................16
ARTICLE 6 MISCELLANEOUS.................................................................................17
6.1 Governing Law.................................................................................17
6.2 Successors and Assigns........................................................................17
6.3 Entire Agreement; Amendment and Waiver........................................................17
6.4 Notices, Etc..................................................................................17
6.5 Delays or Omissions...........................................................................17
6.6 Severability..................................................................................18
6.7 Counterparts..................................................................................18
i
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TABLE OF CONTENTS
CONTINUED
PAGE
6.8 Termination...................................................................................18
6.9 Specific Enforcement..........................................................................18
6.10 Prior Agreement...............................................................................18
ii
