Exhibit 4.2
================================================================================
VASTERA, INC.
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
================================================================================
TABLE OF CONTENTS
Page
----
SECTION 1. GENERAL................................................................................................1
1.1 Definitions................................................................................................1
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER.................................................................3
2.1 Restrictions on Transfer...................................................................................3
2.2 Demand Registration........................................................................................4
2.3 Piggyback Registration.....................................................................................6
2.4 Form S-3 Registration......................................................................................7
2.5 IPO Allocation.............................................................................................8
2.6 Expenses of Registration...................................................................................9
2.7 Obligations of the Company................................................................................10
2.8 Termination of Registration Rights........................................................................10
2.9 Delay of Registration; Furnishing Information.............................................................11
2.10 Indemnification..........................................................................................12
2.11 Assignment of Registration Rights........................................................................13
2.12 Amendment of Registration Rights.........................................................................13
2.13 Limitation on Subsequent Registration Rights.............................................................14
2.14 "Market Stand-Off"Agreement..............................................................................15
2.15 Rule 144 Reporting.......................................................................................14
SECTION 3. COVENANTS OF THE COMPANY..............................................................................15
3.1 Basic Financial Information and Reporting.................................................................15
3.2 Inspection Rights.........................................................................................16
3.3 Confidentiality of Records................................................................................16
3.4 Reservation of Common Stock...............................................................................16
3.5 Stock Vesting.............................................................................................16
3.6 Termination of Covenants..................................................................................16
SECTION 4. RIGHTS OF FIRST REFUSAL...............................................................................17
4.1 Subsequent Offerings......................................................................................17
4.2 Exercise of Rights........................................................................................17
4.3 Issuance of Equity Securities to Other Persons............................................................17
4.4 Termination of Rights of First Refusal....................................................................18
- ii -
4.5 Transfer of Rights of First Refusal.......................................................................18
4.6 Excluded Securities.......................................................................................18
SECTION 5. MISCELLANEOUS.........................................................................................19
5.1 Governing Law.............................................................................................19
5.2 Survival..................................................................................................19
5.3 Successors and Assigns; Binding Nature....................................................................19
5.4 Severability..............................................................................................19
5.5 Amendment and Waiver......................................................................................19
5.6 Delays or Omissions.......................................................................................20
5.7 Notices...................................................................................................20
5.8 Attorneys' Fees...........................................................................................20
5.9 Titles and Subtitles......................................................................................21
5.10 Pronouns.................................................................................................21
5.11 Counterparts.............................................................................................21
5.12 Entire Agreement.........................................................................................21
- iii -
VASTERA, INC.
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
This SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (the
"Agreement") is entered into as of the 24th day of November, 1998, by and among
the following parties: VASTERA, INC. a Delaware corporation formerly known as
"Export Software International, Inc." (the "COMPANY"); those entities designated
on the signature pages hereof as "INVESTORS" and any entity that may become a
party hereto as an "INVESTOR" by executing a counterpart hereof (singly, an
"INVESTOR", and collectively, the "INVESTORS").
NOW, THEREFORE, in consideration of the premises and the mutual
promises, representations, warranties, covenants and conditions set forth in
this Agreement, that certain Amended and Restated Investors' Rights Agreement
dated as of August 7, 1997 is hereby amended and restated in its entirety as
follows:
SECTION 1. GENERAL.
1.1 Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:
"COMMON STOCK" means the Common Stock of the Company, $0.01
par value per share.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FORM S-3" means such form under the Securities Act as in
effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the SEC that permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"HOLDER" means any person of record owning Shares or
Registrable Securities that have not been sold to the public or any assignee of
record of such Registrable Securities in accordance with Section 2.11 hereof.
"INITIAL OFFERING" means the date of the closing of a sale to
the public of Common Stock for the account of the Company in a firm commitment
underwritten offering pursuant to a registration statement filed with, and
declared effective by, the Securities and Exchange Commission under the
Securities Act in which (a) the price per share is at least $14.80 (subject to
adjustments for any stock dividends, combinations, splits, recapitalizations and
the like) and (b) the net proceeds to the Company (after Selling Expenses) are
greater than $15,000,000.
"OPTION(S)" mean the options to purchase shares of Series B
Convertible Preferred Stock held by Battery Ventures III, L.P., the options to
purchase shares of Series C-1 Convertible
Preferred Stock held by certain of the Investors, the Warrants to purchase
shares of Series D-1 Convertible Preferred Stock held by certain of the
Investors; and certain bridge warrants held by Battery Ventures III, L.P. and
Lighthouse Capital Partners, II, L.P., each issued August 7, 1997.
"REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.
"REGISTRABLE SECURITIES" means (a) Common Stock issued or
issuable upon conversion of the Shares, including, without limitation, Common
Stock issued upon conversion of any Shares issued upon exercise of any of the
Options and (b) any Common Stock issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange for or in replacement of,
such above-described securities. Notwithstanding anything to the contrary
contained in the foregoing, Registrable Securities shall not include any
securities that are (i) sold pursuant to a registration statement or Rule 144
under the Securities Act, or (ii) sold in any manner to a person or entity that,
by virtue of the provisions of this Agreement, is not entitled to the rights
provided by this Agreement.
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number
of shares of Common Stock that are both Registrable Securities and either (a)
then issued and outstanding or (b) then issuable upon the conversion, exchange
or exercise of any then outstanding securities that are convertible into,
exercisable for or exchangeable for shares of Common Stock.
"REGISTRATION EXPENSES" mean all expenses incurred by the
Company in complying with Sections 2.2, 2.3 and 2.4 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, reasonable fees and disbursements of a
single special counsel for the Holders, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company which shall
be paid in any event by the Company).
"RELATED AGREEMENTS" mean the Preferred Stock Purchase
Agreement and the related Option Agreement, both dated as of July 31, 1996, the
Series C and Series D Preferred Stock Purchase Agreement dated as of August 7,
1997, as amended, the Series D Convertible Preferred Stock and Warrant Purchase
Agreement of even date herewith and the Second Amended and Restated Right of
First Refusal and Co-Sale Agreement of even date herewith (the "Restated Co-Sale
Agreement").
"SEC" or "COMMISSION" means the Securities and Exchange
Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLING EXPENSES" means all underwriting discounts and
selling commissions and fees applicable to the sale.
- 2 -
"SERIES A CONVERTIBLE PREFERRED STOCK" means the Company's
Series A Convertible Preferred Stock, par value $0.01 per share.
"SERIES B CONVERTIBLE PREFERRED STOCK" means the Company's
Series B Convertible Preferred Stock, par value $0.01 per share.
"SERIES C CONVERTIBLE PREFERRED STOCK" means the Company's
Series C Convertible Preferred Stock, par value $0.01 per share.
"SERIES C-1 CONVERTIBLE PREFERRED STOCK" means the Company's
Series C-1 Convertible Preferred Stock, par value $0.01 per share.
"SERIES D CONVERTIBLE PREFERRED STOCK" means the Company's
Series D Convertible Preferred Stock, par value $0.01 per share.
"SERIES D-1 CONVERTIBLE PREFERRED STOCK" means the Company's
Series D-1 Convertible Preferred Stock, par value $0.01 per share.
"SHARES" mean shares of any of the Company's Series A
Convertible Preferred Stock, shares of the Company's Series B Convertible
Preferred Stock, shares of the Company's Series C Convertible Preferred Stock,
shares of the Company's Series C-1 Convertible Preferred Stock, shares of the
Company's Series D Convertible Preferred Stock and shares of the Company's
Series D-1 Convertible Preferred Stock.
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER.
2.1 RESTRICTIONS ON TRANSFER.
(a) Each Holder agrees not to make any disposition of all or
any portion of the Shares or Registrable Securities unless and until:
(i) There is then in effect a registration statement
under the Securities Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
(ii) (A) The transferee has agreed in writing to be
bound by this Section 2.1, (B) such Holder shall have notified the Company of
the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (C) if
such disposition is being effected other than pursuant to Rule 144 and if
reasonably requested by the Company, such Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the
Securities Act.
Notwithstanding the provisions of paragraphs (i) and (ii) above, no such
registration statement or opinion of counsel shall be necessary for a transfer
which does not require registration under the Securities Act by a Holder which
is (A) a partnership to its partners or former partners in accordance
- 3 -
with their interests in such partnership, (B) a corporation to its shareholders
in accordance with their interests in the corporation, (C) a limited liability
company to its members or former members in accordance with their interests in
the limited liability company, or (D) to the Holder's family members or into a
trust for the benefit of such persons; provided in each case the transferee will
be subject to the terms of this Section 2.1 to the same extent as if he were an
original Holder hereunder.
