EXHIBIT 10.5
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XxxxxxxXxxx.xxx, Inc.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
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This Agreement dated as of July 12, 1999, which amends and restates in its
entirety that certain Investor Rights Agreement dated as of November 6, 1998, is
entered into by and among XxxxxxxXxxx.xxx, Inc., a Delaware corporation (the
"Company"), Xxxxx Xxxxx, Xx Xxxxx, Xxxxxxx Xxxxx and Xxxxxxx Xxxxx
(collectively, the "Senior Managers" and, individually, a "Senior Manager"), the
entities listed on Exhibit A attached hereto (the "Purchasers") and the persons
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and entities listed on Exhibit B (the "Prior Holders").
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Recitals
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WHEREAS, the Company and the Prior Holders have entered into an Investor
Rights Agreement dated as of November 6, 1998 (the "Prior Agreement");
WHEREAS, in order to assure that rights of first refusal and registration
rights of the Prior Holders and the Purchasers are consistent, the Prior Holders
desire to amend and restate the Prior Agreement and the Purchasers desire to
become parties to this Agreement;
WHEREAS, the Company and the Purchasers have entered into a Series C
Convertible Preferred Stock Purchase Agreement of even date herewith (the
"Purchase Agreement") pursuant to which the Purchasers will purchase shares of
Series C Convertible Preferred Stock, $.01 par value per share (the "Series C
Shares"); and
WHEREAS, the Company, the Prior Holders and the Purchasers desire to
provide for certain arrangements with respect to (i) the registration of shares
of capital stock of the Company under the Securities Act of 1933, (ii) the
Purchasers' right of first refusal with respect to certain issuances of
securities of the Company and (iii) certain negative covenants of the Company;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Certain Definitions.
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As used in this Agreement, the following terms shall have the following
respective meanings:
"Commission" means the Securities and Exchange Commission, or any
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other federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $.01 par value per share, of
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the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
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or any successor federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Initiating Holders" means the Stockholders initiating a request for
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registration pursuant to Section 2(a), 2(b) or 2(c), as the case may be.
"Initial Public Offering" means the initial underwritten public
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offering of shares of Common Stock pursuant to an effective Registration
Statement.
"Other Holders" shall have the meaning set forth in Section 2.1(e).
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"Prior Preferred Shares" shall mean the shares of Series A Convertible
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Preferred Stock, $.01 par value per share (the "Series A Shares"), and the
shares of Series B Convertible Preferred Stock, $.01 par value per share (the
"Series B Shares"), owned by the Prior Holders on the date hereof.
"Prospectus" means the prospectus included in any Registration
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Statement, as amended or supplemented by an amendment or prospectus supplement,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
"Registration Statement" means a registration statement filed by the
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Company with the Commission for a public offering and sale of securities of the
Company (other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"Registration Expenses" means the expenses described in Section 2.4.
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"Registrable Shares" means (i) the shares of Common Stock issued or
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issuable upon conversion of the Series C Shares (the "Series C Registrable
Shares"), the Series B Shares (the "Series B Registrable Shares") and the Series
A Shares (the "Series A Registrable Shares"), (ii) any shares of Common Stock,
and any shares of Common Stock issued or issuable upon the conversion or
exercise of any other securities, acquired by the Purchasers pursuant to Section
3 of this Agreement, (iii) any other shares of Common Stock issued in respect of
such shares (because of stock splits, stock dividends, reclassifications,
recapitalizations, or similar events), and (iv) with respect to a registration
pursuant to Section 2.2, Common Stock held by the Senior Managers; provided,
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however, that shares of Common Stock which are Registrable Shares shall cease to
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be Registrable Shares upon (1) any sale pursuant to a Registration Statement or
Rule 144
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under the Securities Act or (2) any sale in any manner to a person or entity
which, by virtue of Section 5 of this Agreement, is not entitled to the rights
provided by this Agreement. Wherever reference is made in this Agreement to a
request or consent of holders of a certain percentage of Registrable Shares, the
determination of such percentage shall include shares of Common Stock issuable
upon conversion of the Shares even if such conversion has not been effected.
"Securities Act" means the Securities Act of 1933, as amended, or any
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successor federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Selling Stockholder" means any Stockholder owning Registrable Shares
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included in a Registration Statement.
"Series A Holder" means a holder of Series A Shares.
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"Series B Holder" means a holder of Series B Shares.
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"Shares" shall mean (i) the Series C Shares, (ii) the Series B Shares
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owned by the Purchasers, and (iii) the Prior Preferred Shares.
"Stockholders" means (i) the Purchasers and any persons or entities to
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whom the rights granted under this Agreement are transferred by any Purchasers,
their successors or assigns pursuant to Section 5 hereof, (ii) with respect to
registrations effected pursuant to Section 2.2, the Senior Managers and (iii)
the Prior Holders.
2. Registration Rights
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2.1 Required Registrations.
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(a) At any time after the earlier of (x) October 31, 2001 or (y)
six months following the closing of the Initial Public Offering, a Purchaser (or
Purchasers) holding in the aggregate at least 40% of the Series C Registrable
Shares and Series B Registrable Shares may request, in writing, that the Company
effect the registration on Form S-1 or Form S-2 (or any successor form) of
Series C Registrable Shares and Series B Registrable Shares owned by such
Purchaser (or Purchasers) having an aggregate value of at least $5,000,000
(based on the then current market price or fair value).
(b) At any time after six months following the closing of the
Initial Public Offering, a Prior Holder (or Prior Holders) holding in the
aggregate at least 40% of the Prior Preferred Registrable Shares may request, in
writing, that the Company effect the registration on Form S-1 or Form S-2 (or
any successor form) of Prior Preferred Registrable Shares owned by such Prior
Holder or Prior Holders having an aggregate value of at least $5,000,000 (based
on the then current market price or fair value).
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(c) At any time after the Company becomes eligible to file a
Registration Statement on Form S-3 (or any successor form relating to secondary
offerings), a Stockholder or Stockholders holding in the aggregate at least 10%
of the Registrable Shares may request, in writing, that the Company effect the
registration on Form S-3 (or such successor form), of Registrable Shares having
an aggregate value of at least $1,000,000 (based on the then current public
market price).
(d) Upon receipt of any request for registration pursuant to
this Section 2, the Company shall promptly give written notice of such proposed
registration to all other Stockholders. Such Stockholders shall have the right,
by giving written notice to the Company within 30 days after the Company
provides its notice, to elect to have included in such registration such of
their Registrable Shares as such Stockholders may request in such notice of
election, subject in the case of an underwritten offering to the approval of the
managing underwriter as provided in Section 2(e) below. Thereupon, the Company
shall, as expeditiously as possible, use its best efforts to effect the
registration on an appropriate registration form of all Registrable Shares which
the Company has been requested to so register (provided, however, that in the
case of a registration requested under Section 2.1(c), the Company will only be
obligated to effect such registration on Form S-3 (or any successor form)).
