EXHIBIT 4.2
AMENDED AND RESTATED
RIGHTS AGREEMENT
This Amended and Restated Rights Agreement (the "Agreement") is made as of
this 8th day of December, 1999, by and among (a) AUNET Corporation, a California
corporation (the "Corporation"), (b) the purchasers of Series A Preferred Stock
(the "Series A Purchasers"), the purchasers of Series Al Preferred Stock (the
"Series Al Purchasers"), the purchasers of Series B Preferred Stock and warrants
to purchase Series B Preferred Stock (the "Series B Warrants") ("Series B
Purchasers"), the purchasers of Series C Preferred Stock and Warrants for Common
Stock (the "Common Warrants") (the "Series C Purchasers") and the holders of
warrants to purchase Common Stock issued in connection with the issuance of
Promissory Notes dated on or about August 5, 1999 (the "Debt Warrants" and,
collectively with the Common Warrants and the Series B Warrants, the
"Warrants"), the "Warrants") (the "Warrant Holders," and collectively with the
Series A Purchasers, the Series Al Purchasers, the Series B Purchasers and the
Series C Purchasers, the "Original Purchasers") as listed on Schedule I attached
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hereto, (c) the purchasers of Series D Preferred Stock (the "Series D
Purchasers") listed on Schedule II attached hereto (the Series A Purchasers, the
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Series Al Purchasers, the Series B Purchasers, the Series C Purchasers, the
Warrant Holders and the Series D Purchasers being collectively referred to as
the "Purchasers"); and (e) the holders of Common Stock listed on Schedule III
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attached hereto (the "Common Holders"). This Agreement amends and restates that
certain Amended and Restated Registration Rights Agreement dated August 5, 1998
by and among the Corporation, the Series A Purchasers, the Series Al Purchasers,
the Series B Purchasers and the Series C Purchasers (the "Amended Agreement").
RECITALS
A. The Amended Agreement gives the Purchasers certain registration rights,
rights of first refusal and other rights.
B. Concurrent with the execution and deliver of this Agreement, the Series
D Purchasers are purchasing up to 43,000,000 shares of the Corporation's Series
D Preferred Stock (the "Series D Preferred") pursuant to a Series D Preferred
Stock Purchase Agreement dated the date hereof (the "Series D Purchase
Agreement").
C. The Series D Purchasers have required that the other parties hereto
execute and deliver this Agreement pursuant to Section 5.4 of the Series D
Purchase Agreement dated the date hereof.
D. The Corporation wishes to grant and the Series D Purchasers wish to
receive certain registration rights, rights of first refusal and other rights,
and the Corporation and the Original Purchasers desire to conform such rights of
all Purchasers in accordance with the terms and conditions of this Agreement.
E. The Corporation and the Purchasers contemplate an additional closing
with respect to the sale of additional shares of the Series D Preferred which
may occur on before March 1, 2000 and accordingly, this Agreement shall be
automatically amended so that Agreement shall apply by its terms to the
Purchasers of such additional shares of Series D Preferred.
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NOW, THEREFORE, in reliance on the foregoing recitals, and in and for the
mutual covenants and consideration set forth herein, the; parties hereto agree
as follows:
1. Certain Definitions. As used in this Agreement, the following term
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shall have the following respective meanings:
1.1 "Affiliate" and "Affiliated" shall refer to any person who is an
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"affiliate" as defined in Rule l2b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended. For purposes of this
definition, "person" shall mean any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, governmental authority or other entity of any kind, and shall include
any successor (by merger or otherwise) of such entity.
1.2 "Commission" shall mean the Securities and Exchange Commission
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or any other federal agency at the time administering the Securities Act.
1.3 "Common Stock" shall mean the Corporation's Common Stock, no par
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value.
1.4 "Conversion Stock" means the Common Stock issued or issuable
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pursuant to conversion of the Preferred Stock.
1.5 "Holder" shall mean (a) any Series A Purchaser, (b) any Series
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Al Purchaser, (c) any Series B Purchaser, (d) any Series C Purchaser (e) any
Series D Purchaser or (f) any holder of Warrants, in each case holding
Registrable Securities and any person holding Registrable Securities to whom the
rights under this Agreement have been transferred in accordance with Section 14
hereof.
1.6 "Initiating Holders" shall mean any Holder or Holders (other
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than the Warrant Holders in their capacity as holders of Warrants) holding, in
the aggregate, not less than fifty percent (50%) of the then outstanding
Registrable Securities.
1.7 "Major Holder" shall mean each Holder who is a holder of at
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least 250,000 shares of Registrable Securities (as adjusted for any stock split,
stock dividend or similar capital reorganization), and permitted assignees under
Section 17.2(d) hereof. For the purpose of determining a Major Holder's rights
under this Agreement, all shares beneficially owned by Affiliated entities or
persons shall be aggregated together and all shares held by investors for whom
the Xxxxxxx Capital Group LLC ("Xxxxxxx") is acting hereunder shall be
aggregated together. In the event of any such aggregation, the aggregating
persons and entities shall designate in writing from time to time one of all
aggregating persons and entities, and the Corporation shall be entitled to rely
upon the authority of such designee as the legal representative hereunder of all
such persons and entities.
1.8 "Preferred Stock" shall mean (i) the Corporation's Series A
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Preferred Stock, no par value, issued pursuant to those certain Series A
Purchase Agreements dated August 10, 1995, November 1, 1995 and November 30,
1995, (ii) the Corporation's Series Al Preferred Stock, no par value, issued
pursuant to the exercise of the Series A1 Preferred Stock Warrant on December
23, 1996, (iii) the Corporation's Series B Preferred Stock, no par value, issued
pursuant to the Series B Purchase Agreements dated October 11, 1996 and April 1,
1997, and issuable upon exercise of the
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Series B Warrants, (iv) the Corporation's Series C Preferred Stock, no par
value, issued pursuant to the Series C Preferred Stock and Warrant Purchase
Agreement dated August 5, 1998, and (v) the Corporation's Series D Preferred
Stock, no par value, issued pursuant to the Series D Purchase Agreement dated on
or about the date hereof.
1.9 "Registrable Securities" means (i) the Conversion Stock, (ii)
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the Common Stock issuable upon exercise of the Warrants, and (iii) any Common
Stock of the Corporation issued or issuable in respect of the Conversion Stock
or the Common Stock issuable upon exercise of the Warrants, upon any stock
split, stock dividend, recapitalization or similar event or otherwise issued or
issuable in respect of the Conversion Stock or Common Stock issuable upon
exercise of the Warrants; provided, however, that shares of Common Stock or
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other securities shall only be treated as Registrable Securities until the
earlier of (A) such time as such securities have been sold to or through a
broker or dealer or underwriter in a public distribution or a public securities
transaction or (B) such time as all securities held by a Holder may be sold
under Rule 144 within a three-month period or such securities are otherwise
available for sale in the opinion of counsel to the Corporation in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act such that a transfer restrictions and restrictive legends with
respect thereto may be removed upon the consummation of such sale.
1.10 The terms "register," "registered" and "registration" refer to
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a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
1.11 "Registration Expenses" shall mean all expenses, except as
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otherwise stated below, incurred by the Corporation in complying with Sections
5, 6 and 7 hereof, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Corporation and the reasonable fees and
expenses of counsel to the Purchasers, if any, 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
Corporation which shall be paid in any event by the Corporation and Selling
Expenses).
1.12 "Restricted Securities" shall mean the securities of the
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Corporation required to bear the legend set forth in Section 3 hereof.
1.13 "Securities Act" shall mean the Securities Act of 1933, as
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amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall in effect at the time.
1.14 "Selling Expenses" shall mean all underwriting discounts,
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selling commissions and stock transfer taxes applicable to the securities
registered by the Holders.
1.15 "Significant Holder" shall mean each Holder who is a holder of
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at least 500,000 shares of Registrable Securities (as adjusted for any stock
split, stock dividend or similar capital reorganization and the like), and
permitted assignees under Section 17.2(d) hereof. For the purpose of determining
a Significant Holder's rights under this Agreement, all shares beneficially
owned by Affiliated entities or persons shall be aggregated together and all
shares held by investors for whom the Xxxxxxx Capital Group LLC ("Xxxxxxx") is
acting hereunder shall be aggregated together. In the event of any such
aggregation, the aggregating persons and entities shall designate in
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writing from time to time one of all aggregating persons and entities, and the
Corporation shall be entitled to rely upon the authority of such designee as the
legal representative hereunder of all such persons and entities.
1.16 "Warrant Common" shall mean any Common Stock of the Corporation
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issued or issuable upon exercise of the Common Warrants or the Debt Warrants.
2. Restrictions on Transferability. The Preferred Stock, the shares of
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Common Stock issuable upon exercise of the Warrants and the Conversion Stock
shall not be sold, assigned, transferred or pledged except upon the conditions
specified in this Agreement, which conditions are intended to ensure compliance
with the provisions of the Securities Act. Each Purchaser will cause any
proposed purchaser, assignee, transferee or pledgee of the Preferred Stock, the
shares of Common Stock issuable upon exercise of the Warrants or such Common
Stock held by such Purchaser to agree to take and hold such securities subject
to the provisions and upon the conditions specified in this Agreement.
3. Restrictive Legend. Each certificate representing (i) the Preferred
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Stock, (ii) the Conversion Stock, (iii) the Warrant Common, (iv) the Warrants,
and (v) any other securities issued in respect of the Preferred Stock, the
Conversion Stock, the Warrant Common or the Warrants upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event shall (unless
otherwise permitted by the provisions of Section 4 below) be stamped or
otherwise imprinted with the following legend (in addition to any legend
required under applicable state securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH
SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS THE CORPORATION RECEIVES AN OPINION
OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH
SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT. COPIES OF THE
AGREEMENTS COVERING THE PURCHASE OF THESE SHARES AND
RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE) BY THE HOLDER OF RECORD OF THIS
CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION."
Each Purchaser consents to the Corporation making a notation on its
records and giving instructions to any transfer agent of the Preferred Stock,
the Warrant Common, the Common Stock or the Warrants in order to implement the
restrictions on transfer established in this Registration.