(b) In addition to any legend required under applicable state
securities laws or as provided elsewhere in this Agreement, each certificate
representing Shares or Registrable Securities shall (unless otherwise permitted
by the provisions of this Agreement) be stamped or otherwise imprinted with a
legend substantially similar to the following:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED.
(c) The Company shall be obligated to reissue promptly
unlegended certificates at the request of any holder thereof if the holder shall
have obtained an opinion of counsel (which counsel may be counsel to the
Company) reasonably acceptable to the Company to the effect that the securities
proposed to be disposed of may lawfully be so disposed of without registration,
qualification or legend; provided however, any legend required to remain by any
other agreement shall not be removed.
(d) Any legend endorsed on an instrument pursuant to
applicable state securities laws and the stop-transfer instructions with respect
to such securities shall be removed upon receipt by the Company of an order from
the appropriate blue sky authority authorizing such removal.
2.2 DEMAND REGISTRATION.
(a) Subject to the conditions of this Section 2.2, if the
Company receives a written request from the Holders of 40% of the Shares (or any
Common Stock issued upon conversion thereof) (the "Initiating Holders") that the
Company file a registration statement, on Form S-1, under the Securities Act
covering the registration of at least 25% of the Registrable Securities or such
number of shares of Registrable Securities anticipated to have an aggregate
offering price of not less than $10,000,000, then the Company shall, within
thirty (30) days of the receipt thereof, give written notice of such request to
all Holders, and subject to the limitations of this Section 2.2, use its best
efforts to effect, as soon as practicable, the registration under the Securities
Act of all Registrable Securities that the Holders request to be registered.
(b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 2.2 and the Company shall include such information in the written
notice referred to in Section 2.2(a). In such event, the right of any Holder to
include its Registrable Securities in such registration shall be conditioned
upon such Holder's participation in
- 4 -
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting (unless otherwise mutually agreed by a majority in interest of
the Initiating Holders and such Holder) to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by a majority of the Initiating
Holders (which underwriter or underwriters shall be reasonably acceptable to the
Company). Notwithstanding any other provision of this Section 2.2, if the
underwriter advises the Company that marketing factors require a limitation of
the number of securities to be underwritten, then the Company shall advise all
Holders of Registrable Securities which would otherwise be underwritten pursuant
hereto that the number of shares that may be included in the underwriting shall
be allocated to the Holders of such Registrable Securities on a pro rata basis
based on the number of Registrable Securities requested by each such Holder, and
the Holders to be included in the registration (including the Initiating
Holders). Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.
(c) The Company shall not be required to effect a registration
pursuant to this Section 2.2:
(i) after the Company has effected two (2)
registrations pursuant to this Section 2.2, and such registrations have been
declared or ordered effective or withdrawn by the Holders;
(ii) during the period starting with the date of
filing of, and ending on the date ninety (90) days following the effective date
of, any registration statement on Form S-1;
(iii) if within thirty (30) days of receipt of a
written request from Initiating Holders pursuant to Section 2.2(a), the Company
gives notice to the Holders of the Company's intention to make its Initial
Offering within ninety (90) days;
(iv) if (A) at the time the Company receives a
request for registration in accordance with this Section 2.2 the Company shall
then be engaged in any material transaction (such as, by way of example only,
negotiating a merger, acquisition, joint-venture or introduction of a major new
product) the disclosure of which in a Registration Statement, in the reasonable
judgment of a majority of the Board of Directors, exercised in good faith, would
be adverse to the Company's best interests, or (B) if the Company shall furnish
to Holders requesting a registration pursuant to this Section 2.2 a certificate
signed by a majority of the Board of Directors stating that in the Board of
Directors' reasonable judgment, exercised in good faith, the Company's earnings
or the occurrence of some other material event are not at such time appropriate
for disclosure, or, that it would be seriously detrimental to the Company and
its stockholders for such registration statement to be effected at such time,
then, in either of such events, the Company shall have the right to defer such
filing for a period of not more than ninety (90) days after receipt of the
request of the Initiating Holders; provided that such rights to delay a request
shall be exercised by the Company in the aggregate not more than once in any
twelve (12) month period; or
(v) prior to the earlier to occur of (a) September 1,
2000 or (b) six months after the Closing of the Initial Offering.
- 5 -
2.3 PIGGYBACK REGISTRATION.
(a) The Company shall notify all Holders in writing at least
ninety (90) days prior to the filing of any registration statement under the
Securities Act for purposes of a public offering of securities of the Company
(including, but not limited to, registration statements relating to secondary
offerings of securities of the Company, but excluding registration statements
relating to employee benefit plans or with respect to corporate reorganizations
or other transactions under Rule 145 of the Securities Act) and will afford an
opportunity to include in such registration statement all or part of such
Registrable Securities held by such Holder. Each Holder desiring to include in
any such registration statement all or any part of the Registrable Securities
held by it shall, within fifteen (15) days after the above-described notice from
the Company, so notify the Company in writing. Such notice shall state the
intended method of disposition of the Registrable Securities by such Holder. If
a Holder decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.
(b) If the registration statement under which the Company
gives notice under this Section 2.3 is for an underwritten offering, the Company
shall so advise the Holders of Registrable Securities. In such event, the right
of any such Holder to be included in a registration pursuant to this Section 2.3
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities (and, if applicable, any and all other selling shareholders who may
be permitted to register shares) through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of the Agreement to the contrary, if the underwriter determines in
good faith that marketing factors require a limitation of the number of shares
to be underwritten, the number of shares that may be included in the
underwriting shall be allocated, first, to the Company; second, to the Holders
on a PRO RATA basis based on the total number of Registrable Securities
requested by each Holder to be registered; third, to any stockholder of the
Company (other than a Holder) on a PRO RATA basis. No such reduction shall
reduce the securities being offered by the Company for its own account to be
included in the registration and underwriting; PROVIDED, however, that in no
event shall the amount of securities of the selling Holders included in the
registration be reduced below thirty percent (30%) of the total amount of
securities included in such registration, unless such offering is the Initial
Offering and such registration does not include shares of any other selling
stockholders, in which event any or all of the Registrable Securities of the
Holders may be excluded in accordance with the immediately preceding sentence.
In no event shall shares of any other selling stockholder be included in such
registration which would reduce the number of shares which may be included by
Holders without the written consent of Holders of not less than two-thirds of
the Registrable Securities proposed to be sold in the offering.
(c) Right to Terminate Registration. The Company shall have
the right to terminate or withdraw any registration initiated by it under this
Section 2.3 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration.
- 6 -
The Registration Expenses of such withdrawn registration shall be borne by the
Company in accordance with Section 2.6 hereof.
2.4 FORM S-3 REGISTRATION.
In case the Company shall receive from any Holder or Holders of (A) a
majority of the Registrable Securities relating to the Company's Series A
Convertible Preferred Stock (the "Series A Registrable Securities"), (B) a
majority of the Registrable Securities relating to the Company's Series C
Convertible Preferred Stock (the Series C Registrable Securities") or (C) any
Registrable Securities relating to the Company's Series D Convertible Preferred
Stock (in any case, the "Initiating S-3 Holders") a written request or requests
that the Company effect a registration on Form S-3 (or any successor to Form
S-3) or any similar short-form registration statement and any related
qualification or compliance with respect to all or a part of the Registrable
Securities owned by such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders of Registrable
Securities; and
(b) as soon as practicable, effect such registration and all
such qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such Holder's
or Holders' Registrable Securities as are specified in such request, together
with all or such portion of the Registrable Securities of any other Holder or
Holders joining in such request as are specified in a written request given
within fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 2.4:
(i) if Form S-3 (or any successor or similar form) is
not available for such offering by the Holder;
(ii) if the Holders, together with the holders of any
other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public of less than $500,000;
(iii) if (A) at the time the Company receives a
request for registration in accordance with this Section 2.4 the Company shall
then be engaged in any material transaction (such as, by way of example only,
negotiating a merger, acquisition, joint-venture or introduction of a major new
product) the disclosure of which in a Registration Statement, in the reasonable
judgment of a majority of the Board of Directors, exercised in good faith, would
be adverse to the Company's best interests, or (B) if the Company shall furnish
to the Holders requesting a registration pursuant to this Section 2.4 a
certificate signed by a majority of the Board of Directors of the Company
stating that in the Board of Directors' reasonable judgment, exercised in good
faith, the Company's earnings or the occurrence of some other material event are
not at such time appropriate for disclosure, or that it would be seriously
detrimental to the Company and its stockholders for such Form S-3 Registration
to be effected at such time, then, in either of such events, the Company shall
have the right to defer the filing of the Form S-3 registration statement for a
period of not more than ninety (90) days after receipt of the request of the
Holder or Holders under this Section 2.4;
- 7 -
provided, that such rights to delay a request shall be exercised by the Company
in the aggregate not more than once in any twelve (12) month period.