(e) If the Initiating Holders intend to distribute the
Registrable Shares covered by their request by means of an underwriting, they
shall so advise the Company as a part of their request made pursuant to Section
2.1(a), (b) or (c), as the case may be, and the Company shall include such
information in its written notice referred to in Section 2.1(d). The right of
any other Stockholder to include its Registrable Shares in such registration
pursuant to Section 2.1(a), (b) or (c), as the case may be, shall be conditioned
upon such other Stockholder's participation in such underwriting on the terms
set forth herein.
If the Company desires that any officers or directors of the Company
holding securities of the Company be included in any registration for an
underwritten offering requested pursuant to Section 2.1 or if other holders of
securities of the Company who are entitled, by contract with the Company, to
have securities included in such a registration (the "Other Holders") request
such inclusion, the Company may include the securities of such officers,
directors and Other Holders in such registration and underwriting on the terms
set forth herein. The Company shall (together with all Stockholders, officers,
directors and Other Holders proposing to distribute their securities through
such underwriting) enter into an underwriting agreement in customary form
(including, without limitation, customary indemnification and contribution
provisions on the part of the Company) with the managing underwriter.
Notwithstanding any other provision of this Section 2.1(e), if the managing
underwriter advises the Company that the inclusion of all shares requested to be
registered would adversely affect the offering, the securities of the Company
held by officers or directors of the Company (other than Registrable Shares) and
the securities held by Other Holders (other than Registrable Shares) shall be
excluded from such registration and underwriting to the extent deemed advisable
by the managing underwriter, and if a further
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limitation of the number of shares is required, the number of shares that may be
included in such registration and underwriting shall be allocated among all
holders of Registrable Shares requesting registration in proportion, as nearly
as practicable, to the respective number of Registrable Shares held by them at
the time of the request for registration made by the Initiating Holders pursuant
to Section 2.1(a), (b) or (c), as the case may be. If any holder of Registrable
Shares, officer, director or Other Holder who has requested inclusion in such
registration as provided above disapproves of the terms of the underwriting,
such person may elect to withdraw therefrom by written notice to the Company,
and the securities so withdrawn shall also be withdrawn from registration. If
the managing underwriter has not limited the number of Registrable Shares or
other securities to be underwritten, the Company may include securities for its
own account in such registration if the managing underwriter so agrees and if
the number of Registrable Shares and other securities which would otherwise have
been included in such registration and underwriting will not thereby be limited.
(f) The Initiating Holders shall have the right to select the
managing underwriter(s) for any underwritten offering requested pursuant to
Section 2.1(a), (b) or (c), subject to the approval of the Company, which
approval will not be unreasonably withheld.
(g) The Company shall not be required to effect more than two (2)
registrations pursuant to Section 2.1(a) and one (1) registration pursuant to
Section 2.1(b). In addition, the Company shall not be required to effect any
registration (other than on Form S-3 or any successor form relating to secondary
offerings) within six months after the effective date of any other Registration
Statement of the Company. For purposes of this Section 2.1(g), a Registration
Statement shall not be counted until such time as such Registration Statement
has been declared effective by the Commission (unless the Initiating Holders
withdraw their request for such registration (other than as a result of
information concerning the business or financial condition of the Company which
is made known to the Stockholders after the date on which such registration was
requested) and elect not to pay the Registration Expenses therefor pursuant to
Section 2.4).
(h) If at the time of any request to register Registrable Shares by
Initiating Holders pursuant to this Section 2.1, the Company is engaged or has
plans to engage in a registered public offering or is engaged in any other
activity which, in the good faith determination of the Company's Board of
Directors, would be adversely affected by the requested registration, then the
Company may at its option direct that such request be delayed for a period not
in excess of 90 days from the date of such request, such right to delay a
request to be exercised by the Company not more than once in any 12-month
period.
2.2 Incidental Registration.
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(a) Whenever the Company proposes to file a Registration
Statement (other than a Registration Statement filed pursuant to Section 2.1) at
any time and from time to time, it will, prior to such filing, give written
notice to all Stockholders of its intention to do so;
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provided, that no such notice need be given if no Registrable Shares are to be
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included therein as a result of a determination of the managing underwriter
pursuant to Section 2.2(b). Upon the written request of a Stockholder or
Stockholders given within 20 days after the Company provides such notice (which
request shall state the intended method of disposition of such Registrable
Shares), the Company shall use its best efforts to cause all Registrable Shares
which the Company has been requested by such Stockholder or Stockholders to
register to be registered under the Securities Act to the extent necessary to
permit their sale or other disposition in accordance with the intended methods
of distribution specified in the request of such Stockholder or Stockholders;
provided that the Company shall have the right to postpone or withdraw any
registration effected pursuant to this Section 2.2 without obligation to any
Stockholder.
(b) If the registration for which the Company gives notice pursuant
to Section 2.2(a) is a registered public offering involving an underwriting, the
Company shall so advise the Stockholders as a part of the written notice given
pursuant to Section 2.2(a). In such event, the right of any Stockholder to
include its Registrable Shares in such registration pursuant to Section 2.2
shall be conditioned upon such Stockholder's participation in such underwriting
on the terms set forth herein. All Stockholders proposing to distribute their
securities through such underwriting shall (together with the Company, Other
Holders, and any officers or directors distributing their securities through
such underwriting) enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for the underwriting by the Company.
Notwithstanding any other provision of this Section 2.2, if the managing
underwriter determines that the inclusion of all shares requested to be
registered would adversely affect the offering, the Company may limit the number
of Registrable Shares to be included in the registration and underwriting. The
Company shall so advise all holders of Registrable Shares requesting
registration, and the number of shares that are entitled to be included in the
registration and underwriting shall be allocated in the following manner. The
securities of the Company held by officers and directors of the Company (other
than Registrable Shares) shall be excluded from such registration and
underwriting to the extent deemed advisable by the managing underwriter, and, if
a further limitation on the number of shares is required, the number of shares
that may be included in such registration and underwriting shall be allocated
among all Stockholders and Other Holders requesting registration in proportion,
as nearly as practicable, to the respective number of shares of Common Stock (on
an as-converted basis) which they held at the time the Company gives the notice
specified in Section 2.2(a). If any Stockholder or Other Holder would thus be
entitled to include more securities than such holder requested to be registered,
the excess shall be allocated among other requesting Stockholders and Other
Holders pro rata in the manner described in the preceding sentence. If any
holder of Registrable Shares or any officer, director or Other Holder
disapproves of the terms of any such underwriting, such person may elect to
withdraw therefrom by written notice to the Company, and any Registrable Shares
or other securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration.