4. Notice of Proposed Transfers. The holder of each certificate
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representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 4. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities
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(other than (i) a transfer not involving a change in beneficial ownership or
(ii) in transactions involving the distribution without consideration of
Restricted Securities by any of the Purchasers to any of its (A) constituent
partners or members, or retired constituent partners or members, or to the
estate of any of such partners or members or retired partners or members or (B)
at least majority-owned subsidiaries, so long as each such transferee agrees in
writing to be bound by the terms of this Agreement, the Series A Purchase
Agreement, the Series A1 Purchase Agreement, the Series B Purchase Agreement,
the Series C Preferred Stock and Warrant Purchase Agreement, the Warrants or the
Series D Purchase Agreement, as applicable), unless there is in effect a
registration statement under the Securities Act covering the proposed transfer,
the holder thereof shall give written notice to the Corporation of such holder's
intention to effect such transfer, sale, assignment or pledge. Each such notice
shall describe the manner and circumstances of the proposed transfer, sale,
assignment or pledge in sufficient detail, and shall be accompanied, at such
holder's expense by either (a) an unqualified written opinion of legal counsel
who shall and whose legal opinion shall be, reasonably satisfactory to the
Corporation addressed to the Corporation, to the effect that the proposed
transfer of the Restricted Securities may be effected without registration under
the Securities Act or (b) a "no action" letter from the Commission to the effect
that the transfer of such securities without registration will not result in a
recommendation by the staff of the Commission that action be taken with respect
thereto, whereupon the holder of such Restricted Securities shall be entitled to
transfer such Restricted Securities in accordance with the terms of the notice
delivered by the holder to the Corporation. Notwithstanding the foregoing, no
such "no action" letter or opinion of counsel shall be necessary for a transfer
by a Purchaser if the Purchaser is a partnership or limited liability
corporation to a constituent partner or member of such entity or retired
constituent partner or member, or the transfer by gift, will or intestate
succession of any such entity partner or member to his or her spouse or to the
siblings, lineal descendents or ancestors of such partner or member or his or
her spouse. Each certificate evidencing the Restricted Securities transferred as
above provided shall bear, except if such transfer is made pursuant to Rule 144,
the appropriate restrictive legend set forth in Section 3 above, except that
such certificate shall not bear such restrictive legend if, in the opinion of
counsel for such Holder and the Corporation, such legend is not required in
order to establish compliance with any provision of the Securities Act.
5. Demand Registration
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5.1 Notice of Registration; Registration. In case the Corporation
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shall receive from Initiating Holders a written request that the Corporation
effect any registration, qualification or compliance (other than a registration
on Form S-3 or any successor form) with respect to at least 50% of the
Registrable Securities (or any lesser percentage if the aggregate offering price
to the public would be more than $10,000,000), the Corporation will:
(a) promptly give written notice of the proposed registration to
all other Holders; and
(b) as soon as practicable, use its best efforts to effect such
registration, qualification or compliance (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations; issued under the Securities
Act) as way be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are specified
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in a written request given within fifteen (15) days after receipt of such
written notice from the Corporation; provided that the Corporation shall not be
obligated to take any action to effect any such registration, qualification or
compliance pursuant to this Section 5:
(1) In any particular jurisdiction in which the Corporation
would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance unless the Corporation
is already subject to service in such jurisdiction and except as may be required
by the Securities Act;
(2) Prior to the earlier of January 1, 2003 or the date one
hundred eighty (180) days after the effective date of the registration statement
pertaining to the first underwritten firm commitment public offering of
securities of the Corporation for its own account (other than a registration
relating solely to a Commission Rule 145 transaction or a registration relating
solely to employee benefit plans);
(3) After the Corporation has effected two (2) registrations
(other than registrations on Form S-3 or any successor form) pursuant to this
Section 5 and such registrations have been declared or ordered effective and the
securities offered pursuant to such registrations have been sold; or
(4) If at the time of the request to register Registrable
Securities the Corporation gives notice within fifteen (15) days of such request
that it is engaged or has fixed plans to engage within ninety (90) days of the
time of the request in a firmly underwritten registered public offering as to
which the Holders may include Registrable Securities pursuant to Section 5, 6 or
7 hereof.
Subject to the foregoing clauses (1) through (4) and to Section 5.3, the
Corporation shall file a registration statement covering the Registrable
Securities so requested to be registered as soon as practicable after receipt of
the request of the Initiating Holders.
5.2 Underwriting.
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(a) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Corporation as a part of their request made pursuant to Section 5 and
the Corporation shall include such information in the written notice referred to
in Section 5.1. The right of any Holder to registration pursuant to Section 5
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 requested (unless otherwise mutually agreed by a majority in interest of
the Initiating Holders and such Holder) to the extent provided herein.
(b) The Corporation shall (together with all Holders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
(the "Underwriter") selected for such underwriting by a majority in interest of
the Initiating Holders and consented to by the Corporation, which consent shall
not be unreasonably withheld. Notwithstanding any other provision of this
Section 5, if the Underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten and so advises the
Initiating Holders in writing, then the Initiating Holders shall so advise all
Holders (except those Holders who have indicated to the Corporation their
decision not to distribute any of
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their Registrable Securities through such underwriting) and the number of shares
of Registrable Securities that may be included in the registration and
underwriting shall be allocated among all such Holders in proportion, as nearly
as practicable, to the respective amounts of Registrable Securities owned by
such Holders at the time of filing the registration statement. No Registrable
Securities excluded from the underwriting by reason of the Underwriters'
marketing limitation shall be included in such registration.
(c) If any Holder disapproves of the terms of the underwriting, such
person may elect to withdraw therefrom by written notice to the Corporation, the
Underwriter and the Initiating Holders. The Registrable Securities and/or other
securities so withdrawn from such underwriting shall also be withdrawn from such
registration; provided, however, that, if by the withdrawal of such Registrable
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Securities a greater number of Registrable Securities held by other Holders may
be included in such registration (up to the maximum of any limitation imposed by
the Underwriter), then the Corporation shall offer to all Holders who have
included Registrable Securities in the registration the right to include
additional Registrable Securities in the same proportions used above in
determining the Underwriter limitation.
(d) If the Underwriter has not limited the number of Registrable
Securities to be underwritten the Corporation may include securities for its own
account or the account of others in such registration if the Underwriter so
agrees and if the number of Registrable Securities which would otherwise have
been included in such registration and underwriting will not thereby be limited.
5.3 Delay of Registration. If the Corporation shall furnish to the
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Initiating Holders a certificate signed by the President of the Corporation
stating that, in the good faith judgment of the Board of Directors of the
Corporation, it would be not in the best interests of the Corporation and its
shareholders for such registration statement to be filed on or before the date
filing would be required and it is therefore appropriate to defer the filing of
such registration statement, then the Corporation may direct that such request
for registration be delayed for a period not in excess of one hundred twenty
(120) days, such right to delay a request to be exercised by the Corporation not
more than once in any twelve (12) month period.
6. Company Registration
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6.1 Notice of Registration. If at any time or from time to time the
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Corporation shall determine to register any of its equity securities, either for
its own account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans, or (ii) a registration
relating solely to a Rule 145 transaction, the Corporation will:
(a) promptly give to each Holder written notice thereof; and
(b) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made within fifteen (15) days after receipt of such written notice
from the Corporation, by any Holder.
6.2 Underwriting. If the registration of which the Corporation gives
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notice is for a registered public offering involving an underwriting, the
Corporation shall so advise the Holders as
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a part of the written notice given pursuant to Section 6.1(a). In such event,
the right of any Holder to registration pursuant to this Section 6 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall (together with the Corporation and other holders distributing
their securities through such underwriting) enter into an underwriting agreement
in customary form with the Underwriter selected for such underwriting by the
Corporation. Notwithstanding any other provision of this Section 6, if the
Underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the Underwriter may limit the Registrable
Securities to be included in such registration; provided, however, that in no
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public offering shall other holders of "piggyback" registration rights or other
security holders participate in such offering unless the Holders (other than any
Company officers who may be Holders) have participated to the full extent
requested. The Corporation shall so advise all Holders and other holders
distributing their securities through such underwriting. So long as all Holders
have participated in the offering to the extent requested, then the number of
shares of Registrable Securities that may be included in the registration and
underwriting shall be allocated among such other holders in proportion, as
nearly as practicable, to the respective amounts of Registrable Securities held
by such other holders at the time of filing the registration statement. To
facilitate the allocation of shares in accordance with the above provisions, the
Corporation may round the number of shares allocated to any Holder or holder to
the nearest one hundred (100) shares. If any Holder disapproves of the terms of
any such underwriting, he may elect to withdraw therefrom by written notice to
the Corporation and the Underwriter. Any securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration, and shall not be
transferred in a public distribution prior to ninety (90) days after the
effective date of the registration statement relating thereto, or such other
shorter period of time as the Underwriter may require.
6.3 Right to Terminate Registration. The Corporation shall have the
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right to terminate or withdraw any registration initiated by it under this
Section 6 prior to the effectiveness of such registration regardless of whether
any Holder has elected to include securities in such registration.
7. Registration on Form S-3
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7.1 If any Holder or Holders request that the Corporation file a
registration statement on Form S-3 (or any successor form to Form S-3) for a
public offering of shares of the Registrable Securities the reasonably
anticipated aggregate price to the public of which, net of underwriting
discounts and commissions, would exceed $2,500,000, and the Corporation is a
registrant entitled to use Form S-3 to register the Registrable Securities for
such an offering, the Corporation shall use its best efforts to cause such
Registrable Securities to be registered for the offering on such form and to
cause such Registrable Securities to be qualified in such jurisdictions as the
Holder or Holders may reasonably request; provided, however, that the
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Corporation shall not be required to effect more than two (2) registrations
pursuant to this Section 7 in any twelve (12) mouth period. The substantive
provisions of Section 5.2 shall be applicable to each registration initiated
under this Section 7.
7.2 Notwithstanding the foregoing, the Corporation shall not be
obligated to take any action pursuant to this Section 7: (i) in any particular
jurisdiction in which the Corporation would be required to execute a general
consent to service of process in effecting such registration, qualification or
compliance unless the Corporation is already subject to service in such
jurisdiction
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and except as may be required by the Securities Act, (ii) if the Corporation,
within fifteen (15) days of the receipt of the request of the Holders, gives
notice of its bona fide intention to effect the filing of a registration
statement with the Commission within ninety (90) days of receipt of such request
(other than with respect to a registration Statement relating to a Rule 145
transaction, an offering solely to employees or any other registration which is
not appropriate for the registration of Registrable Securities) in which such
Holders can exercise their rights pursuant to Section 6 hereof, (iii) during the
period starting with the date ninety (90) days prior to the Corporation's
estimated date of filing of, and ending on the date one hundred eighty (180)
days immediately following, the effective date of any registration statement
pertaining to securities of the Corporation (other than a registration of
securities in a Rule 145 transaction or with respect to an employee benefit
plan), provided that the Corporation is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective; or
(iv) if the Corporation shall furnish to such Holder a certificate signed by the
President of the Corporation stating that in the good faith judgment of the
Board of Directors it would be seriously detrimental to the Corporation or its
shareholders for registration statements to be filed in the near future, then
the Corporation's obligation to use its best efforts to file a registration
statement shall be deferred for a period not to exceed one hundred twenty (120)
days from the receipt of the request to file such registration by such Holder
such right to delay a request to be exercised by the Corporation not more than
once in any twelve (12) month period.