(iv) in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance.
(c) Subject to the foregoing, the Company will file a Form S-3
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders.
2.5 IPO ALLOCATION.
In the event of a bona fide, underwritten initial public offering of
the capital stock of the Company (the "IPO"), the Company shall use commercially
reasonable efforts to require that the managing underwriters of the IPO
establish a directed share program (the "PROGRAM") in connection with the IPO.
The Program shall consist of that number of shares of capital stock (the
"PROGRAM SHARES") determined by dividing $3,000,000 by the initial price to the
public set forth on the cover page of the final prospectus distributed in
connection with the IPO (the "IPO PRICE"), provided that, if necessary to
complete the IPO, the number of Program Shares may be reduced to the maximum
number permitted under the rules and requirements of the NASD. The Company shall
cause the managing underwriters (subject to the consent of the underwriters) to
give priority to the holders of the Company's Series C Convertible Preferred
Stock (or Common Stock issuable upon conversion thereof)(the "SERIES C
HOLDERS"), PRO RATA in accordance with their relative holdings of Series C
Convertible Preferred Stock (or Common Stock issued upon conversion thereof)
with respect to the Program Shares in allocating the shares available for
purchase in the Program. The Series C Holders, PRO RATA as aforesaid, shall have
the option, but not the obligation, to purchase all or any portion of the
Program Shares at the IPO Price. Notwithstanding the foregoing, in no event
shall the Investors designated on the signature pages hereto as the "TCV
Investors" have the rights under this Section 2.5 with respect to less than such
number of Program Shares that, when multiplied by the IPO Price, equals
$1,500,000 (such product being referred to as the "Program Value"), and if the
Program Value shall be less than $1,500,000, then the TCV Investors shall have
the rights under this Section 2.5 with respect to all of the Program Shares (the
number of Program Shares as to which the TCV Investors are to have the rights
under this Section 2.5 in accordance with this sentence are referred to as the
"TCV Minimum Shares"). If, in order to give effect to the operation of the
preceding sentence, the Investors other than the TCV Investors obtain rights
under this Section 2.5 with respect to less than their respective PRO RATA share
of the Program Shares, then (i) such other Investors shall have the rights under
this Section 2.5 with respect to all of the Program Shares other than the TCV
Minimum Shares, if there shall be any Program Shares in addition to the TCV
Minimum Shares, and (ii) such other Investors shall share such rights PRO RATA
in accordance with their relative holdings of Series C Convertible Preferred
Stock (or Common Stock issued upon the conversion thereof.
2.6 EXPENSES OF REGISTRATION.
Except as specifically provided herein, all Registration Expenses
incurred in connection with any registration, qualification or compliance
pursuant to Section 2.2 or any registration under
- 8 -
Section 2.3 or Section 2.4 herein shall be borne by the Company. All Selling
Expenses incurred in connection with any registrations hereunder shall be borne
by the holders of the securities so registered pro rata on the basis of the
number of shares so registered. The Company shall not, however, be required to
pay for expenses of any registration proceeding begun pursuant to Section 2.2 or
2.4, the request of which has been subsequently withdrawn by the Initiating
Holders or the Initiating S-3 Holders, as the case may be, unless (a) the
withdrawal is based upon material adverse information concerning the Company of
which the Initiating Holders or the Initiating S-3 Holders, as the case may be
were not aware at the time of such request or (b) the Holders of a majority of
Registrable Securities agree to forfeit their right to one requested
registration pursuant to Section 2.2 or Section 2.4, as applicable, in which
event such right shall be forfeited by all Holders. If the Holders are required
to pay the Registration Expenses, such expenses shall be borne by the holders of
securities (including Registrable Securities) requesting such registration in
proportion to the number of shares for which registration was requested. If the
Company is required to pay the Registration Expenses of a withdrawn offering
pursuant to clause (a) above, then the Holders shall not forfeit their rights
pursuant to Section 2.2 or Section 2.4 to a demand registration.
2.7 OBLIGATIONS OF THE COMPANY.
Whenever required to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use all reasonable efforts to
cause such registration statement to become effective, and, upon the request of
the Initiating Holders or the Initiating S-3 Holders, as the case may be, keep
such registration statement effective for up to one hundred and eighty (180)
days or, if earlier, until the Holder or Holders have completed the distribution
related thereto.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such number of copies of the
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them.
(d) Use all reasonable efforts to register and qualify the
securities covered by such registration under such other securities laws and
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under a underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
- 9 -
(f) Notify each Holder of Registrable Securities covered by
such registration statement that a prospectus relating thereto is required to be
delivered under the Securities Act of any event that would cause the prospectus
included in such registration statement, as then in effect, to include an untrue
statement of a material fact or to omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.
(g) Furnish, at the request of the Initiating Holders holding
a majority of the shares participating in the offering or the Initiating S-3
Holders holding a majority of the shares participating in the offering, as the
case may be, on the date that such Registrable Securities are delivered to the
underwriters for sale, if such securities are being sold through underwriters,
or, if such securities are not being sold through underwriters, on the date that
the registration statement with respect to such securities becomes effective,
(i) an opinion, dated as of such date, from the counsel representing the Company
for the purposes of such registration, in the form and substance as is
customarily given to underwriters in an underwritten public offering and
reasonably satisfactory to a majority of the Holders requesting registration,
addressed to the underwriters, if any, and to the Holders requesting the
registration of their Registrable Securities and (ii) a letter dated as of such
date, from the independent certified public accountants of the Company, in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering and reasonably
satisfactory to a majority of the Holders requesting registration, addressed to
the underwriters, if any, and if permitted by applicable accounting standards,
to the Holders requesting the registration of their Registrable Securities.
2.8 TERMINATION OF REGISTRATION RIGHTS.
All registration rights granted to a Holder under this Article II
(other than under Section 2.3 with respect to underwritten offerings) shall
terminate and be of no further force and effect upon the earlier of (i) the
fifth anniversary of the consummation of the Initial Offering and (ii) such date
as all Registrable Securities held by and issuable to such Holder may be sold in
the manner described in Rule 144 during any ninety (90) day period.
2.9 DELAY OF REGISTRATION; FURNISHING INFORMATION.
(a) No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Section 2.
(b) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to Sections 2.2, 2.3 or 2.4 that the
selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities.
2.10 INDEMNIFICATION.
- 10 -
In the event any Registrable Securities are included in a registration
statement under Sections 2.2, 2.3 or 2.4:
(a) To the extent permitted by law, the Company shall
indemnify and hold harmless each Holder, the partners, officers, directors and
legal counsel of each Holder, any underwriter (as defined in the Securities Act)
for such Holder and each person, if any, who controls such Holder 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 the may
become subject under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation") by the Company: (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospects or final
prospectus contained therein and any amendments or supplements thereto, (ii) the
omission or alleged omission to state a material fact required to be stated
therein, or necessary to make the statements therein not misleading, or (iii)
any violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities laws or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities laws in
connection with the offering covered by such registration statement; and the
Company shall reimburse each such Holder, partner, officer or director,
underwriter or controlling person on a current basis for any legal or other
expense reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided however,
that the indemnity agreement contained in this Section 2.10(a) shall not apply
to default judgments or 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 shall not be unreasonably withheld, nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by such Holder, partner,
officer, director, underwriter or controlling person of such Holder.