2.3 Registration Procedures.
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(a) If and whenever the Company is required by the provisions of
this Agreement to use its best efforts to effect the registration of any
Registrable Shares under the Securities Act, the Company shall:
(1) file with the Commission a Registration Statement with
respect to such Registrable Shares and use its best efforts to cause that
Registration Statement to become and remain effective for 180 days from the
effective date or such lesser period until all such Registrable Shares are sold;
(2) as expeditiously as possible prepare and file with the
Commission any amendments and supplements to the Registration Statement and the
prospectus included in the Registration Statement as may be necessary to comply
with the provisions of the Securities Act (including the anti-fraud provisions
thereof) and to keep the Registration Statement effective for 180 days from the
effective date or such lesser period until all such Registrable Shares are sold;
(3) as expeditiously as possible furnish to each Selling
Stockholder such reasonable numbers of copies of the Prospectus, including any
preliminary Prospectus, in conformity with the requirements of the Securities
Act, and such other documents as such Selling Stockholder may reasonably request
in order to facilitate the public sale or other disposition of the Registrable
Shares owned by such Selling Stockholder;
(4) as expeditiously as possible use its best efforts to
register or qualify the Registrable Shares covered by the Registration Statement
under the securities or Blue Sky laws of such states as the Selling Stockholders
shall reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the Selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the Selling Stockholder; provided, however, that the Company shall not be
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required in connection with this paragraph (iv) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction;
(5) as expeditiously as possible, cause all such
Registrable Shares to be listed on each securities exchange or automated
quotation system on which similar securities issued by the Company are then
listed;
(6) promptly provide a transfer agent and registrar for all
such Registrable Shares not later than the effective date of such registration
statement;
(7) promptly make available for inspection by the Selling
Stockholders, any managing underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney or accountant or other agent
retained by any such underwriter or selected by the Selling Stockholders, all
financial and other records, pertinent corporate documents and properties of the
Company and cause the Company's officers, directors,
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employees and independent accountants to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with such Registration Statement;
(8) as expeditiously as possible, notify each Selling
Stockholder, promptly after it shall receive notice thereof, of the time when
such Registration Statement has become effective or a supplement to any
Prospectus forming a part of such Registration Statement has been filed; and
(9) as expeditiously as possible following the
effectiveness of such Registration Statement, notify each seller of such
Registrable Shares of any request by the Commission for the amending or
supplementing of such Registration Statement or Prospectus.
(b) If the Company has delivered a Prospectus to the Selling
Stockholders and after having done so the Prospectus is amended to comply with
the requirements of the Securities Act, the Company shall promptly notify the
Selling Stockholders and, if requested, the Selling Stockholders shall
immediately cease making offers of Registrable Shares and return all
Prospectuses to the Company. The Company shall promptly provide the Selling
Stockholders with revised Prospectuses and, following receipt of the revised
Prospectuses, the Selling Stockholders shall be free to resume making offers of
the Registrable Shares.
(c) In the event that, in the judgment of the Company, it is
advisable to suspend use of a Prospectus included in a Registration Statement
due to pending material developments or other events that have not yet been
publicly disclosed and as to which the Company believes public disclosure would
be detrimental to the Company, the Company shall notify all Selling Stockholders
to such effect, and, upon receipt of such notice, each such Selling Stockholder
shall immediately discontinue any sales of Registrable Shares pursuant to such
Registration Statement until such Selling Stockholder has received copies of a
supplemented or amended Prospectus or until such Selling Stockholder is advised
in writing by the Company that the then current Prospectus may be used and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus. Notwithstanding anything
to the contrary herein, the Company shall not exercise its rights under this
Section 2.3(c) to suspend sales of Registrable Shares for a period in excess of
60 days in any 365-day period.
2.4 Allocation of Expenses. The Company will pay all Registration
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Expenses for all registrations under this Agreement; provided, however, that if
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a registration under Section 2.1 is withdrawn at the request of the Initiating
Holders (other than as a result of information concerning the business or
financial condition of the Company which is made known to the Stockholders after
the date on which such registration was requested) and if the Initiating Holders
elect not to have such registration counted as a registration requested under
Section 2.1, the requesting Stockholders shall pay the Registration Expenses of
such registration
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pro rata in accordance with the number of their Registrable Shares included in
such registration. For purposes of this Section, the term "Registration
Expenses" shall mean all expenses incurred by the Company in complying with this
Agreement, including, without limitation, all registration and filing fees,
exchange listing fees, printing expenses, fees and expenses of counsel for the
Company and the fees and expenses of one counsel selected by the Selling
Stockholders to represent the Selling Stockholders, state Blue Sky fees and
expenses, and the expense of any special audits incident to or required by any
such registration, but excluding underwriting discounts, selling commissions and
the fees and expenses of Selling Stockholders' own counsel (other than the
counsel selected to represent all Selling Stockholders).
2.5 Indemnification and Contribution.
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(a) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless the seller of such Registrable Shares, each
underwriter of such Registrable Shares, and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities Act or
the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such seller, underwriter or controlling person may become
subject under the Securities Act, the Exchange Act, state securities or Blue Sky
laws or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) 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 Registrable Shares were registered under the
Securities Act, any preliminary prospectus or final prospectus contained in the
Registration Statement, or any amendment or supplement to such Registration
Statement, or arise out of or are based upon the omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and the Company will reimburse such seller,
underwriter and each such controlling person for any legal or any other expenses
reasonably incurred by such seller, underwriter or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
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any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement or omission made in such
Registration Statement, preliminary prospectus or prospectus, or any such
amendment or supplement, in reliance upon and in conformity with information
furnished to the Company, in writing, by or on behalf of such seller,
underwriter or controlling person specifically for use in the preparation
thereof.
(b) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, each seller of
Registrable Shares, severally and not jointly, will indemnify and hold harmless
the Company, each of its directors and officers and each underwriter (if any)
and each person, if any, who controls the Company or any such underwriter within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages or liabilities, joint or several, to which the Company, such
directors and officers, underwriter or controlling person may become subject
under the Securities Act,
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Exchange Act, state securities or Blue Sky laws or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement under which such
Registrable Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained in the Registration Statement, or any
amendment or supplement to the Registration Statement, or arise out of or are
based upon any omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not misleading, if
the statement or omission was made in reliance upon and in conformity with
information relating to such seller furnished in writing to the Company by or on
behalf of such seller specifically for use in connection with the preparation of
such Registration Statement, prospectus, amendment or supplement; provided,
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however, that the obligations of a Stockholder hereunder shall be limited to an
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amount equal to the net proceeds to such Stockholder of Registrable Shares sold
in connection with such registration.