8. Limitations on Subsequent Registration Rights. From and after the date
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of this Agreement, the Corporation shall not, without the consent of Holders of
a majority of the Registrable Securities, enter into any agreement granting any
holder or prospective holder of any securities of the Corporation registration
rights with respect to such securities. Upon such consent, such holder shall
execute a counterpart of this Agreement, and upon execution thereof by such
additional party and by the Corporation, shall be considered a Holder for all
purposes of this Agreement.
9. Expenses of Registration. All Registration Expenses incurred in
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connection with all registrations pursuant to Sections 5, 6 and 7 shall be borne
by the Corporation. All Selling Expenses relating to securities registered on
behalf of the Holders shall be borne by the Holders of such securities pro rata
on the basis of the number of shares so registered. Notwithstanding anything in
this Section 9 to the contrary, if the Corporation and/or others include
securities for their own account pursuant to Section 5.2, then the Corporation
and such others shall bear their pro rata share of the Selling Expenses. In
connection with any registration pursuant to Sections 5, 6 and 7, the
Corporation will pay reasonable fees and disbursements of one special counsel to
the Holders incurred in so representing such participating Holders.
10. Registration Procedures. In the case of each registration,
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qualification or compliance effected by the Corporation pursuant to this
Agreement, the Corporation will keep each Holder advised in writing as to the
initiation of each registration, qualification and compliance and as to the
completion thereof. At its expense, the Corporation will:
(a) Prepare and file with the Commission a registration statement with
respect to such securities and use its best efforts to cause such registration
statement to become and remain effective for at least one hundred eighty (180)
days or until the distribution described in the Registration Statement has been
completed;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may
Page 10
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 participating in such registration and to
the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities and such other information
necessary to allow the Holders participating in such registration to remain
reasonably informed about the public offering.
(d) use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided 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 an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering; each Holder participating
in such underwriting also shall enter into and perform its obligations under
such an agreement;
(f) notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, such obligation to continue for one hundred twenty (120) days;
(g) cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed;
(h) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number far all such
Registrable Securities, in each case not later than the effective date of such
registration statement; and
(i) use its best efforts to furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to this Section 10,
on the date that such Registrable Securities are delivered to the underwriters
for sale in connection with a registration pursuant to this Section 10, 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 such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a letter
dated 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, addressed
to the underwriters, if any, and to the Holders requesting registration of
Registrable Securities.
Page 11
11. Indemnification
---------------
11.1 To the extent permitted by law, the Corporation will indemnify
each Holder, each of its officers and directors and partners, and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
with respect to which registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter within the meaning of Section 15 of the
Securities Act against all expenses, claims, losses, damages or liabilities (or
actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading or any violation or alleged violation by the
Corporation of the Securities Act or any rule or regulation promulgated under
the Securities Act applicable to the Corporation in connection with any such
registration, qualification or compliance, and the Corporation will reimburse
each such Holder, each of its officers and directors, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred as
such expenses are incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action, provided that the
Corporation will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to the
Corporation by an instrument duly executed by such Holder, controlling person or
underwriter and stated to be specifically for use therein.
11.2 To the extent permitted by law, each Holder will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Corporation, each of its directors and officers, each underwriter, if any, of
the Corporation's securities covered by such a registration statement, each
person who controls the Corporation or such underwriter within the meaning of
Section 15 of the Securities Act, and each other such Holder, each of its
officers and directors and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Corporation, such Holders, such directors,
officers, persons, underwriters or control persons for any legal or any other
expenses reasonably incurred as such expenses are incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Corporation by an instrument duly executed by such Holder and stated to be
specifically for use therein. Notwithstanding the foregoing, the liability of
each Holder under this subsection 11.2 shall be limited to an amount equal to
the net proceeds received by such Holder from the sale of Registrable Securities
hereunder, unless such liability arises out of or is based on willful conduct by
such Holder.
Page 12
11.3 Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.
11.4 Each party entitled to indemnification under this Section 11 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and, provided further, that the failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying Party
of its obligations under this Agreement unless the failure to give such notice
is materially prejudicial to an Indemnifying Party's ability to defend such
action and, provided further, that the Indemnifying Party shall not assume the
defense for matters as to which there is a conflict of interest or separate and
different defenses. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
11.5 The obligations of the Company and Holders under this Section 11
shall survive the completion of any offering of Registrable Securities pursuant
to this Agreement.
12. Information by Holder. The Holder or Holders of Registrable Securities
---------------------
included in any registration shall furnish to the Corporation such information
regarding such Holder or Holders, the Registrable Securities held by them and
the distribution proposed by such Holder or Holders as the Corporation may
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
13. Rule 144 Reporting. With a view to making available the benefits of
------------------
certain rules and regulations of the Commission that may at any time permit the
sale of the Restricted Securities to the public without registration, after such
time as a public market exists for the Common Stock of the Corporation, the
Corporation agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the date that the Corporation becomes subject to the reporting requirements of
the Securities Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(b) Use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Corporation under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements);
(c) So long as a Purchaser owns any Restricted Securities to furnish
to the Purchaser forthwith upon request a written statement by the Corporation
as to its compliance with the reporting requirements of said Rule 144 (at any
time after ninety (90) days after the effective date of
Page 13
the first registration statement filed by the Corporation for an offering of its
securities to the general public), and of the Securities Act and the Exchange
Act (at any time after it has become subject to such reporting requirements), a
copy of the most recent annual or quarterly report of the Corporation, and such
other reports and documents of the Corporation and other information in the
possession of or reasonably obtainable by the Corporation as a Purchaser may
reasonably request in availing itself of any rule or regulation of the
Commission allowing a Purchaser to sell any such securities without
registration.
14. Transfer of Registration Rights. The rights to cause the Corporation
--------------------------------
to register securities granted Holders under Sections 5, 6 and 7 may be assigned
to a transferee or assignee reasonably acceptable to the Corporation in
connection with any transfer or assignment of Registrable Securities by a
Holder, provided that: (i) such transfer may otherwise be effected in accordance
with applicable securities laws, (ii) such assignee or transferee acquires at
least 100,000 shares of Preferred Stock and/or Common Stock issued upon
conversion thereof (as may be appropriately adjusted upon any stock, split,
stock dividend, recapitalization, merger, consolidation or similar event), and
(iii) such assignee or transferee agrees to be bound by the terms of this
Agreement and assumes all of the obligations of the transferring Holder
hereunder. Notwithstanding the foregoing, the rights to cause the Corporation to
register securities may be assigned to any constituent partner or member of a
Holder (including spouses and ancestors, final descendants and siblings of such
partners or members or spouses who acquire registered securities by gift, will
or intestate succession) without compliance with items (ii) or (iii) above,
provided written notice thereof is promptly given to the Corporation.
15. Standoff Agreement. Each holder of Registrable Securities (including
------------------
any transferee thereof) agrees in connection with the first two underwritten
registrations of the Corporation's equity securities with the Securities and
Exchange Commission, other than (i) a registration relating solely to employee
benefit plans or (ii) a registration relating solely to a Rule 145 transaction
upon request of the underwriters managing such underwritten offering of the
Corporation's securities, not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of any of the Corporations
securities, including any Registrable Securities (other than those included in
the registration), without the prior written consent of such underwriters for
such period of time (not to exceed one hundred eighty (180) days in the case of
an initial public offering and ninety (90) days in the case of any subsequent
public offering) from the effective date of such registration, as may be
requested by the underwriters. Each such holder further agrees to execute any
agreement reflecting the above as may be requested by the underwriters at the
time of the public offering; provided, however, that the officers and directors
of the Corporation who own stock of the Corporation also agree to such
restrictions.
16. Termination of Registration Rights. The rights granted pursuant to
----------------------------------
Sections 1 through 14 of this Agreement shall terminate as to any Holder five
(5) years after the closing of the first firmly underwritten public offering
pursuant to an effective registration statement under the Securities Act
covering the offer and sale of Common Stock to the public at a per share public
offering price (prior to underwriter commissions and expenses) of $6.50
(adjusted for stock splits and the like) or more and total gross offering
proceeds to the Corporation of not less than $20 million (a "Qualified Public
Offering").
Page 14
17. Right of First Refusal
----------------------
17.1 Amendment and Waiver of Prior Right. The holders of Series A
------------------------------------
Preferred, Series A1 Preferred, Series B Preferred and Series C Preferred
entering into this Agreement hereby agree, on behalf of all Major Holders under
the Amended Agreement, to amend the rights of first refusal of the Major Holders
set forth in Section 17 of the Amended Agreement (the "Prior Right") so that
such rights shall not apply to the Series D Preferred being issued and sold at
one or more closings pursuant to the Series D Purchase Agreement (together with
the Common Stock issuable upon conversion of such Series D Preferred), to the
extent such securities are issued and sold at one or more closings pursuant to
such agreement. The parties acknowledge that the amendment and waiver herein is
necessary to enable the Corporation to secure adequate financing, while
preserving the relative rights of the Major Holders as among themselves. In
addition, each Purchaser entering into this Agreement hereby waives its Prior
Right with respect to the Series D Preferred being issued and sold at one or
more closings pursuant to the Series D Purchase Agreement. The waiver and
amendment of the Major Holders' Prior Right as provided herein shall apply only
to the issuance of Series D Preferred as contemplated hereby and the underlying
Common Stock, and the Major Holders' rights with respect to future equity
issuances by the Company shall be as set forth below.
17.2 New Issuances. The Corporation hereby grants to each Major Holder
-------------
a right of first refusal (the "Right of First Refusal") to purchase all (or any
part) of such Major Holder's pro rata portion of any New Securities (as defined
in this Section 17), that the Corporation may, from time to time propose to sell
and issue. Such pro rata portion, for purposes of this Right of First Refusal,
shall be the ratio of (x) the number of shares of Common Stock issued and
issuable upon the conversion of the shares of Preferred Stock held by such Major
Holder or the exercise of Warrants held by such Major Holder to (y) the sum of
the total number of shares of Common Stock held or capable of being held by all
Stockholders, Warrant Holders and Option Holders of the Corporation (assuming
full exercise and conversion of all exercisable and convertible securities).