(b) To the extent permitted by law, each Holder shall, if
Registrable Securities held by such Holder are included in the securities as to
which such registration qualifications or compliance is being effected,
indemnify and hold harmless the Company, each of its directors, its officers,
and legal counsel and each person, if any, who controls the Company within the
meaning of the Securities Act, any underwriter and any other Holder selling
securities under such registration statement or any of such other Holder's
partners, directors or officer or any person who controls such Holder, against
any losses, claims, damages or liabilities (joint or several) to which the
Company or any such director, officer, controlling person, underwriter or other
such Holder, or partner, director, officer or controlling person of such other
Holder may become subject under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs due
to the Company's reliance upon written information furnished by such Holder
under an instrument duly executed by such Holder and stated to be specifically
for use in connection with such registration; and each such Holder shall
reimburse any legal or other expenses reasonably incurred by the Company or any
such director, officer, controlling person, underwriter or other Holder, or
partner, officer, director or controlling person of such other Holder in
connection with investigating or defending any such loss, claim, damage,
- 11 -
liability or action if it is judicially determined that there was such a
Violation; provided, however, that the indemnity agreement contained in this
Section 2.10(b) shall not apply to default judgments or amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided further, that in no event shall any
indemnity under this Section 2.10 exceed the net proceeds from the offering
received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 2.10 of notice of the commencement of any action (including any
governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against any indemnifying party under this Section 2.10,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any indemnifying party
similarly notified, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 2.10, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
2.10.
(d) If the indemnification provided for in this Section 2.10
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the Indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, that in no event shall any contribution by a
Holder hereunder exceed the net proceeds from the offering received by such
Holder.
(e) The obligations of the Company and Holders under this
Section 2.10 shall survive completion of any offering of Registrable Securities
in a registration statement and the termination of this Agreement. No
indemnifying party, in the defense of any such claim or litigation, shall,
except with the consent of each indemnified party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party a
release from all liability in respect to such claim or litigation.
- 12 -
2.11 ASSIGNMENT OF REGISTRATION RIGHTS.
The rights to cause the Company to register Registrable Securities
pursuant to this Article II may be assigned by a Holder to a transferee or
assignee of Shares or Registrable Securities, provided such transferee or
assignee (i) is a subsidiary, parent, general partner, limited partner or
retired partner of a Holder, (ii) is a Holder's family member or trust for the
benefit of an individual Holder, or (iii) acquires at least one hundred thousand
(100,000) Shares or Registrable Securities (as adjusted for stock splits and
combinations) and is not a competitor of the Company (as reasonably determined
by the Board of Directors); provided, however, (A) the transferor shall, within
ten (10) days after such transfer, furnish to the Company written notice of the
name and address of such transferee or assignee and the securities with respect
to which such registration rights are being assigned and (B) such transferee
shall agree to be subject to all restrictions set forth in this Agreement and
the Restated Co-Sale Agreement.
2.12 AMENDMENT OF REGISTRATION RIGHTS.
Any provision of this Section 2 may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the holders of
a majority of the Series A Registrable Securities, voting or acting separately
as a class, a majority of the Series C Registrable Securities, voting or acting
separately as a class, and a majority of the Series D Registrable Securities,
voting or acting separately as a class, provided that all Holders are affected
by such amendment or waiver in a substantially similar fashion. If any amendment
treats any class of holders differently than any other class, the affected class
must approve or waive the amendment or modification by a majority vote of the
affected class. Any amendment or waiver effected in accordance with this Section
2.12 shall be binding upon each Holder and the Company. By acceptance of any
benefits under this Section 2, Holders hereby agree to be bound by the
provisions hereunder.
2.13 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS.
After the date of this Agreement, the Company shall not, without the
prior written consent of the holders of a majority of the Series A Registrable
Securities, voting or acting separately as a class, a majority of the Series C
Registrable Securities, voting or acting separately as a class, and a majority
of the Series D Registrable Securities voting or acting separately as a class,
enter into any agreement with any holder or prospective holder of any securities
of the Company that would grant such holder any registration rights with respect
to such securities.
2.14 "MARKET STAND-OFF" AGREEMENT.
If requested by the Company or the representative of the underwriters
of the Common Stock (or other securities), each Holder and a transferee of a
Holder, regardless of whether such transferee has registration rights hereunder,
shall not sell or otherwise transfer or dispose of any Registrable Securities
held by such Holder (other than those included in the registration) for a period
specified by the representative of the underwriters not to exceed one hundred
eighty (180) days following the effective date of a registration statement of
the Company filed under the Securities Act, provided that:
- 13 -
(a) such agreement shall apply only to the Initial Offering;
(b) all officers and directors of the Company and holders of
at least one percent (1%) of the Company's voting securities enter into similar
agreements; and
(c) such agreement shall provide that any discretionary waiver
or termination of the restrictions of such agreements by the Company or the
representatives of the underwriters shall apply to all persons subject to such
agreements pro rata based on the number of Registrable Securities held.
The obligations described in this Section 2.14 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period.
2.15 RULE 144 REPORTING.
With a view to making available to the Holders the benefits of certain
rules and regulations of the SEC which may permit the sale of the Registrable
Securities to the public without registration, the Company agrees to use its
best efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times that the Company is subject
to the reporting requirements of the Exchange Act, as amended;
(b) File with the SEC, in a timely manner, all reports and
other documents required of the Company under the Exchange Act; and
(c) So long as a Holder owns any Shares or Registrable
Securities, furnish to such Holder forthwith upon request a written statement by
the Company as to its compliance with the reporting requirements of said Rule
144 of the Securities Act, and of 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 may reasonably request in availing itself of any rule or regulation of
the SEC allowing it to sell any such securities without registration.
SECTION 3 COVENANTS OF THE COMPANY.
3.1 BASIC FINANCIAL INFORMATION AND REPORTING.
(a) The Company will maintain true books and records of
account in which full and correct entries will be made of all its business
transactions pursuant to a system of accounting established and administered in
accordance with generally accepted accounting principles consistently applied,
and will set aside on its books all such proper accruals and reserves as shall
be
- 14 -
required under generally accepted accounting principles consistently applied. In
addition to the information described in Section 3.1(b), (c) and (d), the
Company shall provide in a timely manner any other information concerning the
Company and its business and affairs as any of the Investors may from time to
time reasonably request.
(b) As soon as practicable after the end of each fiscal year
of the Company and so long as any of the Shares are outstanding, and in any
event within one hundred twenty (120) days thereafter, the Company will furnish
to each Investor a consolidated balance sheet of the Company, as at the end of
such fiscal year, and an audited consolidated income statement and an audited
consolidated cash flow statement of the Company, for such year, all prepared in
accordance with generally accepted accounting principles consistently applied
and setting forth in each case in comparative form the figures from the previous
fiscal year, with an explanation of any material differences between them, all
in reasonable detail. Such financial statements shall be accompanied by a report
and opinion thereon by independent public accountants of national standing
selected by the Company's Board of Directors and a report by management with a
discussion of the Company's business, including any changes in the Company's
financial condition and any significant business developments.
(c) As long as any of the Shares are outstanding, the Company
will furnish each Investor, as soon as practicable after the end of the first,
second and third quarterly accounting periods in each fiscal year of the
Company, and in any event within forty-five (45) days thereafter, a consolidated
balance sheet of the Company as of the end of each such quarterly period, and a
consolidated income statement and a consolidated cash flow statement of the
Company for such period and for the current fiscal year to date, prepared in
accordance with generally accepted accounting principles, with the exception
that no notes need be attached to such statements and year-end audit adjustments
may not have been made, and setting forth in each case in comparative form the
figures from the previous fiscal year, with an explanation of any material
differences between them. Such financial statements shall be accompanied by a
report by management with a discussion of the Company's business, including any
changes in the Company's financial condition and any significant business
developments.
(d) As long as any of the Shares are outstanding, the Company
will furnish each Investor (i) at least thirty (30) days prior to the beginning
of each fiscal year an annual budget and operating plans for such fiscal year
(and, as soon as available, any subsequent revisions thereto); and (ii) as soon
as practicable after the end of each month, and in any event within thirty (30)
days thereafter, a consolidated balance sheet of the Company as of the end of
each such month, and a consolidated income statement and a consolidated cash
flow statement of the Company for such month and for the current fiscal year to
date, including a comparison to plan figures for such period, prepared in
accordance with generally accepted accounting principles consistently applied,
with the exception that no notes need be attached to such statements and
year-end audit adjustments may not have been made.
3.2 INSPECTION RIGHTS.
Each Investor or its authorized representatives shall have the right to
visit and inspect any of the properties of the Company or any of its
subsidiaries, including its corporate and financial records, and to discuss the
affairs, finances and accounts of the Company or any of its subsidiaries
- 15 -
with its officers, and to review such information as it may reasonably request
all at such reasonable times and as often as may be reasonably requested;
provided, however, that the Company shall not be obligated under this Section
3.2 with respect to a competitor of the Company or with respect to information
which the Board of Directors determines in good faith is confidential and should
not, therefore, be disclosed.