(c) Each party entitled to indemnification under this Section
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
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Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
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give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section except to the extent that the Indemnifying Party
is adversely affected by such failure. The Indemnified Party may participate in
such defense at such party's expense; provided, however, that the Indemnifying
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Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding; provided further that in
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no event shall the Indemnifying Party be required to pay the expenses of more
than one law firm per jurisdiction as counsel for the Indemnified Party. The
Indemnifying Party also shall be responsible for the expenses of such defense if
the Indemnifying Party does not elect to assume such defense. No Indemnifying
Party, in the defense of any such claim or litigation shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect of such claim or litigation, and no Indemnified Party
shall consent to entry of any judgment or settle such claim or litigation
without the prior written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 2.5 is
due in accordance with its terms but for any reason is held to be unavailable to
an Indemnified Party in respect to any losses, claims, damages and liabilities
referred to herein, then the Indemnifying Party shall,
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Amended & Restates Investor Rights Agreement
in lieu of indemnifying such Indemnified Party, contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities to which such party may be subject in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and the
Stockholders on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company and the
Stockholders shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of material fact related to information
supplied by the Company or the Stockholders and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Stockholders agree that it would not
be just and equitable if contribution pursuant to this Section 2.5 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph of Section 2.5, (a) in no case
shall any one Stockholder be liable or responsible for any amount in excess of
the net proceeds received by such Stockholder from the offering of Registrable
Shares and (b) the Company shall be liable and responsible for any amount in
excess of such proceeds; provided, however, that no person guilty of fraudulent
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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. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section, notify such party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties from whom contribution may be sought shall not relieve such
party from any other obligation it or they may have thereunder or otherwise
under this Section. No party shall be liable for contribution with respect to
any action, suit, proceeding or claim settled without its prior written consent,
which consent shall not be unreasonably withheld.
2.6 Other Matters with Respect to Underwritten Offerings. In the
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event that Registrable Shares are sold pursuant to a Registration Statement in
an underwritten offering pursuant to Section 2.1, the Company agrees to (a)
enter into an underwriting agreement containing customary representations and
warranties with respect to the business and operations of the Company and
customary covenants and agreements to be performed by the Company, including
without limitation customary provisions with respect to indemnification by the
Company of the underwriters of such offering; (b) use its best efforts to cause
its legal counsel to render customary opinions to the underwriters with respect
to the Registration Statement; and (c) use its best efforts to cause its
independent public accounting firm to issue customary "cold comfort letters" to
the underwriters with respect to the Registration Statement.
2.7 Information by Holder. Each holder of Registrable Shares included
---------------------
in any registration shall furnish to the Company such information regarding such
holder and the distribution proposed by such holder as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement.
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Amended & Restated Investor Rights Agreement
2.8 "Stand-Off " Agreement; Confidentiality of Notices. Each
--------------------------------------------------
Stockholder, if requested by the Company and the managing underwriter of an
offering by the Company of Common Stock or other securities of the Company,
agrees not to sell or otherwise transfer or dispose of any Registrable Shares or
other securities of the Company held by such Stockholder for a period of 180
days following the effective date of a Registration Statement; provided, that:
--------
(a) such agreement shall only apply to the initial public
offering of Common Stock of the Company sold in an underwritten offering; and
(b) all stockholders of the Company then holding at least 5% of
the outstanding Common Stock (on an as-converted basis) and all officers and
directors of the Company enter into similar agreements.
The Company may impose stop-transfer instructions with respect to the
Registrable Shares or other securities subject to the foregoing restriction
until the end of such 180-day period. Any Stockholder receiving any written
notice from the Company regarding the Company's plans to file a Registration
Statement shall treat such notice confidentially and shall not disclose such
information to any person other than as necessary to exercise its rights under
this Agreement.
2.9 Limitations on Subsequent Registration Rights. The Company shall
---------------------------------------------
not, without the prior written consent of Stockholders holding at least 66 2/3%
of the Registrable Shares then held by all Stockholders, enter into any
agreement (other than this Agreement) with any holder or prospective holder of
any securities of the Company which grant such holder or prospective holder
rights to include securities of the Company in any Registration Statement,
unless (a) such rights to include securities in a registration initiated by the
Company or by Stockholders are not more favorable than the rights granted to
Other Holders under Sections 2.1 and 2.2 of this Agreement, and (b) any such
rights to initiate a registration provide that Stockholders are entitled to
include Registrable Shares on a pro rata basis with such holders based on the
number of shares of Common Stock (on an as-converted basis) owned by
Stockholders and such holders.
2.10 Rule 144 Requirements. After the earliest of (i) the closing of
---------------------
the sale of securities of the Company pursuant to a Registration Statement, (ii)
the registration by the Company of a class of securities under Section 12 of the
Exchange Act, or (iii) the issuance by the Company of an offering circular
pursuant to Regulation A under the Securities Act, the Company agrees to:
(a) make and keep current public information about the Company
available, as those terms are understood and defined in Rule 144;
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Amended & Restated Investor Rights Agreement
(b) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); and
(c) furnish to any holder of Registrable Shares upon request
(i) a written statement by the Company as to its compliance with the reporting
requirements of Rule 144 and of the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), (ii) a copy of
the most recent annual or quarterly report of the Company, and (iii) such other
reports and documents of the Company as such holder may reasonably request to
avail itself of any similar rule or regulation of the Commission allowing it to
sell any such securities without registration.
2.11 Termination. All of the Company's obligations to register
-----------
Registrable Shares under Sections 2.1 and 2.2 of this Agreement shall terminate
five years after the closing of the Initial Public Offering.