This Right of First Refusal shall be subject to the following provisions:
(a) "New Securities" shall mean any Common Stock or Preferred Stock of
--------------
the Corporation regardless of whether authorized on the date hereof; rights,
options, warrants to purchase Common Stock or Preferred Stock together with
securities of any type issued in conjunction with any such rights, options or
warrants and securities of any type whatsoever that are, or may become,
convertible into or exchangeable for Common Stock or Preferred Stock, provided,
--------
however, that New Securities does not include the following:
------- ---
(i) any shares of Series D Preferred issuable pursuant to the
Series D Purchase Agreement;
(ii) shares of Common Stock issuable upon conversion of the
Corporation's Preferred Stock;
(iii) shares of Common Stock or Series B Preferred Stock issuable
upon exercise of the Warrants;
(iv) securities of the Corporation issued or deemed issued
pursuant to the acquisition of a business, technology or product line by the
Corporation by merger,
Page 15
purchase of assets, or other acquisition or reorganization approved by the
Corporation's Board of Directors;
(v) securities of the Corporation issued in connection
with equipment lease arrangements or bank financing transactions approved by the
Corporation's Board of Directors; or
(vi) shares of Common Stock, or options to purchase shares
of Common Stock, issued or granted to officers, directors, employees and
consultants of the Corporation pursuant to stock plans, option plans or other
arrangements approved by the Corporation's Board of Directors;
(vii) shares of Common Stock or Preferred Stock issued in
connection with any stock split, stock dividend, or recapitalization by the
Corporation; and
(viii) shares of Common Stock issued in connection with the
Corporation's initial public offering of the Common Stock to the general public
effected pursuant to a registration statement filed with and declared effective
by the Commission under the Securities Act.
(b) In the event that the Corporation proposes to undertake an
issuance of New Securities, it shall give each Major Holder written notice of
its intention, describing the type of New Securities, the aggregate number of
such shares, the price, and the general terms upon which the Corporation
proposes to issue the same. Each Major Holder shall have twenty (20) business
days after receipt of such notice to agree to purchase its pro rata share of
such New Securities at the price and upon the terms specified in the notice by
giving written notice to the Corporation and stating therein the quantity of New
Securities to be purchased. If any Major Holder fails to agree to purchase its
full pro rata share (calculated pursuant to the first paragraph of Section 17.2)
within such twenty (20) business day period, the Corporation will give the Major
Holders who did so agree (the "Electing Major Holders") notice of the number of
shares that were not subscribed for. Such notice may be by telephone if
followed by written confirmation within two (2) days. The Electing Major
Holders shall have ten (10) business days from the date of such written notice
(or telephonic notification confirmed in writing) to agree to purchase the New
Securities not purchased by such non-purchasing Major Holders.
(c) In the event that all of the Major Holders fail to exercise
in full the Right of First Refusal within the twenty (20) business days plus ten
(10) business day period specified above, the Corporation shall have ninety (90)
days thereafter to sell (or enter into an agreement pursuant to which the sale
of New Securities covered thereby shall be closed, if at all, within sixty (60)
days from the date of said agreement) the New Securities respecting which the
rights of the Major Holders were not exercised at a price and upon terms no more
favorable to the purchasers thereof than specified in the Corporation's notice.
In the event the Corporation has not sold the New Securities within such ninety
(90) day period (or sold and issued New Securities in accordance with the
foregoing within sixty (60) days from the date of such agreement), the
Corporation shall not thereafter issue or sell any Now Securities, without first
offering such New Securities to the Major Holders in the manner provided above.
(d) The Right of First Refusal hereunder is not assignable, in
whole or in part, except (i) by a Major or Holder that is a partnership to any
of its partners, (ii) by a Major or
Page 16
Holder that is any venture capital group, private equity group or fund to an
Affiliated entity or person or (iii) by a Major Holder that is a corporation to
any of its shareholders.
(e) The Right of First Refusal granted under this Agreement
shall expire upon the first to occur of the following: (i) the closing of an
initial public offering of the Common Stock of the Corporation to the general
public which is effected pursuant to a registration statement filed with, and
declared effective by, the Commission under the Securities Act and (ii) as to a
specific Major Holder when such Major Holder holds fewer than 250,000 shares of
Registrable Securities.
18. Affirmative Covenants. The Corporation and each Purchaser hereby
---------------------
covenants and agrees as follows:
18.1 Financial Information
---------------------
(a) The Corporation shall furnish the following reports to each
Purchaser who holds at least 500,000 shares of Registrable Securities (as
adjusted for any stock split, stock dividend or similar capital reorganization
and the like):
(i) As soon as practicable after the end of each fiscal
year, and in any event within one hundred twenty (120) days thereafter, a copy
of the annual audit report (prepared in accordance with generally accepted
accounting principles) for such year for the Corporation and any subsidiary,
including therein consolidated balance sheets of the Corporation and any such
subsidiary as of the end of such fiscal year, consolidated statements of income
and shareholders equity and statements of cash flow of the Corporation and any
such subsidiary for such fiscal year, setting forth in each case in comparative
form the corresponding figures for the preceding fiscal year, all duly certified
by an independent public accounting firm selected by the Corporation's Board of
Directors;
(ii) As soon as practicable after the end of the first,
second and third quarterly accounting periods in each fiscal year of the
Corporation, and in any event within thirty (30) days thereafter, a consolidated
balance sheet of the Corporation as of the end of each such quarterly period,
and consolidated statements of income and shareholders equity and consolidated
statements of cash flows of the Corporation and any subsidiary for such period
and for the current fiscal year to date, prepared in accordance with generally
accepted accounting principles (other than for accompanying notes), subject to
changes resulting from year-end audit adjustments, and signed by the principal
financial or accounting officer of the Corporation; and
(iii) With respect to the financial statements called for in
subsections (i) and (ii) of this Section 18.1(a), an instrument executed by the
Chief Financial Officer or President of the Corporation and certifying that such
financial statements were prepared in accordance with generally accepted
accounting principles consistently applied with prior practice for earlier
periods (with the exception of footnotes that may be required by generally
accepted accounting principles) and fairly present the financial condition of
the Corporation and its results of operation for the period specified, subject
to period-end adjustment,
(b) The Corporation shall furnish the following reports to each
Major Holder:
Page 17
(i) As soon as practicable after the end of each month,
and in any event within thirty (30) days thereafter, consolidated balance sheets
of the Corporation and any subsidiary as of the and of such month, and
consolidated statements of income and shareholders' equity for each month and
for the current fiscal year to date, and comparing such results to the then
current business plan, prepared in accordance with generally accepted accounting
principles (other than for accompanying notes), subject to changes resulting
from year-end audit adjustments and signed by the principal financial or
accounting officer of the Corporation;
(ii) As soon as available (but in any event at least twenty
(20) days before the commencement of its fiscal year), an annual budget and
business plan prepared on a monthly basis for each fiscal year, and any
modifications thereto adopted through such fiscal year;
(iii) As soon as available (but in any event at least thirty
(30) days before the commencement of each fiscal quarter), a quarterly budget
and comprehensive operating budget forecasting the Company's revenue, expenses
and cash position prepared on a monthly basis for the upcoming fiscal quarter;
and
(iv) Such other information relating to the financial
condition, business, prospects or corporate affairs of the Corporation as the
Major Holder may from time to time reasonably request.
(c) The Corporation shall also afford each Major Holder, at the
principal offices of the Corporation, reasonable access to material documents of
the Corporation and rights to examine without undue disruption the facilities
and offices of the Corporation, upon at least five (5) days notice in advance of
such visit to the Corporation from such Major Holder and upon receipt of a
request from such Major Holder specifying which documents, offices and
facilities such Major Holder wishes to inspect five (5) days in advance of such
visit; but, in any event, not more than once every fiscal quarter.
(d) The covenants set forth in this Section 18.1 shall terminate
and be of no further force or effect at such time as the Corporation is required
to file reports pursuant to Section 13 or 15(d) of the Exchange Act.
(e) Notwithstanding any other provisions of this Section 18.1,
the Corporation may require as a condition precedent to any Major Holder's
rights under this Section 18.1, that each person proposing to attend any meeting
of the Board of Directors and each person to have access to any of the
information provided by the Corporation to its Board of Directors shall agree to
hold in confidence and trust and to act in a fiduciary manner with respect to
all information so received during such meetings or otherwise; and, provided,
--------
further, that the Corporation reserves the right not to provide such information
-------
to a Major Holder or its representative (or not to provide to a Major Holder
such portions the information which is sensitive vis a vis such Major Holder)
and to exclude such Major Holder or, its representative from any meeting or
portion thereof to the extent necessary to prevent the breach of attorney-client
privilege or if such Major Holder or its representative is affiliated with any
competitor (or serves on the Board of Directors of any competitor) of the
Corporation (including any of its direct or indirect subsidiaries).
18.2 Confidential Information. Each Purchaser agrees that any
------------------------
information obtained by such Purchaser pursuant to Section 18.1 which is marked
or identified as proprietary to
Page 18
the Corporation or otherwise confidential will not be disclosed without the
prior written consent of the Corporation. Notwithstanding the foregoing, each
Purchaser may disclose such information, on a need to know basis, to its
employees, accountants or attorneys, or to the employees, accountants or
attorneys of its general partner or investment manager (so long as each such
person to whom confidential information is disclosed agrees in writing to keep
such information confidential), in compliance with a court order or when
otherwise necessary to enforce any of the Purchases rights hereunder. Such
information may also be disclosed to a Purchaser's constituent partners, members
or shareholders (so long as each such person to whom confidential information is
disclosed agrees to keep such information confidential). Each Purchaser further
acknowledges and understands that any information will not be utilized by such
Purchaser in connection with purchases and/or sales of the Corporation's
securities except in compliance with applicable state and federal antifraud
statutes.
18.3 Assignment of Rights to Financial Information. The rights and
---------------------------------------------
obligations pursuant to Sections 18.1 and 18.2 may be assigned or otherwise
conveyed by any Significant Holder, Major Holder or Purchaser, as the case may
be, or by any subsequent transferee of any such rights to a transferee, upon
prior written notice to the Corporation, upon the transfer by such Significant
Holder of at least 500,000 shares, by such Major Holder of at least 250,000
shares or upon the transfer by such Purchaser of at least 50,000 shares, as the
case may be, of Registrable Securities to any transferee other than a competitor
or customer of the Corporation (including any of its direct or indirect
subsidiaries); provided, however, that the Corporation shall not be obligated
-------- -------
under Section 18.1 to provide information to any transferee that the Board of
Directors of the Corporation determines in good faith to be (or be affiliated
with or serve on the Board of Directors of) an actual or potential competitor,
customer or vendor of the Corporation.
18.4 Satisfaction of Management Rights Requirements. The Corporation
----------------------------------------------
shall accord the following rights to any Major Holder:
(a) upon their request, the right to receive the same
information as is provided to members of the Board of Directors of the
Corporation;
(b) upon a reasonable request of any such Major Holder and at
times during normal business hours, to receive income statements, balance
sheets, budgets, business plans, and other financial information, and to inspect
the books and records of the Corporation; and
(c) upon a reasonable request of any such Major Holder and at
times during normal business hours, to meet and consult with management with
respect to the business of the Corporation.
The Corporation and such Major Holders shall reasonably cooperate in good
faith to agree upon mutually satisfactory management rights from time to time.