3.3 CONFIDENTIALITY OF RECORDS.
Each Investor agrees to use, and to use its diligent efforts to ensure
that its authorized representatives use, the same degree of care as such
Investor uses to protect its own confidential information to keep confidential
any information furnished to it which the Company identifies as being
confidential or proprietary (so long as such information is not in the public
domain), except that such Investor may disclose such proprietary or confidential
information to any partner, subsidiary or parent of such Investor for the
purpose of evaluating its investment in the Company as long as such partner,
subsidiary or parent agrees to be bound by the confidentiality provisions of
this Section 3.3. Notwithstanding the foregoing, each Investor shall be free to
distribute to its partners or shareholders summary information describing the
Company's performance.
3.4 RESERVATION OF COMMON STOCK.
The Company will at all times reserve and keep available, solely for
issuance and delivery upon the conversion of Shares, all Common Stock issuable
from time to time upon conversion of all the Shares.
3.5 STOCK VESTING.
Unless otherwise approved by the Board of Directors, all stock options
and other stock equivalents issued after the date of this Agreement to
employees, directors, consultants and other service providers shall be subject
to vesting over a minimum of four year period and with respect to any shares of
stock purchased by any such person, the Company's repurchase option shall
provide that upon such person's termination of employment or service with the
Company, with or without cause, the Company or its assignee (to the extent
permissible under applicable securities laws and other laws) shall have the
option to purchase at cost any unvested shares of stock held by such person.
3.6 TERMINATION OF COVENANTS.
The provisions of 3.1, 3.2, 3.3 and 3.4 of this Agreement shall expire,
terminate and be of no further force of effect on the date the Initial Offering
is consummated.
SECTION 4. RIGHTS OF FIRST REFUSAL.
4.1 SUBSEQUENT OFFERINGS.
The Investors shall have a right of first refusal to purchase their PRO
RATA portion of the Equity Securities, as defined below, that the Company may,
from time to time, propose to sell and issue
- 16 -
after the date of this Agreement, other than the Equity Securities excluded by
Section 4.6 hereof. The term "Equity Securities" shall mean (i) any Common
Stock, Preferred Stock or other security of the Company (other than debt
securities which are not convertible into and do not carry rights to acquire any
capital stock of the Company), (ii) any security convertible, with or without
consideration, into any Common Stock, Preferred Stock or other security
(including any option to purchase such a convertible security), (iii) any
security carrying any warrant or right to subscribe to or purchase any Common
Stock, Preferred Stock or other security or (iv) any such warrant or right.
4.2 EXERCISE OF RIGHTS.
If the Company proposes to issue any Equity Securities, it shall give
the Investors written notice of its intention, describing the Equity Securities,
the price and the terms and conditions upon which the Company proposes to issue
the same. The Investors shall have fifteen (15) days from the giving of such
notice to agree to purchase the Equity Securities for the price and upon the
terms and conditions specified in the notice by giving written notice to the
Company and stating therein the quantity of Equity Securities to be purchased.
Notwithstanding the foregoing, the Company shall not be required to offer or
sell such Equity Securities to any such Investor if it would cause the Company
to be in violation of applicable federal securities laws by virtue of such offer
or sale.
4.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS.
If any Investor fails to exercise in full the rights of first refusal,
the Company shall have ninety (90) days thereafter to sell the Equity Securities
in respect of which the Investor's rights were not exercised, at a price and
upon general terms and conditions materially no more favorable to the purchasers
thereof than specified in the Company's notice to the Investor pursuant to
Section 4.2 hereof. If the Company has not sold such Equity Securities within 90
days of the notice provided pursuant to Section 4.2, the Company shall not
thereafter issue or sell such Equity Securities, without first offering such
securities to the Investor in the manner provided above.
4.4 TERMINATION OF RIGHTS OF FIRST REFUSAL.
The rights of first refusal established by this Section 4 shall
terminate upon either (a) the date of the Initial Offering or (b) with respect
to Investors holding Series A Convertible Preferred Stock or Series B
Convertible Preferred Stock, if fewer than 30% of the number of such Shares that
are outstanding (or in the case of Series B Convertible Preferred Stock, that
are issuable upon the exercise of an option therefor that is outstanding) as of
the date of this Agreement remain outstanding or (c) with respect to Investors
holding Series C Convertible Preferred Stock or Series C-1 Convertible Preferred
Stock, if fewer than 20% of the number of such shares that are outstanding (or,
in the case of Series C-1 Convertible Preferred Stock, that are issuable upon
the exercise of options therefor that are outstanding) as of the date of this
Agreement remain outstanding or (d) with respect to Investors holding Series D
Convertible Preferred Stock or Series D-1 Convertible Preferred Stock, if fewer
than 30% of the number of such shares that are outstanding (or, in the case of
Series D-1 Convertible Preferred Stock that are issuable upon the exercise of
Warrants therefor that are outstanding) as of the date of this Agreement remain
outstanding.
4.5 TRANSFER OF RIGHTS OF FIRST REFUSAL.
- 17 -
The rights of first refusal of the Investors under this Section 4 may
be transferred to the same parties, subject to the same restrictions as any
transfer of registration rights pursuant to Section 2.11.
4.6 EXCLUDED SECURITIES.
The rights of first refusal established by this Section 4 shall have no
application to any of the following Equity Securities:
(a) up to an aggregate amount of 2,000,000 shares of Common
Stock (and/or options, warrants or other Common Stock purchase rights issued
pursuant to such options, warrants or other rights) issued or to be issued to
employees, officers or directors of, or consultants or advisors to the Company
or any subsidiary, pursuant to stock purchase or stock option plans or other
similar arrangements that are approved by the Board of Directors;
(b) Stock issued pursuant to any rights or agreements
outstanding as of the date of this Agreement, options and warrants outstanding
as of the date of this Agreement, and stock issued pursuant to any such rights
or agreements granted after the date of this Agreement, provided that the rights
of first refusal established by this Article IV applied with respect to the
initial sale or grant by the Company of such rights or agreements;
(c) any Equity Securities issued for consideration other than
cash pursuant to a merger, consolidation, acquisition or similar business
combination;
(d) shares of Common Stock issued in connection with any stock
split, stock dividend or recapitalization by the Company;
(e) shares of Common Stock issued upon conversion of the
Shares;
(f) any Equity Securities issued pursuant to a public
offering; or
(g) any Equity Securities issued by the Company to an
operating company with compatible or complimentary products to effect a
strategic alliance with that company which is anticipated to provide to the
Company a well-defined economic benefit, provided that in no event shall the
number of shares of such Equity Securities so issued exceed in the aggregate
fifteen percent (15%) of the number of shares of Equity Securities outstanding
at the time of such issuance.
SECTION 5. MISCELLANEOUS.
5.1 GOVERNING LAW.
This Agreement shall be construed and governed in accordance with, and
the rights of the parties shall be governed by, the laws of the State of
Delaware (without giving effect to any conflicts or choice of law provisions
that would cause the application of the domestic substantive laws of any other
jurisdiction).
- 18 -
5.2 SURVIVAL.
The covenants and agreements made herein shall survive any
investigation made by any Holder and the closing of the transactions
contemplated hereby. All statements as to factual matters contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant hereto in connection with the transactions contemplated hereby shall be
deemed to be representations and warranties by the Company hereunder solely as
of the date of such certificate or instrument.
5.3 SUCCESSORS AND ASSIGNS; BINDING NATURE.
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 and shall inure to
the benefit of and be enforceable by each person who shall be a holder of
Registrable Securities from time to time; provided, however, that prior to the
receipt by the Company of adequate written notice of the transfer of any
Registrable Securities specifying the full name and address of the transferee,
the Company may deem and treat the person listed as the holder of such
Registrable Securities in its records as the absolute owner and holder thereof
for all purposes, including the payment of dividends or any redemption price.
5.4 SEVERABILITY.
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.
5.5 AMENDMENT AND WAIVER.
(a) Except as otherwise expressly provided, this Agreement may
be amended or modified only upon the written consent of the Company, the holders
of a majority of the Series A Registrable Securities voting as a separate class,
the holders of a majority of the Series C Registrable Securities, voting as a
separate class, and the holders of two-thirds of the Series D Registrable
Securities, voting as a separate class, provided, in such case, that all such
Holders are affected by such amendment or waiver in a substantially similar
fashion.
(b) Except as otherwise expressly provided herein, the
obligations of the Company and the rights of the Holders under this Agreement
may be waived only with the written consent of the holders of at least a
majority of the Series A Registrable Securities, voting as a separate class, the
holders of a majority of the Series C Registrable Securities, voting as a
separate class, and the holders of two-thirds of the Series D Registrable
Securities, voting as a separate class, provided, in such case, that all such
Holders are affected by such waiver in a substantially similar fashion.