3. Right Of First Refusal
3.1 Rights of Purchasers and Prior Holders
--------------------------------------
(a) The Company shall not issue, sell or exchange, agree to
issue, sell or exchange, or reserve or set aside for issuance, sale or exchange,
(i) any shares of its Common Stock, (ii) any other equity securities of the
Company, including, without limitation, shares of preferred stock, (iii) any
option, warrant or other right to subscribe for, purchase or otherwise acquire
any equity securities of the Company, or (iv) any debt securities convertible
into capital stock of the Company (collectively, the "Offered Securities"),
unless in each such case the Company shall have first complied with this Section
3.1. The Company shall deliver to each Stockholder a written notice of any
proposed or intended issuance, sale or exchange of Offered Securities (the
"Offer"), which Offer shall (i) identify and describe the Offered Securities,
(ii) describe the price and other terms upon which they are to be issued, sold
or exchanged, and the number or amount of the Offered Securities to be issued,
sold or exchanged, (iii) identify the persons or entities (if known) to which or
with which the Offered Securities are to be offered, issued, sold or exchanged,
(iv) offer to issue and sell to or exchange with the Purchasers (the "Purchaser
Offered Securities"), the Series B Holders (the "Series B Offered Securities")
and the Series A Holders (the "Series A Offered Securities") such aggregate
number of the Offered Securities as would be necessary to permit each Purchaser
and Prior Holder to maintain its same proportionate equity ownership in the
Company as of the date of the Offer determined on an "as converted to Common
Stock" basis (the Purchaser Offered Securities, the Series B Offered Securities
and the Series A Offered Securities being collectively referred to as the
"Subject Offered Securities"). The Subject Offered Securities shall be eligible
for issuance, sale or exchange with Stockholders as follows: (A) each Purchaser
and Prior Holder may subscribe for its portion of the Offered Securities
determined by dividing the aggregate number of shares of Common Stock then held
by such Purchaser or Prior Holder (giving effect to the conversion of all shares
of convertible preferred stock then held) by the total number of shares of
Common Stock then outstanding (giving effect to the conversion of
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Amended & Restated Investor Rights Agreement
all shares of convertible preferred stock then held) by the total number of
shares of Common Stock then outstanding (giving effect to the conversion of all
outstanding shares of convertible preferred stock) (the "Basic Amount"); and (B)
any additional portion of the Subject Offered Securities attributable to the
Basic Amounts of other Purchasers and Prior Holders as such Purchaser or Prior
Holder shall indicate it will purchase or acquire should the other Purchasers
and Prior Holders subscribe for less than their Basic Amounts (the
"Undersubscription Amount"), provided that if the additional portion of the
Offered Securities indicated to be purchased by the Purchasers and Prior Holders
exceeds the Undersubscription Amount, the Undersubscription Amount shall be
allocated among such Purchasers and Prior Holders in proportion to the
additional portion indicated to be purchased by each (but not more than each has
requested), or as they may otherwise agree among themselves.
(b) To accept an Offer, in whole or in part, a Stockholder must
deliver a written notice to the Company prior to the end of the 30-day period of
the Offer, setting forth the portion of the Stockholder's Basic Amount that such
Stockholder elects to purchase and, if such Stockholder shall elect to purchase
all of its Basic Amount, the Undersubscription Amount (if any) that such
Stockholder elects to purchase (the "Notice of Acceptance").
(c) The Company may issue all or any part of the Offered
Securities which are not Subject Offered Securities (the "Non-Subject Offered
Securities") at any time after delivery of the Offer until 90 days from the
expiration of the period set forth in Section 3.1(b) above, but only to the
offerees or purchasers described in the Offer (if so described therein) and only
upon terms and conditions (including, without limitation, unit prices and
interest rates) which are not more favorable, in the aggregate, to the acquiring
person or persons or less favorable to the Company than those set forth in the
Offer. The Company shall have 90 days from the expiration of the period set
forth in Section 3.1(b) above to issue, sell or exchange all or any part of such
Subject Offered Securities as to which a Notice of Acceptance has not been given
by the Stockholders (the "Refused Securities"), but only to the offerees or
purchasers described in the Offer (if so described therein) and only upon terms
and conditions (including, without limitation, unit prices and interest rates)
which are not more favorable, in the aggregate, to the acquiring person or
persons or less favorable to the Company than those set forth in the Offer.
(d) In the event the Company shall propose to sell less than
all the Non-Subject Offered Securities (any such sale to be in the manner and on
the terms specified in Section 3.1(c) above), then each Stockholder may, at its
sole option and in its sole discretion, reduce the number or amount of the
Subject Offered Securities specified in its Notice of Acceptance to an amount
that shall be not less than the number or amount of the Subject Offered
Securities that the Stockholder elected to purchase pursuant to Section 3.1(b)
above multiplied by a fraction, (i) the numerator of which shall be the number
or amount of Non-Subject Offered Securities the Company actually proposes to
issue, sell or exchange and (ii) the denominator of which shall be the original
amount of the Non-Subject Offered Securities. In the event that any Stockholder
so elects to reduce the number or amount of Subject Offered Securities specified
in
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Amended & Restated Investor Rights Agreement
its Notice of Acceptance, the Company may not issue, sell or exchange more than
the reduced number or amount of the Offered Securities unless and until such
securities have again been offered to the Stockholders in accordance with
Section 3.1(a) above.
(e) Upon the closing of the issuance, sale or exchange of all
or less than all of the Refused Securities, the Stockholders shall acquire from
the Company, and the Company shall issue to the Stockholders, the number or
amount of Subject Offered Securities specified in the Notices of Acceptance, as
reduced pursuant to Section 3.1(d) above if the Stockholders have so elected,
upon the terms and conditions specified in the Offer. The purchase by the
Stockholders of any Subject Offered Securities is subject in all cases to the
preparation, execution and delivery by the Company and the Stockholders of a
purchase agreement relating to such Subject Offered Securities reasonably
satisfactory in form and substance to the Stockholders and their respective
counsel.
(f) Any Offered Securities not acquired by the Stockholders or
other persons in accordance with Section 3.1(c) above may not be issued, sold or
exchanged until they are again offered to the Stockholders under the procedures
specified in this Agreement.
(g) The rights of the Stockholders under this Section 3 shall
not apply to:
(1) Common Stock issued as a stock dividend to holders of
Common Stock or upon any subdivision or combination of shares of Common Stock;
(2) the issuance of any shares of Common Stock upon
conversion of shares of convertible preferred stock;
(3) the issuance of up to Two Million Five Hundred Forty-
Eight Thousand (2,548,000) shares of Common Stock, or the grant of options
therefor, including shares issued upon exercise of options outstanding on the
date of this Agreement (such number to be proportionately adjusted in the event
of any stock splits, stock dividends, recapitalizations or similar events
occurring on or after the date of this Agreement) issuable to officers,
directors, consultants and employees of the Company or any subsidiary pursuant
to any plan, agreement or arrangement approved by a vote of not less than a
majority of the Board of Directors of the Company (it being understood that any
shares subject to options that expire or terminate unexercised shall not count
towards the maximum number set forth in this clause (3));
(4) securities issued solely in consideration for the
acquisition (whether by merger or otherwise) by the Company or any of its
subsidiaries of all or substantially all of the stock or assets of any other
entity;
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Amended & Restated Investor Rights Agreement
(5) shares of Common Stock sold by the Company in an
underwritten public offering pursuant to an effective registration statement
under the Securities Act;
(6) up to 5,000 shares of Common Stock issued or issuable
upon exercise of any warrants issued to Silicon Valley Bank;
(7) up to 125 Series B Shares, or shares of Common Stock
issuable upon conversion of such Series B Shares, issuable to Education
Products, Inc. or its parent, Sylvan Learning Systems, Inc. ("Sylvan") pursuant
to that certain letter agreement, dated July 23, 1997, between Sylvan and the
Company;
(8) warrants to purchase up to 105,700 shares, or shares
of Common Stock issuable upon exercise of such warrants, issued or issuable to
EduVentures;
(9) warrants to purchase up to 38,000 shares of Common
Stock, or up to 38,000 shares of Common Stock issuable upon exercise of any such
warrants, issuable to X. X. Xxxxxxx Co. pursuant to that Contract for Services
and Term Sheet dated September 29, 1998.