19. Voting Agreement
----------------
(a) For so long as the Series D Purchasers hold not fewer than an
aggregate of 10,000,000 shares of Series D Preferred (as appropriately adjusted
for all stock splits, dividends, combinations, reclassifications and the like),
each of the Purchasers agrees to vote all of the shares of Common Stock, Series
A Preferred, Series A1 Preferred, Series B Preferred, Series C Preferred, Series
D Preferred or other securities of the Corporation entitled to vote in the
election of directors,
Page 19
to elect to the Corporation's Board of Directors a slate of nominees that
includes at least two (2) persons designated by holders of a majority of the
Series D Preferred.
(b) For so long as funds managed or advised by New Enterprise
Associates (or any successor) hold not fewer than an aggregate of 3,000,000
shares of Series A Preferred, Series B Preferred and Series C Preferred (as
appropriately adjusted for all stock splits, dividends, combinations,
reclassifications and the like), each of the Purchasers agrees to vote all of
the shares of Common Stock, Series A Preferred, Series A1 Preferred, Series B
Preferred, Series C Preferred, Series D Preferred or other securities of the
Corporation entitled to vote in the election of directors, to elect to the
Corporation's Board of Directors a slate of nominees that includes at least one
(1) person designated by funds managed or advised by New Enterprise Associates
(or any successor).
(c) For so long as funds managed or advised by Enterprise Partners
(or any successor) hold not fewer than an aggregate of 1,500,000 shares of
Series C Preferred (as appropriately adjusted for all stock splits, dividends,
combinations, reclassifications and the like), each of the Purchasers agrees to
vote all of the shares of Common Stock, Series A Preferred, Series A1 Preferred,
Series B Preferred, Series C Preferred, Series D Preferred or other securities
of the Corporation entitled to vote in the election of directors, to elect to
the Corporation's Board of Directors a slate of nominees that includes at least
one (1) person designated by funds managed or advised by Enterprise Partners (or
any successor).
(d) For so long as funds managed or advised by Institutional Venture
Partners (or any successor) hold not fewer than an aggregate of 2,000,000 shares
of Series C Preferred (as appropriately adjusted for all stock splits,
dividends, combinations, reclassifications and the like), each of the Purchasers
agrees to vote all of the shares of Common Stock, Series A Preferred, Series A1
Preferred, Series B Preferred, Series C Preferred, Series D Preferred or other
securities of the Corporation entitled to vote in the election of directors, to
elect to the Corporation's Board of Directors a slate of nominees that includes
at least one (1) person designated by funds managed or advised by Institutional
Venture Partners (or any successor).
(e) Each of the Purchasers agrees to vote all of the shares of Common
Stock, Series A Preferred, Series A1 Preferred, Series B Preferred, Series C
Preferred, Series D Preferred or other securities of the Corporation entitled to
vote in the election of directors, to elect to the Corporation's Board of
Directors a slate of nominees that includes the Chief Executive Officer of the
Corporation and one (1) person who is an industry expert appointed by a majority
of the other directors, who initially shall be Xxx Xxx.
(f) The Corporation shall maintain the size of the Compensation
Committee of the Board of Directors at three (3) persons, all of whom shall be
outside directors and one (1) of whom shall be designated by holders of a
majority of the Series D Preferred. The Compensation Committee shall make
decisions regarding compensation of senior management, which shall not exceed
what is reasonable and customary.
(g) The Corporation shall reimburse the reasonable expenses of Board
meeting attendance by the representatives of the Purchasers.
(h) In the event that any person designated to the Board of Directors
in accordance with this section resigns or otherwise ceases to be a director, a
replacement director shall
Page 20
be designated by the Purchasers in the manner set forth in this section and the
terms of this section shall apply to any such replacement director for so long
as it would otherwise apply to the initial director.
(i) Each of the Purchasers agrees to be present, in person or by
proxy, at all meetings of shareholders of the Corporation so that all shares of
voting securities held by such Purchaser may be voted for the election of the
directors as set forth in this section.
(j) So long as the provisions of this section are in effect, each
certificate evidencing shares of voting securities held by the Purchasers shall
bear a legend in substantially the following form:
"THESE SECURITIES ARE SUBJECT TO CERTAIN RESTRICTIONS ON VOTING AS SET
FORTH IN AN AMENDED AND RESTATED RIGHTS AGREEMENT BETWEEN THE
CORPORATION AND THE ORIGINAL HOLDER OF SUCH SHARES. A COPY OF SUCH
AGREEMENT IS ON FILE AT THE CORPORATION'S PRINCIPAL PLACE OF BUSINESS
AND ITS REGISTERED OFFICE."
(k) The provisions of this section shall terminate upon the closing
of the Corporation's initial public offering of Common Stock pursuant to a
registration statement declared effective by the Commission.
20. Holders' Rights of Refusal and Co-Sale
--------------------------------------
20.1 Definitions. For purposes of this Section 20 only, the following
-----------
definitions shall apply:
(a) "Common Stock Equivalents" shall mean the Corporation's
Common Stock then outstanding plus the shares of Common Stock then issuable upon
conversion of the outstanding shares of Preferred Stock.
(b) A "Permitted Transferee" shall mean a shareholder's spouse,
child or grandchild (whether natural or adopted), or any trust for the benefit
of the shareholder or any of the foregoing.
(c) "Transaction" shall mean any transfer of shares of Common
Stock or Preferred Stock, whether in one or more related transactions, which
require the giving of notice by a Holder in accordance with this Section 20.
20.2 Notice of Proposed Transfer. In the event that a Common Holder
---------------------------
(the "Selling Holder") proposes to make any sale or transfer of Common Stock to
a third-party (a "Transfer") otherwise permitted pursuant to this Agreement,
then prior to effecting such sale or transfer the Selling Holder shall deliver
to the Corporation and to each Holder a written notice (the "Transfer Notice")
stating (i) the Selling Holder's bona fide intention to sell or otherwise
transfer such Common Stock; (ii) the name of each proposed purchaser or other
transferee ("Proposed Transferee"); (iii) the number of shares of Common Stock
to be transferred to each Proposed Transferee (the aggregate number of such
shares for all Proposed Transferees, the "Offered
Page 21
Shares"); and (iv) the bona fide cash price or other consideration for which the
Selling Holder proposes to transfer the Common Stock (the "Offered Price").
20.3 Right of Offer.
--------------
(a) Following the decline by the Company (and any of its
assignees) of their rights of first offer, if applicable, the Holders shall have
an option for a period of thirty (30) days from the later of the Holder's
receipt of the Transfer Notice from the Selling Holder set forth in Section 20.2
or the Company's decline of its first offer right to purchase their or its pro
rata shares of the Offered Shares at the same price and subject to the same
material terms and conditions as described in the Transfer Notice. Each of such
persons may exercise such purchase option and, thereby, purchase all or any
portion of his or its pro rata shares (with any reallotments as provided below)
of the Offered Shares, by notifying the Selling Holder in writing, before
expiration of the initial thirty (30) day period as to the number of such shares
which he or it wishes to purchase. Each Holder's pro rata share of the Offered
Shares shall be a fraction of the Offered Shares, of which the number of shares
of Common Stock held by such Holder (assuming full exercise and conversion of
all convertible or exercisable securities) on the date of the Holder's receipt
of the Transfer Notice from the Selling Holder (the "Notice Date") shall be the
numerator and the total number of shares of Common Stock held by all Holders
(assuming full exercise and conversion of all convertible or exercisable
securities) on the Notice Date shall be the denominator. Each Holder shall have
a right of overallotment such that, if any other Holder fails to exercise the
right to purchase its full pro rata share of the Offered Shares, the other
participating Holders may, before the date ten (10) days following the
expiration of the initial thirty (30) day period, exercise an additional right
to purchase, on a pro rata basis, the Offered Shares not previously purchased
(which the Selling Holder shall notify the participating Holders of promptly
following the expiration of the thirty (30) day period set forth above) by so
notifying the Selling Holder and the Company, in writing, within such ten (10)
day period. Each Holder shall be entitled to apportion the Offered Shares to be
purchased among its partners and affiliates, provided that such Holder notifies
the Selling Holder of such allocation. If a Holder gives the Selling Holder
notice that it desires to purchase its share and, as the case may be, its
overallotment, then payment for the Offered Shares shall be by check or wire
transfer, against delivery of the Offered Shares to be purchased at a place
agreed upon between the parties and at the time of the scheduled closing
therefor.
(b) If the Holders fail to purchase all of the Offered Shares by
exercising the options granted in this Section 20.3 within the periods provided,
then, subject to the Holders' co-sale rights under Section 20.4, the Selling
Holder shall be entitled for a period of ninety (90) days thereafter to complete
the proposed Transfer of the balance of such shares not purchased by the Holders
upon the terms and conditions specified in the Transfer Notice. If the Selling
Holder has not so transferred the Offered Shares during such period, the Selling
Holders shall not thereafter make a Transfer of shares without again first
offering such shares to the other parties in the manner provided in this Section
20.3.
20.4 Co-Sale Right.
-------------
(a) A Holder shall have the right, exercisable upon written
notice to the Selling Holder within fifteen (15) days after receipt of the
Transfer Notice by the Holders, to the extent the Offered Shares are not
purchased by the Company or by the Holders pursuant to Section 20.3, to
participate in the Selling Holder's sale of Common Stock pursuant to the
specified terms and
Page 22
conditions of such Transaction. To the extent that one or more of the Holders
exercise such right of participation in accordance with the terms and conditions
set forth below, the number of shares of Common Stock that the Selling Holder
may sell in the Transaction shall be correspondingly reduced. The right of
participation of each of the Holders shall be subject to the following terms and
conditions:
(i) Each of the Holders may sell all or any part of that
number of shares of Common Stock Equivalents owned by such Holder equal to the
product obtained by multiplying (x) the aggregate number of shares of Common
Stock proposed to be sold in the Transaction by the Selling Holder by (y) a
fraction, the numerator of which is the number of shares of Common Stock
Equivalents owned by the Holder immediately prior to the Transaction, and the
denominator of which is the number of shares of Common Stock Equivalents owned
by all Holders who desire to participate in the Transaction, plus the number of
shares of Common Stock Equivalents held by the Selling Holder immediately prior
to the Transaction.
(ii) Each of the Holders shall effect its participation in
the sale by delivering to the Selling Holder for transfer to the Proposed
Transferee one or more certificates, properly endorsed for transfer, which
represent the number of shares of Common Stock Equivalents that the Holder
elects to sell pursuant to this Section 20.4.
(b) The certificates that the Holders deliver to the Selling
Holder pursuant to Section 20.3(a) shall be transferred by the Selling Holder to
the Proposed Transferee upon consummation of the sale in the Transaction
pursuant to the terms and conditions specified in the Transfer Notice, and the
Selling Holder shall promptly, and in any event no later than five (5) days
thereafter, remit to each Holder that portion of the sale proceeds to which the
Holder is entitled by reason of its participation in such sale.