(c) Notwithstanding the foregoing, this Agreement may be
amended with only the written consent of the Company to include additional
purchasers of Shares as "Investors," "Holders" and parties hereto.
- 19 -
5.6 DELAYS OR OMISSIONS.
It is agreed that no delay or omission to exercise any right, power, or
remedy occurring to any Holder, upon any breach, default or noncompliance of the
Company under this Agreement shall impair any such right, power or remedy, nor
shall it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of any similar breach, default or
noncompliance thereafter occurring. It is further agreed that any waiver,
permit, consent or approval of any kind or character on any Holder's part of any
breach, default or noncompliance under the Agreement or any waiver on such
Holder's part of any provisions or conditions of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement, by law, or otherwise
afforded to Holders, shall be cumulative and not alternative.
5.7 NOTICES.
All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (i) upon personal delivery to the party to be
notified, (ii) when sent by confirmed telex or facsimile if sent during normal
business hours of the recipient; if not, then on the next business day, (iii)
five (5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (iv) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the party
to be notified at the address as set forth on the signature pages hereof or
EXHIBIT A hereto or at such other address as such party may designate by ten
(10) days advance written notice to the other parties hereto.
5.8 ATTORNEYS' FEES.
In the event that any dispute among the parties to this Agreement
should result in litigation, the prevailing party in such dispute shall be
entitled to recover from the losing party all fees, costs and expenses of
enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees, and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
5.9 TITLES AND SUBTITLES.
The titles of the sections and subsections of this Agreement are for
convenience of reference only and are not to be considered in construing this
Agreement.
5.10 PRONOUNS.
All pronouns contained herein and any variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the parties hereto may require.
- 20 -
5.11 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.
5.12 ENTIRE AGREEMENT.
(a) This Agreement, the Exhibits and Schedules hereto, the Related
Agreements and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement between the parties with regard to the
subject matter hereof and neither party shall be liable or bound to the other
party except as specifically set forth herein and therein.
(b) This Agreement amends, restates and supersedes in its entirety
the terms and conditions set forth in the Amended and Restated Investors'
Rights, dated as of August 7, 1997, as amended agreement and such agreement
shall be of no further force or effect.
- 21 -
In Witness Whereof, the parties hereto have executed this Second
Amended and Restated Investors' Rights Agreement as of the date set forth in the
first paragraph hereof.
VASTERA, INC.
By:______________________________________
Arjun Rishi, President
LIGHTHOUSE CAPITAL PARTNERS II, L.P.
By: Lighthouse Management Partners II, L.P.,
its General Partner
By: Lighthouse Capital Partners, Inc.,
its General Partner
By:______________________________________
Name:
Title:
INVESTORS:
BATTERY VENTURES III, L.P.
BY: BATTERY PARTNERS III, L.P.
By:______________________________________
Xxxxxx X. Xxxxxxx,
General Partner
{SIGNATURES CONTINUED ON NEXT PAGE}
- 22 -
(TCV INVESTORS):
TCV II, V.O.F.
a Netherlands Antilles General Partnership
By: Technology Crossover Management II, L.L.C.
Its: Investment General Partner
By: ___________________________________
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
TECHNOLOGY CROSSOVER VENTURES II, L.P.
a Delaware Limited Partnership
By: Technology Crossover Management II, L.L.C.
Its: General Partner
By: ___________________________________
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
TCV II (Q), L.P.
a Delaware Limited Partnership
By: Technology Crossover Management II, L.L.C.
Its: General Partner
By: ___________________________________
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
TCV II STRATEGIC PARTNERS, L.P.
a Delaware Limited Partnership
By: Technology Crossover Management II, L.L.C.
Its: General Partner
By: ___________________________________
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
- 23 -
TECHNOLOGY CROSSOVER VENTURES II, C.V.
a Netherlands Antilles Limited Partnership
By: Technology Crossover Management II, L.L.C.
Its: Investment General Partner
By: ___________________________________
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
{SIGNATURES CONTINUED ON NEXT PAGE}
- 24 -
RRE INVESTORS, L.P.
By: _____________________________
Xxxxxx X. Xxxxxxx
Member, General Partner
RRE INVESTORS FUND, L.P.
By: _____________________________
Xxxxxx X. Xxxxxxx
Member, General Partner
MSD PORTFOLIO CAPITAL, L.P.
PRIVATE NEW EQUITY
By: _____________________________
Xxxxx Xxxxxx
Its: ____________________
RPKS INVESTMENTS, L.L.C.
By: _____________________________
Xxxxx Xxxxxx
Its: ____________________
TRIPLE XXXXXX INVESTMENTS, L.L.C.
By: _____________________________
Xxxx Xxxxxx
Its: ____________________
{SIGNATURES CONTINUED ON NEXT PAGE}
- 25 -
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: ______________________________
Xxxxx Xxxxxx
Its: ______________________
__________________________________
Xxxxxxxx X. Xxxxxx
XXXXX X. XXXXXXXX TRUST
By: ______________________________
Xxxxx X. Xxxxxxxx, Trustee
VERTEX TECHNOLOGY FUND PTE. LTD.
By: ______________________________
Name: ____________________________
Title: ___________________________
DELHI & DUBLIN VENTURES, L.L.C.
By: ______________________________
Name: Xxxxxx Xxxxx
Title: Chief Executive Officer
By: ______________________________
Name: Xxxxxx Xxxxx
Title: Partner
- 26 -
EXHIBIT A
TO
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
VASTERA, INC.
00000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
BATTERY VENTURES III, L.P.
000 Xxxxxxx'x Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
and
BATTERY VENTURES III, L.P.
00 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxx Xxxxxxx
Facsimile No.: (000) 000-0000
TECHNOLOGY CROSSOVER VENTURES II, L.P. and Affiliates:
Technology Crossover Ventures
00 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Technology Crossover Ventures
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
- 27 -
LIGHTHOUSE CAPITAL PARTNERS II, L.P.
000 Xxxxx'x Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 949f04-3121
Attention: Contract Administrator
Facsimile No.: (000) 000-0000
RRE INVESTORS, L.P.
000 Xxxx 00xx Xxxxxx, 00XX Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
MSD PORTFOLIO CAPITAL, L.P.
PRIVATE NEW EQUITY
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
RPKS INVESTMENTS, L.L.C.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
TRIPLE XXXXXX INVESTMENTS, L.L.C.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
XXXXX X. XXXXXXXX TRUST
Care of Xxxxx Xxxxxxxx, Peoplesoft, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Xxxxxxxx X. Xxxxxx
Peoplesoft, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
VERTEX TECHNOLOGY FUND PTE. LTD.
Three Lagoon Drive, Suite 220
Redwood City, CA 94065
DELHI & DUBLIN VENTURES, L.L.C.
00000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
- 28 -
VASTERA, INC.
AMENDMENT NO. 1 TO
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
THIS AMENDMENT NO. 1 (the "Amendment") dated as of February 26,
1999 to the Second Amended and Restated Investors' Rights Agreement dated as of
November 24, 1998 (the "Agreement"), by and among Vastera, Inc., a Delaware
corporation (the "Company"), and the holders of shares of the Company's Series A
Convertible Preferred Stock, par value $0.01 per share (the "Series A Preferred
Stock"), Series C Convertible Preferred Stock, par value $0.01 per share (the
"Series C Preferred Stock"), and Series D Convertible Preferred Stock, par value
$0.01 per share (the "Series D Preferred Stock"), listed on the signature pages
thereto (such holders, the "Series A Investors," the "Series C Investors" and
the "Series D Investors," respectively, and such holders are referred to in the
Agreement as the "Investors"), is hereby entered into by the Company, the
Investors and FDX Corporation, a Delaware corporation (the "New Investor"). The
undersigned Investors constitute the holders of at least a majority of the
Registrable Securities of each such class, as such term is defined in the
Agreement.