(10) warrants to purchase up to 75,000 shares, or up to
75,000 shares of Common Stock issuable upon exercise of any warrants, issuable
to National Computer Systems, Inc.; and
(11) warrants to purchase Series C Convertible Preferred
Stock, or shares of Series C Convertible Preferred Stock issuable upon exercise
of any warrants, or shares of Common Stock issuable upon conversion of Series C
Convertible Preferred Stock, issuable pursuant to that certain letter agreement,
dated March 19, 1999, between Xxxxxx Xxxxxx Partners LLC and the Corporation.
3.2 Initial Public Offering.
-----------------------
(a) Right of First Refusal. Subject to the limitations set
----------------------
forth in this Section 3.2, the Company hereby grants to each Purchaser a right
of first refusal to purchase such Purchaser's Proportionate Share of the shares
of Common Stock from the shares of Common Stock to be issued at the closing of
the Company's Initial Public Offering, if any (the "IPO Shares"). The price per
share of Common Stock which each such Purchaser becomes entitled to purchase by
reason hereof shall be the public offering price per share of Common Stock in
the Initial Public Offering (the "Offering Price").
(b) Limitations. Subject to the limitations set forth in the following
-----------
sentence, the "Proportionate Share" for each such Purchaser shall be that number
of IPO Shares necessary so that, after giving effect to such issuance,
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Amended & Restated Investor Rights Agreement
the IPO Shares issued to such Purchaser, plus
the shares of Common Stock of such Purchaser (including without limitation
any right to acquire shares upon conversion of Series C Shares) which
shares were issued or issuable to such Purchaser with respect to such
Purchaser's Series C Shares (such Purchaser's "Series C Derived Shares"),
determined after giving effect to such issuance,
shall equal the same proportionate equity ownership in the Company as was
represented by such Purchaser's Series C Derived Shares as of the date
immediately prior to the effective date of the registration statement covering
the Initial Public Offering, on a fully diluted basis assuming, among other
things, the shares reserved for issuance upon the exercise of options have been
issued. Notwithstanding the foregoing sentence, such Proportionate Share, in
the aggregate for all Purchasers, may not exceed 8% of the number of shares of
Common Stock issued by the Company in the Initial Public Offering (exclusive of
the number of shares of Common Stock issued pursuant to any underwriter's
overallotment option); provided, however, the managing underwriter of such
-------- -------
offering shall be entitled to reduce in whole or in part the Proportionate Share
to the extent determined necessary by the managing underwriter in its sole
discretion (X) to the success of such offering (including without limitation
that purchase by a Purchaser of its Proportionate Share would adversely affect
any of the offering price, offering size, likelihood of completion or completion
date) for reasons set forth in writing to the Purchasers no less than five days
prior to the anticipated effective date of the registration statement covering
such offering or (Y) to comply with the rules or regulations of the Securities
and Exchange Commission, the National Association of Securities Dealers, Inc.,
the Nasdaq Stock Market, Inc., or other regulatory body or exchange for reasons
set forth in writing to the requesting Purchasers no less than one day prior to
the anticipated effective date of the registration statement covering such
offering. Any reduction (in whole or in part) in any Purchaser's Proportionate
Share shall be pro rata among the Purchasers expressing an interest in receiving
an offer from the Company in accordance with subsection 3.2(d) below (the "IPO
Purchasers") based upon the number of Series C Derived Shares then held by the
IPO Purchasers.
(c) Solicitation of Interest. Except as (and to the extent)
------------------------
prohibited by law, the Company shall, no less than one day prior to the
anticipated effective date of the registration statement covering the Initial
Public Offering, deliver by facsimile transmission to the Purchasers holding
Series C Shares a notice (a "Solicitation of Interest") with respect to the
Initial Public Offering stating the Company's bona fide intention to offer
shares of Common Stock in the Initial Public Offering. The Company shall send
the Solicitation of Interest to each such Purchaser at the fax number for such
Purchaser set forth in the Company's corporate records or such other fax number
that such Purchaser shall from time to time specify in writing to the Company.
(d) Expression of Interest. Each such Purchaser shall, on or before
----------------------
5:00 p.m. (Boston time) on the immediately succeeding business day after receipt
of the Solicitation of Interest (the "Expression of Interest Deadline"), by
facsimile transmission to the Company and
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Amended & Restated Investor Rights Agreement
its counsel, notify the Company of its desire (an "expression of interest") in
receiving an offer to purchase (i) all or part of its Proportionate Share
(specifying, if less than its Proportionate Share, the number of shares it
desires to receive an offer to purchase) and (ii) a number of shares, if any, in
excess of such Purchaser's Proportionate Share that it desires to receive an
offer to purchase (the "Excess Shares"), subject in each case to the limitations
set forth in this Section 3.2. A Purchaser shall be deemed to have waived its
right to receive an offer to purchase any of the shares in the Initial Public
Offering if the Company does not receive the Purchaser's expression of interest
as aforesaid by the Expression of Interest Deadline. The Company may, during the
60-day period after expiration of the Expression of Interest Deadline, either
solicit expression of interests from any person or persons with respect to that
portion of such Common Stock for which the such Purchasers have not made an
expression of interest or determine not to offer or sell such portion, in whole
or in part; provided, however, if the Company does not consummate the sale of
-------- -------
the IPO Shares in the Initial Public Offering within 60 days of the Solicitation
of Interest, the right provided hereunder shall be deemed revived as to all
Purchasers holding Series C Shares. If any Purchaser expresses an interest in
receiving an offer to purchase a number of shares that is less than its
Proportionate Share (or is deemed to waive its right to receive an offer to
purchase its Proportionate Share in the Initial Public Offering), each IPO
Purchaser requesting Excess Shares, if any, shall be entitled to receive an
offer from the Company for that number of additional shares equal to the lesser
of (A) the number of Excess Shares with respect to which such IPO Purchaser
expressed an interest and (B) such IPO Purchaser's allocable portion of all
Excess Shares based on the number of Excess Shares requested to be purchased by
each IPO Purchaser.