(c) The exercise or non-exercise of the rights of the Holders
hereunder to participate in one or more Transactions shall not adversely affect
their rights to participate in subsequent Transactions. In the event that a
Transaction does not occur with respect to any shares of Conversion Stock, the
Selling Holder shall have no obligation to any Holder other than to return any
stock certificates delivered to the Selling Holder pursuant to Section
20.4(a)(ii) in anticipation of such Transaction.
20.5 Prohibited Transfer. Any attempt by a Selling Holder to transfer
-------------------
Common Stock in violation of Section 20.3 or 20.4 of this Agreement shall be
void and the Corporation agrees that it will not effect such a transfer nor will
it treat any alleged transferee as the holder of such shares without the written
consent of the Holders that hold at least 50% of the Common Stock Equivalents.
20.6 Future Stock Subject. All shares of capital stock of the
--------------------
Corporation acquired by the Common Holders in the future shall be subject to the
provisions of this Section 20.
20.7 Permitted Transactions. The restrictions set forth in this
----------------------
Section 20 shall not apply in the following cases:
AUNET Corporation
Rights Agreement
Page 23
(a) Each Common Holder may transfer shares of Common Stock to its
heirs by the estate of the deceased Common Holder; provided that in each case
such transferee agrees to be bound by this Agreement.
(b) Each Common Holder may transfer any shares to the Corporation
pursuant to (i) the exercise of any right of first refusal to such shares held
by the Corporation, (ii) the grant of (or exercise of rights to enforce) a
security interest in the shares granted to the Corporation or (iii) the exercise
of any right of repurchase to such shares held by the Corporation.
(c) Each Common Holder may transfer any shares to a Permitted
Transferee, provided that (i) such Common Holder shall bear its own expenses and
the expenses of the Company in connection with such transfer, (ii) such
Permitted Transferee agrees to be bound by this Agreement and (iii) such
transfer is effected solely for the purposes of such shareholder's tax or estate
planning.
(d) In the event that a Purchaser on behalf of whom Xxxxxxx
executed the Series B Preferred Stock Purchase Agreement or Series C Preferred
Stock and Warrant Purchase Agreement as attorney in fact determines in good
faith either not to continue as a client of Xxxxxxx or to dispose of all private
equity investments held by such Purchaser, such Purchaser may transfer any
shares to Xxxxxxx or another client of Xxxxxxx; provided that Xxxxxxx or such
other client of Xxxxxxx agrees to be bound by this Agreement with respect to
such shares.
20.8 Termination of Rights. The rights of refusal and co-sale granted
---------------------
under this Agreement shall expire immediately prior to the closing of an initial
public offering of the Common Stock of the Corporation to the general public
which is effected pursuant to a registration statement filed with, and declared
effective by, the Commission under the Securities Act.
20.9 Legends. All certificates representing any Common Stock held by a
-------
Common Holder shall have endorsed thereon the following legend, in additional to
any legends required by applicable state securities laws or otherwise:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AND
TRANSFERABLE ONLY UPON COMPLIANCE WITH THE TERMS AND CONDITIONS
OF THE REFUSAL AND CO-SALE PROVISIONS OF AN AMENDED AND RESTATED
RIGHTS AGREEMENT AMONG THE CORPORATION, THE HOLDER AND CERTAIN OTHER
SHAREHOLDERS OF THE CORPORATION, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF THIS CORPORATION AND MAY BE OBTAINED BY WRITTEN
REQUEST TO THE SECRETARY OF THE CORPORATION."
21. Miscellaneous
-------------
21.1 Governing Law. This Agreement shall be governed in all respects
-------------
by the internal laws of the State of California without reference to its
provisions regarding conflicts of law. The parties hereto expressly stipulate
that any litigation under this Agreement shall be brought in the state courts of
the County of San Mateo, California and in the United States District Court for
the
AUNET Corporation
Rights Agreement
Page 00
Xxxxxxxx Xxxxxxxx of California. The parties agree to submit to the jurisdiction
and venue of those courts.
21.2 Survival. The representations, warranties, covenants and
--------
agreements made herein shall survive any investigation made by any Purchaser and
the closing of the transactions contemplated hereby.
21.3 Successors and Assigns. Except as otherwise 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.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
21.4 Entire Agreement: Amendment. This Agreement and the other
---------------------------
documents delivered pursuant hereto constitute the full and entire understanding
and agreement between the Parties hereto with regard to the subjects hereof and
thereof, and superceded in its entirety the Amended Agreement, and no such party
shall be liable or bound to any other Party in any manner by any warranties,
representations or covenants except as specifically set forth herein or therein.
Except as expressly provided herein, neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated other than by a written
instrument signed by the Party against whom enforcement of any such amendment,
waiver, discharge or termination is sought; provided, however, that any
provision of this Agreement may be amended, waived or modified with the written
consent of the Corporation and the holders of at least a majority of the
outstanding Registrable Securities; provided, further, that any such amendment,
waiver or modification shall apply by its terms to all Purchasers; provided,
further, that any Purchaser or assignee hereunder may waive any of such
Purchaser's rights or the Corporation's obligations hereunder without obtaining
the consent of any other Purchaser or assignee; provided, further, that the
attached Schedules I, II, III and IV shall be automatically amended to add (i)
--------------------------
any person or entity who purchases Preferred Stock subsequent to the date hereof
and the shares purchased by such person or entity pursuant to this Series D
Purchase Agreement and (ii) the shares purchased by any person or entity in
connection with exercise of the Warrants.
21.5 Effect of Amendment or Waiver. Each Purchaser acknowledges that
-----------------------------
by the operation of Section 21.4 hereof the holders of a majority of the
outstanding shares of Registrable Securities will have the right and power to
diminish or eliminate all rights of the Purchasers under this Agreement.
21.6 Notices, etc. All notices and other communications required or
-------------
permitted hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given upon receipt or, if earlier, (a) five
(5) days after deposit with the U.S. Postal Service or other applicable postal
service, if delivered by first class mail, postage prepaid, (b) upon delivery,
if delivered by hand, (c) one business day after the business day of deposit
with Federal Express or similar overnight courier, freight prepaid or (d) one
business day after the business day of facsimile transmission, if delivered by
facsimile transmission with copy by first class mail, postage prepaid, and shall
be addressed (i) if to a Purchaser, such Purchaser's address as set forth
beneath his signature to this Agreement, and (ii) if to the Corporation, at the
address of its principal corporate
AUNET Corporation
Rights Agreement
Page 25
offices (attention: Secretary), or at such other address as a party may
designate by ten days' advance written notice to the other party pursuant to the
provisions above.
Each such notice or other communication shall for all purposes of this
Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or
seventy-two (72) hours after the same has been deposited in a regularly
maintained receptacle for the deposit of the United States mail, addressed and
mailed as aforesaid.
21.7 Delays or Omissions. Except as expressly provided herein, no
-------------------
delay or omission to exercise any right, power or remedy accruing to any holder
of any Preferred Stock, Conversion Stock, Warrants or Warrant Common, upon any
breach or default of the Corporation under this Agreement, shall impair any such
right, power or remedy of such holder nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any such holder of any breach or default
under this Agreement, or any waiver on the part of any such holder 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 or by law or otherwise afforded to any
such holder, shall be cumulative and not alternative.
21.8 Expenses. Except as otherwise provided in Section 9 or in the
--------
Series D Preferred Stock Purchase Agreement, the Corporation and each Purchaser
shall bear its own expenses incurred on its behalf with respect to this
Agreement and the transactions contemplated hereby.
21.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which may be executed by less than all of the Purchasers,
each of which shall be enforceable against the signers actually executing such
counterparts, and all of which together shall constitute one instrument.
21.10 Severability. In the event that any provision of this Agreement
------------
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective if
it materially changes the economic benefit of this Agreement to any party.
21.11 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.
AUNET Corporation
Rights Agreement
The foregoing agreement is hereby executed as of the date first above
written.
"CORPORATION"
AUNET CORPORATION
By:________________________________
Title:_____________________________
PURCHASERS"
XXXXXX CAPITAL PARTNERS II, L.P.
By:________________________________
Title:_____________________________
XXXXXX TECHNOLOGY VENTURES II, L.P.
By:________________________________
Title:_____________________________
INTERNATIONAL VENTURE CAPITAL
INVESTMENT CORPORATION
By:________________________________
Title:_____________________________
NEW ENTERPRISE ASSOCIATES VI
LIMITED PARTNERSHIP
By:________________________________
Title:_____________________________
W. T. TECHNOLOGIES
By:________________________________
Title:_____________________________
AUNET Corporation
Rights Agreement
W.T. TECHNOLOGY
By:________________________________
Title:_____________________________
ENTERPRISE PARTNERS (XXXX XXXXX LU)
___________________________________
WS INVESTMENT COMPANY 95B
By:________________________________
Title:_____________________________
XXXXXXX X. XXXXXXX
___________________________________
CHEN XXXX XXXXXX
___________________________________
XXXXX XXXXXX
___________________________________
NEA VENTURES 1995
By:________________________________
Title:_____________________________
AUNET Corporation
Rights Agreement
ENTERPRISE PARTNERS (HSING-XXXXX
XXX)
By:________________________________
Title:_____________________________
XXXXXX XXXXXXX
-----------------------------------
XXXX XXXXXXX
___________________________________
W.T. TECHNOLOGY II
By:________________________________
Title:_____________________________
ENTERPRISE PARTNERS (UUNET
TECHNOLOGIES INC.)
By:________________________________
Title:_____________________________
XXXXXXX CAPITAL GROUP LLC, as
attorney-in-fact
By: _____________________________________________
Title:___________________________________________
As attorney-in-fact for the following purchasers:
The Xxxxxxxx Xxxxxx Foundation
Asphalt Green, Inc.
Xxxx Xxxxxx Foundation
Xxxxxx Xxxxxxxx
Xxxxx X. Xxxxxx
Xxxxx Xxxxxx
Xxxxxx Capital, LLC
Xxxxxxx X. Xxxxx
NFIB Corporate Account
Public Employee Retirement System of Idaho
Roanoke College
State of Oregon PERS/ZCG
Xxxxx Xxxx Xxxxxxx
Xxxxxxx Investment Partners LP
GENERATION CAPITAL PARTNERS L.P.
By: Generation Partners L.P., its general partner
By: Generation Capital Corporation, its
general partner
_________________________________________________
Xxxx Xxxxxxx
SALOMON BROTHERS INC
By:______________________________________________
Title:___________________________________________
XXXXXX CAPITAL PARTNERS II, L.P.
By:______________________________________________
Title:___________________________________________
XXXXXX TECHNOLOGY VENTURES II, L.P.
By:__________________________________________
Title:_______________________________________
NEW ENTERPRISE ASSOCIATES VI
LIMITED PARTNERSHIP
By:__________________________________________
Title:_______________________________________
ABS EMPLOYEES' VENTURE FUND
LIMITED PARTNERSHIP
By:__________________________________________
Title:_______________________________________
Bayview Investors, Ltd.