WHEREAS, contemporaneously with the execution of this Amendment,
the Company is issuing and selling an aggregate 512,715 shares (the "New
Shares") of its Series D Preferred Stock and has agreed to issue a warrant (the
"Warrant") to purchase an aggregate of 385,505 shares of its Series D-1
Convertible Preferred Stock, par value $0.01 per share (the "Series D-1
Preferred Stock"), to the New Investor under the terms and conditions set forth
in that certain Amendment No. 1 dated as of the date hereof to the Series D
Convertible Preferred Stock and Warrant Purchase Agreement dated as of November
24, 1998; and
WHEREAS, the Company and the Investors desire that the New
Investor be granted registration and other rights with respect to the New Shares
and the shares of Series D-1 Preferred Stock having the same terms and
conditions as the registration and other rights granted to the existing Series D
Investors with respect to the shares of Series D Preferred Stock.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. The New Shares purchased by the New Investor and the shares
of Common Stock of the Company, $0.01 par value per share (the "Common Stock"),
into which the New Shares may be converted are and shall be "Series D
Convertible Preferred Stock" and "Registrable Securities," respectively, as such
terms are used and defined in the Agreement. The New Shares are "Shares" as such
term is used and defined in the Agreement.
Amendment No. 1 to Second Amended
and Restated Investors' Rights Agreement
2. The Warrant issued to the New Investor shall be an "Option"
as such term is used and defined in the Agreement and may be exercised to
purchase Series D-1 Preferred Stock and such shares are and shall be "Series D-1
Convertible Preferred Stock" and "Shares" as such terms are used and defined in
the Agreement. The shares of Common Stock into which the Series D-1 Preferred
Stock may be converted are and shall be "Registrable Securities" as such term is
used and defined in the Agreement.
3. The New Investor shall be a "Holder" and an "Investor" as
such terms are used and defined in the Agreement.
4. The term "Related Agreements," as such term is presently
defined in the Agreement, shall, effective with the execution of this Amendment,
be redefined as follows:
"RELATED AGREEMENTS" mean the Preferred Stock Purchase
Agreement and the related Option Agreement, both dated as of July 31,
1996, the Series C and Series D Preferred Stock Purchase Agreement
dated as of August 7, 1997, as amended, the Series D Convertible
Preferred Stock and Warrant Purchase Agreement dated as of November 24,
1998, as amended, and the Second Amended and Restated Right of First
Refusal and Co-Sale Agreement dated as of November 24, 1998, as amended
(the "Restated Co-Sale Agreement").
5. Wherever the Agreement is itself referred to in the
Agreement, or wherever there are references in the Agreement to "hereunder,"
"hereof," "herein," or words of like import, they shall mean the Agreement, as
amended hereby.
6. The New Investor hereby agrees to be bound by all the terms
and conditions of, and is hereby granted all of the rights of an "Investor" and
"Holder" under, the Agreement as though such New Investor had been an original
party to the Agreement, and by executing this Amendment, the New Investor
becomes a party thereto and is bound thereby. The Investors and the Company
acknowledge that they remain bound by all the terms and conditions of the
Agreement, as amended hereby.
7. All notices, pursuant to Section 5.7 of the Agreement,
addressed to the New Investor shall be addressed as follows:
2
Amendment No. 1 to Second Amended
and Restated Investors' Rights Agreement
If to FDX Corporation:
FDX Corporation
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Chief Information Officer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
FDX Corporation
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
8. This Amendment shall in all respects be governed by, and
construed and enforced in accordance with, the internal laws of the State of
Delaware, without regard to the conflict of law principles thereof.
9. Any party's failure to enforce any provision or provisions of
this Amendment shall not in any way be construed as a waiver of any such
provision or provisions, nor shall such failure to enforce prevent that party
thereafter from enforcing each and every other provision of this Amendment. The
rights granted to the parties herein are cumulative and shall not constitute a
waiver of any party's right to assert all other legal remedies available to it
under the circumstances.
10. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which when taken together
shall constitute one and the same instrument.
11. The Company, each of the Investors and the New Investor
agree upon request to execute any further documents or instruments necessary or
desirable to carry out the purposes or intent of this Amendment or the
Agreement.
12. The Agreement, as amended by this Amendment, is and shall
continue to be in full force and effect and is hereby in all respects ratified
and confirmed.
3
Amendment No. 1 to Second Amended
and Restated Investors' Rights Agreement
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to Second Amended and Restated Investors' Rights Agreement to be
duly executed on the day and year first above written.
VASTERA, INC.
By:_______________________________
_______________, President and
Chief Executive Officer
NEW INVESTOR
FDX CORPORATION
By: ______________________________________
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President and
Chief Information Officer
Address: 0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
{REMAINDER OF PAGE INTENTIONALLY LEFT BLANK}
4
Amendment No. 1 to Second Amended
and Restated Investors' Rights Agreement
BATTERY VENTURES III, L.P.
BY: BATTERY PARTNERS III, L.P.
By: ___________________________________________
Xxxxxx X. Xxxxxxx, General Partner
TCV II, V.O.F.
A Netherlands Antilles General Partnership
BY: Technology Crossover Management II, L.L.C.
ITS: Investment General Partner
By: ___________________________________________
Xxxxxx X. Xxxxxx, Chief Financial Officer
TECHNOLOGY CROSSOVER VENTURES II, L.P.
A Delaware Limited Partnership
BY: Technology Crossover Management II, L.L.C.
ITS: General Partner
By: ___________________________________________
Xxxxxx X. Xxxxxx, Chief Financial Officer
TCV II (Q), L.P.
A Delaware Limited Partnership
BY: Technology Crossover Management II, L.L.C.
ITS: General Partner
By: ___________________________________________
Xxxxxx X. Xxxxxx, Chief Financial Officer
TCV II STRATEGIC PARTNERS, L.P.
A Delaware Limited Partnership
BY: Technology Crossover Management II, L.L.C.
ITS: General Partner
By: ___________________________________________
Xxxxxx X. Xxxxxx, Chief Financial Officer
5
Amendment No. 1 to Second Amended
and Restated Investors' Rights Agreement
TECHNOLOGY CROSSOVER VENTURES II, C.V.
A Netherlands Antilles Limited Partnership
BY: Technology Crossover Management II, L.L.C.
ITS: Investment General Partner
By: ___________________________________________
Xxxxxx X. Xxxxxx, Chief Financial Officer
Name: _________________________________________
Xxxxxxxx X. Xxxxxx
XXXXX X. XXXXXXXX TRUST
By: ___________________________________________
Xxxxx X. Xxxxxxxx
Trustee
VERTEX TECHNOLOGY FUND PTE. LTD.
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
DELHI & DUBLIN VENTURES, L.L.C.
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
{additional signatures follow}
6
Amendment No. 1 to Second Amended
and Restated Investors' Rights Agreement
RRE INVESTORS, L.P.
By: ______________________________
Xxxxxx X. Xxxxxxx
Member, General Partner
RRE INVESTORS FUND, L.P.
By: ______________________________
Xxxxxx X. Xxxxxxx
Member, General Partner
MSD PORTFOLIO, L.P. -
PRIVATE NEW EQUITY
By: ______________________________
Xxxxx Xxxxxxx
Its: ____________________
RPKS INVESTMENTS, L.L.C.
By: ______________________________
Xxxxx Xxxxxxx
Its: _____________________
TRIPLE XXXXXX INVESTMENTS, L.L.C.
By: ______________________________
Xxxx Xxxxxx
Its: _____________________
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: ______________________________
Xxx Xxxxxx
Its: ____________________________
7
Amendment No. 1 to Second Amended
and Restated Investors' Rights Agreement
EXECUTION COPY
VASTERA, INC.
AMENDMENT NO. 2 TO
SECOND AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
THIS AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED INVESTORS' RIGHTS
AGREEMENT (the "Amendment No. 2") is made and effective this 4th day of
February, 2000, by and among Vastera, Inc., a Delaware corporation (the
"Company") and each of the purchasers identified on the signature pages hereof
who are purchasing pursuant to the terms and conditions of the Series E Purchase
Agreement (as defined below) at either the Initial Closing (as defined in the
Series E Purchase Agreement) or the Second Closing (as defined in the Series E
Purchase Agreement) (each a "Purchaser," and collectively, the "Purchasers") and
the other parties identified on the signature pages hereof (the "Original
Parties").
WHEREAS, the Company desires to sell up to an aggregate of 1,846,722
shares of Series E Convertible Preferred Stock (the "Series E Preferred Stock")
to the Purchasers on the terms and conditions as contained in that Series E
Convertible Preferred Stock Purchase Agreement of even date herewith (the
"Series E Purchase Agreement"); and
WHEREAS, in connection with the sale by the Company to each Purchaser
of such shares of Series E Preferred Stock, each Purchaser desires to become a
party to that certain Second Amended and Restated Investors' Rights Agreement
dated as of November 24, 1998, as amended (the "Agreement") and the Original
Parties desire that the same occur.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to amend the Agreement as follows:
1. Section 1.1 of the Agreement shall be amended to add the following
definition:
"SERIES E CONVERTIBLE PREFERRED STOCK" means the Company's
Series E Convertible Preferred Stock, par value $0.01 per share.