(e) An IPO Purchaser's notification pursuant to subsection 3.2(d)
shall be deemed an expression of interest in receiving an offer by the Company
to purchase the number of shares of Common Stock indicated by such IPO Purchaser
pursuant to subsection 3.2(d) above (including any Excess Shares), in each case
subject to the limitations set forth in this Section 3.2. The Company's offer
to sell such shares to the IPO Purchasers shall be deemed to occur automatically
two hours after the latest to occur of (A) the effectiveness of the registration
statement covering the Initial Public Offering and (B) the Company's
determination of the Offering Price (the completion of the last to occur of the
foregoing, the "Offer Commencement"). Each IPO Purchaser shall have an
unconditional right to withdraw its expression of interest by written notice to
the Company on or before the Offer Commencement. Once so withdrawn, the Company
shall have no obligation to offer or to sell, and the IPO Purchaser shall have
no obligation to purchase, any shares. An IPO Purchaser's expression of
interest shall, unless so withdrawn by such IPO Purchaser on or before the Offer
Commencement, automatically be deemed to be a binding commitment to purchase the
shares of Common Stock, including any Excess Shares, indicated by such IPO
Purchaser pursuant to subsection 3.2(d) above, but subject to the limitations
set forth in this Section 3.2 immediately after the Offer Commencement. The IPO
Purchasers' purchase of such shares shall occur simultaneously with the closing
of the purchase and sale of the other shares of Common Stock distributed in the
Initial Public Offering pursuant to a stock purchase agreement in form
satisfactory to the Company, and each IPO Purchaser shall thereat pay the
purchase price for its shares by wire transfer to the Company of
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Amended & Restated Investor Rights Agreement
immediately available funds. As promptly as practicable (and in any event within
ten days) thereafter, the Company shall issue and deliver to each IPO Purchaser
at the last known address of the IPO Purchaser in the records of the Company a
certificate or certificates for such shares.
(f) Notwithstanding anything in this Agreement to the contrary, the
Company shall not be required to take any actions pursuant to this Section 3.2
that would be inconsistent with any federal or state securities laws, rules,
regulations or interpretations (including without limitation Rule 134 under the
Securities Act) or the rules or regulations of the National Association of
Securities Dealers, Inc., the NASDAQ Stock Market, Inc. or other regulatory body
or exchange.
(g) The Purchasers agree that none of the Company or its officers,
directors, employees, shareholders, affiliates, successors, transferees,
assigns, agents or representatives or any underwriter shall have any liability
to the Purchasers arising in connection with any reduction or elimination of any
Proportionate Share taken in accordance with subsection 3.2(b) except to the
extent arising out of the Company's bad faith.
3.3 Termination. This Section 3 shall terminate upon the earlier
-----------
of the following events:
(a) the sale of all or substantially all of the assets or
business of the Company, by merger, sale of assets or otherwise; or
(b) immediately after the Offer Commencement (assuming the
Company has complied with its obligations in Section 3.2).
4. Negative Covenants. So long as at least 1,375 shares of Series B
------------------
Preferred Stock or at least 1,000,000 shares of Series C Preferred Stock (in
each case subject to appropriate adjustment in the event of any dividend, stock
split, combination or similar recapitalization affecting such shares) shall be
outstanding, the Company shall not, without first obtaining the affirmative vote
or written consent of the holders of not less than a majority of the then
outstanding shares of Series B Preferred Stock and Series C Preferred Stock
voting together as a single class:
(a) amend the Certificate of Incorporation of the Company;
(b) declare or pay any dividends or distributions on Common
Stock other than dividends payable solely in Common Stock;
(c) make (or permit any corporation, a majority of the voting
stock of which is owned or controlled by the Company, to make) any loan or
advance to, or own any
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Amended & Restated Investor Rights Agreement
stock or other securities of, any subsidiary or other corporation, partnership,
or other entity unless it is wholly owned by the Company;
(d) make any loan or advance to any person, including, without
limitation, any employee or director of the Company or any subsidiary, except
advances and similar expenditures in the ordinary course of business or under
the terms of an employee stock or option plan approved by the Board of
Directors;
(e) incur any indebtedness for borrowed money after the date
hereof in excess of $1,000,000 in the aggregate:
(f) guarantee directly or indirectly, any indebtedness or
obligations except for trade accounts of any subsidiary arising in the ordinary
course of business;
(g) merge with or into or consolidate with any other
corporation;
(h) sell, lease, or otherwise dispose of all or any substantial
portion of its properties or assets;
(i) acquire all or substantially all of the properties, assets
or stock of any other corporation or entity (except for a consideration of less
than 10% of the Company's consolidated net worth as of the end of the prior
fiscal quarter);
(j) voluntarily liquidate or dissolve;
(k) amend any provision of, or add any provision to, the
Company's By-Laws which would adversely affect the Series C Shares or the Series
B Shares; or
(l) apply any of its assets to the redemption, retirement,
purchase or acquisition, directly or indirectly, of any shares of its Common
Stock (other than purchases of Common Stock from employees, directors or
consultants, at cost, upon termination of their employment or services).
5. Transfers of Rights. This Agreement, and the rights and obligations of
-------------------
each Stockholder hereunder, may be assigned by such Stockholder only to (i) any
person or entity to which at least 1,000,000 Series C Shares or 750 Series B
Shares are transferred by such Stockholder or (ii) to any partner or stockholder
of such Stockholder, and such transferee shall be deemed a "Purchaser" or "Prior
Holder," as applicable for purposes of this Agreement; provided that the
transferee provides written notice of such assignment to the Company and agrees
in writing to be bound hereby.
6. General.
-------
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Amended & Restated Investor Rights Agreement
(a) Severability. The invalidity or unenforceability of any
------------
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(b) Specific Performance. In addition to any and all other
--------------------
remedies that may be available at law in the event of any breach of this
Agreement, each Purchaser shall be entitled to specific performance of the
agreements and obligations of the Company hereunder and to such other injunctive
or other equitable relief as may be granted by a court of competent
jurisdiction.
(c) Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the Commonwealth of
Massachusetts (without reference to the conflicts of law provisions thereof).
(d) Notices. All notices, requests, consents, and other
-------
communications under this Agreement shall be in writing and shall be deemed
delivered (i) two business days after being sent by registered or certified
mail, return receipt requested, postage prepaid or (ii) one business day after
being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery, in each case to the intended recipient as set forth
below:
If to the Company, at 000 Xxxxxxxx Xxx., Xxxxxxx, XX 00000, Attention:
President, or at such other address or addresses as may have been furnished in
writing by the Company to the Purchasers, with a copy to Xxxxxxx Xxxxxxxx, c/x
Xxxxxx, Gesmer & Xxxxxxxxx, LLP, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000; or
If to a Stockholder, at his or its address set forth on Exhibit A, or at
---------
such other address or addresses as may have been furnished to the Company in
writing by such Stockholder, with a copy to Xxx X. Xxxxxxxx, Xxxx and Xxxx LLP,
00 Xxxxx Xxxxxx, Xxxxxx, XX 00000.
Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section.
(e) Complete Agreement. This Agreement constitutes the entire
------------------
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings relating to
such subject matter.