By:__________________________________________
Title:_______________________________________
Xxxxx X. Xxxxxxxxx as Trustee, Under T/A/D
March 4, 1992
By:__________________________________________
Title:_______________________________________
Van Loben Sels Fdtn
By:__________________________________________
Title:_______________________________________
Orefund
By:__________________________________________
Title:_______________________________________
Xxxxxxx Family Trust
By:__________________________________________
Title:_______________________________________
Xxxxx, Xxxxxxxx X. and Xxxxxx
By:__________________________________________
Sen Xxx Xxx
By:__________________________________________
Xxxxxxxxx X. Xxxxx
By:__________________________________________
Xxxxx X. Xxxxx
By:__________________________________________
W.T. TECHNOLOGY II
By:__________________________________________
Title:_______________________________________
XXXXX XXX
__________________________________________________
XXXX XXXXX CAPITAL ADVISORY & TRUST CO.,
as attorney-in-fact
By:_______________________________________________
Title:____________________________________________
As attorney-in-fact for the following purchasers:
Xxxx Xxxxxx and Xxxx Xxx Xxxxxxxx Raiser
NEW ENTERPRISE ASSOCIATES VI LIMITED
PARTNERSHIP
By:_______________________________________________
Title:____________________________________________
BAYVIEW INVESTORS
By:_______________________________________________
Title:____________________________________________
XXXXX X. XXXXXXXXX AS TRUSTEE, UNDER T/A/D
MARCH 4, 1992
By:_______________________________________________
Title:____________________________________________
XXXXXX XXXXXX
__________________________________________________
Institutional Venture Partners VIII, L.P.
by its General Partner,
Institutional Venture Management VIII, LLC
_____________________________________________
Xxxxxxx Xxx
Managing Director
IVM Investment Fund VIII, LLC
by its Manager,
Institutional Venture Management VIII, LLC
_____________________________________________
Xxxxxxx Xxx
Managing Director
IVM Investment Fund VIII-A, LLC
by its Manager,
Institutional Venture Management VIII, LLC
_____________________________________________
Xxxxxxx Xxx
Managing Director
IVP Founders Fund I, L.P.
by its General Partner,
Institutional Venture Management VI, LLC
_____________________________________________
Xxxxxxx Xxx
Managing Director
XXXXXXX XXXXXXX
_____________________________________________
XXXX XXX
_____________________________________________
ENTERPRISE PARTNERS IV, L.P.
By:__________________________________________
Title:_______________________________________
ENTERPRISE PARTNERS ASSOCIATES IV, L.P.
By:___________________________________________
Title:________________________________________
XXXXXXX CAPITAL GROUP LLC, as
attorney-in-fact
By:____________________________________________
Title:_________________________________________
As attorney-in-fact for the following
purchasers: Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxx,
Xxxxxx Xxxxxx Xxxxxxx, Xxxxxxxx School General
Investment Fund, Xxxxxx Family LLC, City of
Milford Pension & Retirement Plan, City of
Stamford Firemen's Pension, Xxxxx X. Xxxxxxx,
Xxxxxx Capital, LLC, Xxxx Xxxxxx Foundation,
Xxxxxx & Xxxxx Xxxxxxx JTWROS, Xxxxx Xxxx,
Xxxxx Foundation, Xxxxxxx Investment Partners
LP, Xxxxxx Trust Co. of the Bahamas Ltd.,
Norwalk Employees' Pension Plan, XXXXX-Xxxxxxx
Capital, Psychology Associates, State of Oregon
PERS/ZCG, The Xxxxxx Investment Partnership I,
L.P., Trustees of Amherst College, Xxxxx Family
LLC, Xxxxxxxx Xxxxxxxx and Xxxxx Xxxxxx JTWROS,
Xxxxx Xxxxxx, Xxxx Xxxxxxx, The Xxxxxxxx Xxxxxx
Foundation, Xxxx Xxxxxx, Westcoast & Co. and
Roanoke College
GENERATION CAPITAL PARTNERS L.P.
By: Generation Partners L.P., its general partner
By: Generation Capital Corporation, its general
partner
_____________________________________________________
Xxxx Xxxxxxx
GENERATION CAPITAL PARTNERS L.P.
By: Generation Partners L.P., its general partner
By: Generation Capital Company LLC, as
General Partner
By:________________________________________
Xxxx Xxxxxxx
Managing Director
STATE BOARD OF ADMINISTRATION OF FLORIDA
By: Generation Parallel Management Partners L.P.,
as Manager
By: Generation Capital Company LLC, as
General Partner
By:________________________________________
Xxxx Xxxxxxx
Managing Director
GENERATION PARALLEL MANAGEMENT
PARTNERS, L.P.
By: Generation Capital Company,
LLC, as General Partner
By:_________________________
Xxxx Xxxxxx
Managing Director
GREENACRE VENTURES LLC
By:____________________________
Title:_________________________
XXXXX, XXXXXXXX X. AND XXXXXX
By:____________________________
Title:_________________________
XXXXXX XXXXXXX
By:____________________________
Title:_________________________
Xxxxxxx, Xxxxx X.
By:____________________________
Title:_________________________
NEWBRIDGE ASIA II, L.P.
________________________________
By: Newbridge Asia GenPar II,
L.P.
its: General Partner
By: Newbridge Asia Advisors, Inc.
Its: General Partner
By:_____________________________
Title:__________________________
DLJ CAPITAL CORP.
________________________________
By:_____________________________
Title:__________________________
DLJ ESC II, L.P.
________________________________
By: DLJ LBO Plans Management
Corporation
Its:General Partner
By:_____________________________
Title:__________________________
SPROUT CAPITAL VIII, L.P.
________________________________
By: DLJ Capital Corp.
Its: Managing General Partner
By:_____________________________
Title:__________________________
SPROUT VENTURE CAPITAL, L.P.
________________________________
By: DLJ Capital Corp.
Its: General Partner
By:_____________________________
Title:__________________________
SAMSUNG CORPORATION
_______________________________
By:____________________________
Title:_________________________
SAMSUNG AMERICA
_______________________________
By:____________________________
Title:_________________________
SAMSUNG HONG KONG LTD.
_______________________________
By:____________________________
Title:_________________________
KTB VENTURE CAPITAL
_______________________________
By:____________________________
Title:_________________________
XXXXXX XXXXXXX XXXX
XXXXXX EQUITY FUND
_______________________________
By:____________________________
Title:_________________________
XXXXXXX ENTERPRISES
HOLDINGS, INC.
_______________________________
By:____________________________
Title:_________________________
H&Q AUNET INVESTORS, LLC
_______________________________
By:____________________________
Title:_________________________
XXXXXXXXX & XXXXX CALIFORNIA
_______________________________
By:____________________________
Title:_________________________
H&Q EMPLOYEE VENTURE FUND
2000, L.P.
_______________________________
By:____________________________
Title:_________________________
_________________________
ACCESS TECHNOLOGY
PARTNERS, L.P.
_____________________________
By:__________________________
Title:_______________________
ACCESS TECHNOLOGY
PARTNERS BROKERS FUND, L.P.
_____________________________
By:__________________________
Title:_______________________
INTERNET ELITE LIMITED
_____________________________
By:__________________________
Xxxx Xxxxx
Title:_______________________
Director
PACIFIC RIM XXXXXX 4 LP
_____________________________
By:__________________________
Title:_______________________
_____________________________
Xxxxx Xxxxx
TARRANT VENTURE PARTNERS, L.P.
______________________________
Address:
By:___________________________
Title:________________________
Second Closing
_______________________________
Xxxxxx Xxxxxxx
_______________________________
Xxxxxxx, Phleger & Xxxxxxxx LLP
Common Holders
_______________________________
XxXxx Xxxxxxx Xxxxxx
_______________________________
Xxx Xxxxxx
SCHEDULE I
----------
Schedule of Original Purchasers
AUNET Corporation
Shareholder Common Series Series Series Series C Common Common Series
Stock A A1 B Preferred Stock Stock B
Bridge C Warrant
Financing Financing
Warrant Warrant
------------------------------------------------------------------------------------------------------------------------------------
ABS Employee's Ventrue Fund Limited 383,300 4,655
Partnership
An, Rou-Xxx 24,375
Xxxxxx & Co. / Xxxxx Family LLC 100,000 19,579 2,142 17,041
Aulis & Co. / Xxxx X. Xxxxxx (Xxxx. Xxxxx) 50,000
Aulis & Co. / Xxxx Xxx Xxxxxxxx Raiser 25,000
(Alex. Xxxxx)
Xxxxxx & Co. 9,789 8,520
Bayview Investors 1,642 1,429
Bayview Investors, Ltd. 13,300
Xxxxxxxx, Xxxxxxxx and Xxxxx JTWROS 3,400 000
Xxxxxx, Xxxxxx 50,000 43,519
Xxxxx, Xxx-Wen 3,833
Xxxxx, Xxx-Xxxx 10,417
Xxxx, Xxxx 25,000
Chiang, Xxxx Xxxx 89,140
Chiang, I Fan 15,625
Xxx, Xxx-Sheng 4,333
Xxx, Xxxxxx 2,500
Xxx, Xxxxxx 26,667
Xxxxx, Xxxxx X. 13,125
City of Milford Pension & Retirement Plan 100,000 19,579 2,142 17,041
City of Stamford Firemen's Pension Fund 125,000 24,473 2,678 21,301
Xxxxxx, Xxxxx 3,400 665 579
Xxxx & Co. / Xxxxx Xxxx (Xxxxxxx Group) 25,000 4,895 4,260
Xxxx & Co. / Xxxxxx Family LLC (Xxxxxxx Group) 75,000 14,684 1,607 12,781
Xxxx & Co. / Xxxx Xxxxxx Foundation (Xxxxxxx) 75,000 14,684 12,781
Xxxxx X. Xxxxxxxxx as Trustee, Under 53,300 6,579 5,726
X/X/X Xxxxx 0, 0000
XxXxxxx, Xxxxxxx X. 76,000
XxXxxxx, Xxxxxxx X. 9,380 8,164
Shareholder Common Series Series Series Series C Common Common Series
Stock A A1 B Preferred Stock Stock B
Bridge Warrant Warrant
Financing C
Warrant Financing
------------------------------------------------------------------------------------------------------------------------------------
Xxxxxx & Co./ Trustees of Amherst College 100,000 19,579 17,041
Xxxxxx & Co./ Xxxxxxxx School 5,874 5,113
General Investment
Enterprise Partners IV Associates, L.P. 233,013 240,000 80,800 256,153
Enterprise Partners IV L.P. 2,679,647 2,760,000 929,200 93,761
Xxxxxxx, Xxxx 3,400 665 000
Xxxxx, Xxxxxxx 43,000
Generation Capital Partners L.P. 1,753,367 308,017 268,089
Generation Parallel Management 110 96
Partners L.P.