2. The shares of Common Stock of the Company, $0.01 par value per share
(the "Common Stock"), into which the Series E Preferred Stock may be converted
are and shall be "Registrable Securities," as such term is used and defined in
the Agreement. The shares of Series E Preferred Stock are "Shares" as such term
is used and defined in the Agreement.
3. Each Purchaser shall be a "Holder" and an "Investor" as such terms
are used and defined in the Agreement.
4. The term "Related Agreements," as such term is presently defined in
the Agreement, shall be deleted in its entirety and, effective with the
execution of this Amendment, the following definition shall be inserted in lieu
thereof:
"RELATED AGREEMENTS" mean the Preferred Stock Purchase
Agreement and related Option Agreement, both dated as of July 31, 1996,
the Series C and Series D Preferred Stock Purchase Agreement dated as
of August 7, 1997, as amended, the Series D Convertible Preferred Stock
and Warrant Purchase Agreement dated as of November 24, 1998, as
amended, the Series E Convertible Preferred Stock Purchase Agreement
dated as of the date hereof and the Second Amended and Restated Right
of First Refusal and Co-Sale Agreement dated as of November 24, 1998,
as amended (the "Restated Co-Sale Agreement")."
5. The first paragraph of Section 2.4 of the Agreement shall be deleted
in its entirety and, effective with the execution of this Amendment, the
following shall be inserted in lieu thereof:
"In case the Company shall receive from any Holder or Holders
of (A) a majority of the Registrable Securities relating to the
Company's Series A Convertible Preferred Stock (the "Series A
Registrable Securities"), (B) a majority of the Registrable Securities
relating to the Company's Series C Convertible Preferred Stock (the
"Series C Registrable Securities"), (C) any Registrable Securities
relating to the Company's Series D Convertible Preferred Stock (the
"Series D Registrable Securities") or (D) any Registrable Securities
relating to the Company's Series E Convertible Preferred Stock (the
"Series E Registrable Securities") (in any case, the "Initiating S-3
Holders") a written request or requests that the Company effect a
registration on Form S-3 (or any successor to Form S-3) or any similar
short-form registration statement and any related qualification or
compliance with respect to all or a part of the Registrable Securities
owned by such Holder or Holders, the Company will:"
6. The first sentence of Section 2.12 of the Agreement shall be deleted
in its entirety and, effective with the execution of this Amendment, the
following shall be inserted in lieu thereof:
Any provision of this Section 2 may be amended and observance
thereof may be waived (either generally or in a particular instance and
either retroactively or prospectively), only with the written consent
of the holders of a majority of the Series A Registrable Securities,
voting or acting separately as a class, a majority
- 2 -
of the Series C Registrable Securities, voting or acting separately as
a class, a majority of the Series D Registrable Securities, voting or
acting separately as a class, and a majority of the Series E
Registrable Securities, voting or acting separately as a class,
provided that all Holders are affected by such amendment or waiver in a
substantially similar fashion.
7. Section 2.13 of the Agreement shall be deleted in its entirety and,
effective with the execution of this Amendment, the following shall be inserted
in lieu thereof:
"After the date of this Agreement, the Company shall not,
without the prior written consent of the holders of a majority of the
Series A Registrable Securities, voting or acting separately as a
class, a majority of the Series C Registrable Securities, voting or
acting separately as a class, a majority of the Series D Registrable
Securities, voting or acting separately as a class, and a majority of
the Series E Registrable Securities, voting or acting separately as a
class, enter into any agreement with any holder or prospective holder
of any securities of the Company that would grant such holder any
registration rights with respect to such securities."
8. Section 4.4 of the Agreement shall be deleted in its entirety and,
effective with the execution of this Amendment, the following shall be inserted
in lieu thereof:
"The rights of first refusal established by this Section 4
shall terminate upon either (a) the date of the Initial Offering or (b)
with respect to Investors holding Series A Convertible Preferred Stock
or Series B Convertible Preferred Stock, if fewer than 30% of the
number of such Shares that are outstanding (or in the case of Series B
Convertible Preferred Stock, that are issuable upon the exercise of an
option therefor that is outstanding) as of the date of this Agreement
remain outstanding or (c) with respect to Investors holding Series C
Convertible Preferred Stock or Series C-1 Convertible Preferred Stock,
if fewer than 20% of the number of such shares that are outstanding
(or, in the case of Series C-1 Convertible Preferred Stock, that are
issuable upon the exercise of options therefor that are outstanding) as
of the date of this Agreement remain outstanding or (d) with respect to
Investors holding Series D Convertible Preferred Stock or Series D-1
Convertible Preferred Stock, if fewer than 30% of the number of such
shares that are outstanding (or, in the case of Series D-1 Convertible
Preferred Stock that are issuable upon the exercise of Warrants
therefor that are outstanding) as of the date of this Agreement remain
outstanding or (e) with respect to Investors holding Series E
Convertible Preferred Stock, if fewer than 30% of the number of such
shares that are outstanding as of the date of this Agreement remain
outstanding."
- 3 -
9. Section 5.5(a) of the Agreement shall be deleted in its entirety
and, effective with the execution of this Amendment, the following shall be
inserted in lieu thereof:
"Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company, the
holders of a majority of the Series A Registrable Securities, voting as
a separate class, the holders of a majority of the Series C Registrable
Securities, voting as a separate class, the holders of two-thirds of
the Series D Registrable Securities, voting as a separate class, and
the holders of two-thirds of the Series E Registrable Securities,
voting as a separate class, provided in such case, that all such
Holders are affected by such amendment in a substantially similar
fashion."
10. Section 5.5(b) of the Agreement shall be deleted in its entirety
and, effective with the execution of this Amendment, the following shall be
inserted in lieu thereof:
"Except as otherwise expressly provided herein, the
obligations of the Company and the rights of the Holders under this
Agreement may be waived only with the written consent of the holders of
at least a majority of the Series A Registrable Securities , voting as
a separate class, the holders of a majority of the Series C Registrable
Securities, voting as a separate class, the holders of two-thirds of
the Series D Registrable Securities, voting as a separate class and the
holders of two-thirds of the Series E Registrable Securities, voting as
a separate class, provided in such case, that all such Holders are
affected by such waiver in a substantially similar fashion."
11. Wherever the Agreement is itself referred to in the Agreement, or
wherever there are references in the Agreement to "hereunder," "hereof,"
"herein," or words of like import, they shall mean the Agreement, as amended
hereby.
12. Each Purchaser hereby agrees to be bound by all the terms and
conditions of, and is hereby granted all of the rights of an "Investor" and
"Holder" under the Agreement as though such Purchaser had been an original party
to the Agreement, and by executing this Amendment, the Purchaser becomes a party
thereto and is bound thereby. The Company and the Original Parties acknowledge
that they remain bound by all the terms and conditions of the Agreement, as
amended hereby. The Agreement , as amended, is and shall continue to be in full
force and effect and is hereby in all respects ratified and confirmed.
13. All notices, pursuant to Section 5.7 of the Agreement, shall be
addressed to each Purchaser as provided in the Series E Purchase Agreement.
14. This Amendment No. 2 shall in all respects be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware.
- 4 -
15. General.
(a) Any party's failure to enforce any provision or provisions
of this Amendment No. 2 shall not in any way be construed as a waiver of any
such provision or provisions, nor shall such failure to enforce prevent that
party thereafter from enforcing each and every other provision of this Amendment
No. 2. The rights granted to the parties herein are cumulative and shall not
constitute a waiver of any party's right to assert all other legal remedies
available to it under the circumstances.
(b) This Amendment No. 2 may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument.
(c) Each Purchaser agrees upon request to execute any further
documents or instruments necessary or desirable to carry out the purposes or
intent of this Amendment No. 2 or the Agreement.
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands as of the day and year first above written.
COMPANY:
VASTERA, INC.
By:____________________________
Arjun Rishi
President
{ADDITIONAL PARTIES' SIGNATURES ON FOLLOWING PAGES.}
- 5 -
EXECUTION COPY
ORIGINAL PARTIES' SIGNATURES:
ORIGINAL PARTY
_____________________________________
[Purchaser Name]
By:__________________________________
Name:________________________________
[Print Name]
Title:_______________________________
EXECUTION COPY
PURCHASERS' SIGNATURES:
PURCHASERS'
_____________________________________
[Purchaser Name]
By:__________________________________
Name:________________________________
[Print Name]
Title:_______________________________