(f) Amendments and Waivers. Any term of this Agreement may be
----------------------
amended or terminated and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively), with the written
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Amended & Restated Investor Rights Agreement
consent of the Company and the holders of at least 66 2/3% of the Registrable
Shares held by all of the Stockholders; provided, that this Agreement may be
--------
amended with the consent of the holders of less than all Registrable Shares
(including for this purpose the Senior Managers) only in a manner which affects
all such holders in the same fashion. Any such amendment, termination or waiver
effected in accordance with this Section 6(f) shall be binding on all parties
hereto, even if they do not execute such consent. No waivers of or exceptions to
any term, condition or provision of this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.
(g) Pronouns. Whenever the context may require, any pronouns used in
--------
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.
(h) Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed in any number of counterparts, each of which shall be deemed to be an
original, and all of which together shall constitute one and the same document.
This Agreement may be executed by facsimile signatures.
(i) Section Headings. The section headings are for the
----------------
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.
(j) Waiver of Right of First Refusal: By execution of this
--------------------------------
Agreement, and only with respect to (i) the Purchase Agreement, and (ii) the
issuance of a Warrant to EduVentures to purchase 95,700 shares of Common Stock,
each of the Prior Holders, North Bridge Venture Partners II, L.P. and
Commonwealth Capital Ventures II, L.P. hereby waives his or its right of first
refusal pursuant to Section 3 of the Prior Agreement.
(k) Termination and Amendment of Other Agreements: By execution
---------------------------------------------
of this Agreement, the Company and the Prior Holders do hereby amend and restate
the Prior Agreement pursuant to Section 6(f) thereof.
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Amended & Restated Investor Rights Agreement
Executed as of the date first written above.
COMPANY:
XxxxxxxXxxx.xxx, Inc.
By: /s/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
-----------------------------
Title: CEO
----------------------------
PURCHASERS:
BRIGHTER VISION HOLDINGS, INC.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxxx
-----------------------------
Title: Asst. Secretary
----------------------------
INTEL CORPORATION
By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxx
-----------------------------
Title: Vice President and Treasurer
----------------------------
XXX XXXXXXX CAPITAL MANAGEMENT
By: /s/ Xxxxxxx Xxx Xxxxxxx
---------------------------------
Name: Xxxxxxx Xxx Xxxxxxx
-----------------------------
Title: President
----------------------------
-23-
Amended & Restated Investor Rights Agreement
ADVENT CROWN FUND C.V.
By: Advent International Limited Partnership, General
Partner
By: Advent International Corporation, General Partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------------
Title: Vice President/Senior Vice President
DIGITAL MEDIA & COMMUNICATIONS II LIMITED PARTNERSHIP
By: Advent International Limited Partnership, General
Partner
By: Advent International Corporation, General Partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------------
Title: Vice President/Senior Vice President
OAKSTONE VENTURES LIMITED PARTNERSHIP
By: Advent International Limited Partnership, General
Partner
By: Advent International Corporation, General Partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------------
Title: Vice President/Senior Vice President
-24-
Amended & Restated Investor Rights Agreement
RRE INVESTORS, L.P.
By: /s/ Illegible
-------------------------------------
Name:
-------------------------------
Title: General Partner
RRE INVESTORS FUND, L.P.
By: /s/ Illegible
-------------------------------------
Name:
-------------------------------
Title: General Partner
XX XX PARTNERS, LLC
By: /s/ Xxxxx Xxxxxxxxx
-------------------------------------
Xxxxx Xxxxxxxxx, General Partner
REAL ESTATE EQUITIES LIMITED PARTNERSHIP
By: First Capital Financial Corporation
By: /s/ Xxxxxx XxXxxx
-------------------------------------
Xxxxxx X. XxXxxx, President
NORTH BRIDGE VENTURE PARTNERS III, L.P.
By: NORTH BRIDGE VENTURE MANAGEMENT III, L.P., its
General Partner
By: /s/ Xxxxxxx X'Xxxxx
-------------------------------------
Name: Xxxxxxx X'Xxxxx
-------------------------------
Title: General Partner
-25-
Amended & Restated Investor Rights Agreement
COMMONWEALTH CAPITAL VENTURES II L.P.
By: COMMONWEALTH CAPITAL VENTURES II, L.P., its
General Partner
By: /s/ Xxx Xxxxxxx
------------------------------------
Name: Xxx X. Xxxxxxx
------------------------------
Title: General Partner
CCV II ASSOCIATES L.P.
By: /s/ Xxx Xxxxxxx
------------------------------------
Name: Xxx X. Xxxxxxx
------------------------------
Title: General Partner
By: /s/ Xxxxx Way
------------------------------------
Xxxxx Way
CARDINAL CREST PARTNERS
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
------------------------------
Title: Partner
By: /s/ Xxx Xxxxx
------------------------------------
Xxx Xxxxx
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Xxxxxx Xxxxxx
-26-
Amended & Restated Investor Rights Agreement
By: /s/ Xxxxxx Xxxxxxxxxx
-----------------------------------
Xxxxxx x. Xxxxxxxxxx XX
By: /s/ Xxxxx Xxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxx
SENIOR MANAGERS:
/s/ Xxxxx Xxxxx
-----------------------------------
Xxxxx Xxxxx
Address: 00 Xxxxxxxx Xxxx
--------------------------
Xxxxxxx, XX 00000
--------------------------
/s/ Xx Xxxxx
-----------------------------------
Xx Xxxxx
Address: 000 Xxxxxxxxxxxx Xxx., #0
--------------------------
Xxxxxx, XX 00000
--------------------------
/s/ Xxxxxxx Xxxxx
-----------------------------------
Xxxxxxx Xxxxx
Address: 000 Xxxxxxxx Xxxxxx
--------------------------
Xxxxxxx, XX 00000
--------------------------
/s/ Xxxxxxx Xxxxx
-----------------------------------
Xxxxxxx Xxxxx
Address: 000 Xxxxx Xxxxxx
--------------------------
Xxxxxxx, XX 00000
--------------------------
-27-
Amended & Restated Investor Rights Agreement
Exhibit A
---------
Pursuant to a letter agreement dated March 19, 1999, Xxxxxx Xxxxxx Partners LLC
("TWP") shall be issued a warrant to purchase shares of Series C Convertible
Preferred Stock. From and after the exercise of such warrant and the issuance
to TWP of such shares, solely for purposes of Article 2 hereof (including
without limitation any definitions in Article 1 as they relate to Article 2) and
Article 6, (i) TWP shall be considered a "Purchaser" hereunder, including
without limitation for purposes of defining "Stockholders", and (ii) the shares
of Series C Convertible Preferred Stock issued to TWP shall be considered Series
C Shares, including without limitation for purposes of defining "Registrable
Shares".
[List of Purchasers - See Attached]
-28-