Xxxxxxx, Xxxxx 10,000
Greenacre Ventures LLC 250,000 217,592
Xxxxxxx, Xxxxx X. 30,000 5,874 643 5,113
Hare & Co. / Xxxxx Foundation 25,000 4,895 4,260
(Xxxxxxx Group)
Hare & Co. / Norwalk Employee's Pension Plan 100,000 19,579 2,142 17,041
(Xxxxxxx Group)
Hare & Co. / Van Loben Sels 75,000
Foundation (Xxxxxxx)
Xxxxxxx, Xxxx 80,000 9,874 8,594
Xxxxx, Xxxxxxxx X. and Xxxxxx 6,650 821 715
Institutional Venture Partners 125,809
Institutional Venture Partners VIII, L.P. 3,756,151 4,315,577
International Venture Capital 122,264 1,200,000
Investment Corp.
IVM Investment Fund VIII, LLC 40,450 46,475
IVM Investment Fund VIII-A, LLC 17,336 19,918
IVP Founders Fund I, L.P. 38,525 2,896,263
Xxx, Xxxx 250,000 217,592
Xxxxxx, Xxxx 3,400 665 579
Xxx, Xxxxx 25,000
Xxx, Sen Xxx 16,650
Xxx, Xxxxxxx 195,000
Xxx, Xxx 15,000
Leu, Der Jang 11,250
Xxxxx, Xxxxxxx X.-Manager Xxxxxx Otologic 25,000 5,000
Group Inc PSP (BT Alex. Xxxxx) X X
Xxxxx XX Xxxxxxx 3 X X Xxxxx T
Xxxxxx, Xxx 44,583
Xxxxxxx, Xxxxxx 40,000 4,297 3,740
XxXxxxxx, Xxxxxxx Koumantzalis 20,833
XxXxxxx, Xxxx 10,000
Shareholder Common Series Series Series Series Common Common Series
Stock A A1 B C Stock Stock B
Bridge Warrant Warrant
Financing C
Warrant Financing
------------------------------------------------------------------------------------------------------------------------------------
Mellon Bank NA custodian for 501,000 98,088 10,733 85,373
XXXXX-Xxxxxxx Capital
Xxxxxx Trust Co. of the Bahamas Ltd. 75,000
Xxxxxx Trust Co. of the Bahamas 14,684 1,607 12,781
Ltd. As Trustees U/A/D 11/30/93
Xxxxxx, Xxxxx 40,000
Mu, Sheau-Fen 3,333
Xxxxxxx Family Trust 53,334
Xxxxxx Capital, LLC 25,000 4,895 4,260 5,000
Xxxxxx, Xxxx 2,148
NEA Ventures 1995 40,000
New Enterprise Associates VI Limited 180,000 4,400,000 333,333 767,382 667,907
Partnership
Orefund 700,000
Pan, Xxxxx 6,500
Xxxxxxxx Xxxxxxxx & Xxxxx Xxxxxx 665
Psychology Associates 10,000 1,958 1,704
Xxxxx, Xxxxxx 50,000
Roanoke College 50,000
Shih, Bine Jhy 1,896
Salomon Brothers Inc. 1,000,000
Xxxxx, Xxxxxxxxx X. 16,650
Xxxxx, Xxxxxxxx X. 16,650
State Board of Administration of Florida 10,856 9,449
The Xxxxxxxx School 30,000
The Xxxxxxxx Xxxxxx Foundation 50,000
The Xxxxxx Investment Partnership I, L.P. 50,000 9,789 8,520
Venture Lending & Leasing, Inc. 180,000
Venture Lending & Leasing II, Inc. 270,000
W.T. Technoligies 55,430
W.T. Tehcnology 2,215,430
W.T. Tehcnology II 120,000
Xxxxxx Capital Partners II, L.P. 206,602 1,750,000 277,767
Xxxxxx Technology Ventures II, L.P. 31,134 250,000 55,566
Westcoast & Co. 137,050 14,997 119,284
Xxxxxxx JTWROS, Xxxxxx & Xxxxx JTWROS 25,000 4,895 4,260
Winsal & Co. 9,789 8,520
Xxxxxxx Investment Partners LP 20,000 3,916 429 3,408
WS Investment Company 95B 144,000
Shareholder Common Series Series Series Series Common Common Series
Stock A A1 B C Stock Stock B
Bridge Warrant Warrant
Financing C
Warrant Financing
------------------------------------------------------------------------------------------------------------------------------------
Wu, Liang-Ying 6,333
Yeh, Xxxxx-Xxxxx 5,625
Xxx, Xxxx 12,500
Zacks, Xxxxxx X. 10,000 1,958 1,704
Xxxxxxx, Xxxxxx X. 215,000 42,092 4,606 36,636
Xxxxxxx, Xxxxxx Xxxxxx 75,000 14,684 12,781
Xxxxxxx Capital Group Pension Fund 16,600
------------------------------------------------------------------------------------------------------------------------------------
TOTAL 8,017,409 13,500,000 1,010,000 6,782,567 9,807,047 50,529 1,896,452 460,000
SCHEDULE II
-----------
Schedule of Series D Purchasers (First Closing)
AUNET Corporation
Series D
Purchasers Preferred
---------------------------------------------------------------------------------
NewBridge Asia II, L.P. 17,203,574
---------------------------------------------------------------------------------
DLJ Capital Corp. (Sprout Group) 28,509
---------------------------------------------------------------------------------
DLJ ESC II, L.P. (Sprout Group) 743,637
---------------------------------------------------------------------------------
Sprout Capital VIII, L.P. 8,545,725
---------------------------------------------------------------------------------
Sprout Venture Capital, L.P. 512,743
---------------------------------------------------------------------------------
Samsung America 245,765
---------------------------------------------------------------------------------
Samsung Corporation 491,531
---------------------------------------------------------------------------------
Samsung Hong Kong Ltd. 245,765
---------------------------------------------------------------------------------
Korea Technology Banking Corp. 491,531
---------------------------------------------------------------------------------
Xxxxxx Xxxxxxx Xxxx Xxxxxx Equity Funding 983,061
---------------------------------------------------------------------------------
Xxxxxxx Enterprises Holdings, Inc. 737,296
---------------------------------------------------------------------------------
H & Q AUNET Investors, LLC 61,933
---------------------------------------------------------------------------------
Xxxxxxxxx & Xxxxx California 36,865
---------------------------------------------------------------------------------
H&Q Employee Venture Fund 2000, L.P. 36,865
---------------------------------------------------------------------------------
Access Technology Partners, L.P. (Xxxxxxxxx & Xxxxx) 589,836
---------------------------------------------------------------------------------
Access Technology Partners Brokers Fund, L.P. (Xxxxxxxxx) 11,797
---------------------------------------------------------------------------------
Internet Elite Limited 1,474,592
---------------------------------------------------------------------------------
International Venture Capital Investment Corporation 122,883
---------------------------------------------------------------------------------
PACVEN Xxxxxx Ventures IV, Associates Fund L.P. 24,736
---------------------------------------------------------------------------------
PACVEN Xxxxxx Ventures IV, L.P. 1,326,973
---------------------------------------------------------------------------------
Enterprise Partners IV Associates, L.P. 87,642
---------------------------------------------------------------------------------
Enterprise Partners IV, L.P. 1,007,882
---------------------------------------------------------------------------------
Institutional Venture Partners VIII, L.P. 1,075,256
---------------------------------------------------------------------------------
Institutional Venture Management Investment Fund VIII, LLC 20,268
---------------------------------------------------------------------------------
ABS Employees Venture Fund Limited Partnership 101,996
---------------------------------------------------------------------------------
Generation Capital Partners L.P. 509,092
---------------------------------------------------------------------------------
Generation Parallel Management Partners L.P. 175
---------------------------------------------------------------------------------
State Board of Administration of Florida 17,354
---------------------------------------------------------------------------------
New Enterprise Associates (NEA) 1,211,295
---------------------------------------------------------------------------------
Xxxxxxx Xxxxx Xxxxxx Inc. 266,098
---------------------------------------------------------------------------------
Series D
Purchasers Preferred
---------------------------------------------------------------------------------
W.T. Technology 241,335
---------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Xxxxxxx Capital Group
------------------------------------------------------------------------------------------------------------
Purchaser Record Holder
------------------------------------------------------------------------------------------------------------
The Xxxxxxxx Xxxxxx Foundation Batrus & Co. 15,000
------------------------------------------------------------------------------------------------------------
Asphalt Green Inc, Xxxx & Co. 15,000
------------------------------------------------------------------------------------------------------------
Xxxx Xxxxxx Foundation Xxxx & Co. 25,000
------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxxx Aulis & Co. 70,000
------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxx Xxxxx X. Xxxxxx 4,000
------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx Xxxxx Xxxxxx 16,000
------------------------------------------------------------------------------------------------------------
Xxxxxx Capital, LLC Xxxxxx Capital, LLC 15,000
------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxx 65,000
------------------------------------------------------------------------------------------------------------
NFIB Corporate Account Houvis & Co. FBO NFIB 60,000
Corporate Account
------------------------------------------------------------------------------------------------------------
Public Employee Retirement System of Idaho Mellon Bank NA Custodian for 100,000
XXXXX-Xxxxxxx Capital
------------------------------------------------------------------------------------------------------------
Roanoke College FirstUnion & Co/Winsal & Co. 25,000
------------------------------------------------------------------------------------------------------------
State of Oregon PERS/ZCG Westcoast & Co. 350,000
------------------------------------------------------------------------------------------------------------
Xxxxx Xxxx Xxxxxxx Hare & Co. 40,000
------------------------------------------------------------------------------------------------------------
Xxxxxxx Investment Partners XX Xxxxxxx Investment Partners LP 20,111
------------------------------------------------------------------------------------------------------------
Sub Total 820,111
------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxx 4,430
------------------------------------------------------------------------------------------------------------
Conversion of Bridge Notes 990,093
------------------------------------------------------------------------------------------------------------
Total 40,268,644
------------------------------------------------------------------------------------------------------------
Second Closing
------------------------------------------------------------------------------------------------------------
Tarrant Venture Partners 1,474,592
------------------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP 24,576
------------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxx 12,288
------------------------------------------------------------------------------------------------------------
Total 1,511,456
------------------------------------------------------------------------------------------------------------
Grand Total 41,780,100
------------------------------------------------------------------------------------------------------------
SCHEDULE III
------------
Schedule of Common Holders
AUNET Corporation
Common
Name of Common Holder Equivalents
------------------------------------------------------- ---------------------
XxXxx Xxxxxxx-Xxxxxx 5,976,989
Xxx Xxxxxx 1,494,247
---------------------
Total 7,471,236
