Exhibit 4.2
XXXXX.XXX, INC.
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
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This Xxxxx.xxx, Inc. Second Amended and Restated Investors' Rights
Agreement (this "Agreement") is made as of the 20/th/ day of December 1999, by
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and among Xxxxx.xxx, Inc., a Washington corporation (the "Company"), the
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investors listed on Exhibit A hereto (each, an "Investor," and collectively, the
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"Investors") and the holders of the Company's common stock (the "Common Stock")
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listed on Exhibit B hereto (each, a "Common Holder," and together, the "Common
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Holders").
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RECITALS
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A. Certain of the Investors hold shares of the Company's Series A
Preferred Stock (the "Series A Preferred Stock"), the Company's Series B
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Preferred Stock (the "Series B Preferred Stock") and/or shares of the Company's
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Common Stock issued upon conversion thereof and possess registration rights,
information rights and other rights pursuant to that certain Xxxxx.xxx, Inc.,
Investors' Rights Agreement dated as of September 30, 1999 by and among the
Company and such certain Investors (the "Old Investors' Rights Agreement").
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B. The Company and certain of the Investors have entered into that certain
Xxxxx.xxx, Inc. Series C Preferred Stock Purchase Agreement (the "Series C
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Purchase Agreement") of even date herewith pursuant to which the Company desires
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to sell to such certain Investors, and such certain Investors desire to purchase
from the Company, shares of the Company's Series C Preferred Stock (the "Series
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C Preferred Stock").
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C. A condition to such certain Investors' obligations under the Purchase
Agreement is that the Company, the Common Holders and the Investors enter into
this Agreement in order to provide the Investors with, among other things, (1)
certain rights to register shares of the Company's Common Stock issuable upon
conversion of the Series A Preferred Stock, the Series B Preferred Stock and the
Series C Preferred Stock held by the Investors, (2) certain rights to receive or
inspect information pertaining to the Company and (3) a right of first offer
with respect to certain issuances by the Company of its securities, all
according to the terms and conditions, but subject to the limitations, set forth
in this Agreement.
D. The Company, the Investors and the Common Holders desire (1) to induce
certain Investors to purchase shares of Series C Preferred Stock pursuant to the
Purchase Agreement and (2) to terminate the Old Investors' Rights Agreement and
to accept the rights and obligations set forth in this Agreement, by agreeing to
the terms and conditions set forth below.
AGREEMENT
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In consideration of the foregoing recitals and the mutual promises set
forth in this Agreement, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Registration Rights. The Company, the Investors and the Common Holders
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hereby covenant and agree as follows:
1.1 Definitions. For purposes of this Section 1:
(a) The terms "register," "registered," and "registration" refer
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to a registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended (the
"Securities Act"), and the declaration or ordering of effectiveness of such
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registration statement or document;
(b) The term "Registrable Securities" means (i) the shares of
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Common Stock issuable or issued upon conversion of the Series A Preferred Stock,
the Series B Preferred Stock and the Series C Preferred Stock, (ii) the shares
of Common Stock issued to the Common Holders (the "Common Holders' Stock");
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provided, however, that for the purposes of Section 1.2, 1.4 or 1.13 the Common
Holders' Stock shall not be deemed Registrable Securities and the Common Holders
shall not be deemed Holders, (iii) any other shares of Common Stock of the
Company issued as (or issuable upon the conversion or exercise of any warrant,
right or other security which is issued as) a dividend or other distribution
with respect to, or in exchange for or in replacement of, the shares listed in
(i) and (ii) and (iv) the shares of Common Stock issued or issuable upon
conversion or exercise of securities purchased by Holders pursuant to any right
of first offer, right of first refusal or co-sale right set forth in the
Agreements; provided, however, that the foregoing definition shall exclude in
all cases any Registrable Securities sold by a person in a transaction in which
his or her rights under this Agreement are not assigned. Notwithstanding the
foregoing, Common Stock or other securities shall only be treated as Registrable
Securities if and so long as they have not been (A) sold to or through a broker
or dealer or underwriter in a public distribution or a public securities
transaction or (B) sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act under Section 4(1)
thereof so that all transfer restrictions, and restrictive legends with respect
thereto, if any, are removed upon the consummation of such sale;
(c) The number of shares of "Registrable Securities then
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outstanding" shall be determined by the number of shares of Common Stock
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outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities;
(d) The term "Holder" means any person owning or having the right
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to acquire Registrable Securities or any assignee thereof in accordance with
Section 1.12 of this Agreement;
(e) The term "Form S-3" means such form under the Securities Act
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as in effect on the date hereof or any successor form under the Securities Act;
(f) The term "SEC" means the Securities and Exchange Commission;
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and
(g) The term "Qualified IPO" means a firm commitment
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underwritten public offering by the Company of shares of its Common Stock
pursuant to a registration statement under the Securities Act, the public
offering price of which is not less than Twenty Dollars and Fifty-Seven Cents
($20.57) per share (appropriately adjusted for any stock split, dividend,
combination or other recapitalization) and which results in aggregate cash
proceeds to the Corporation of Thirty Million Dollars ($30,000,000) (net of
underwriting discounts and commissions).
1.2 Request for Registration.
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(a) If the Company shall receive at any time after the earlier
of (i) February 24, 2003, or (ii) six (6) months after the effective date of the
first registration statement for a public offering of securities of the Company
(other than a registration statement relating either to the sale of securities
to employees of the Company pursuant to a stock option, stock purchase or
similar plan or an SEC Rule 145 transaction), a written request from the Holders
of a majority of the Registrable Securities then outstanding that the Company
file a registration statement under the Securities Act covering the registration
of the Registrable Securities having an aggregate public offering price not less
than Ten Million Dollars ($10,000,000) (net of underwriting discounts and
commissions). Then the Company shall, within ten (10) days of the receipt
thereof, give written notice of such request to all Holders and shall, subject
to the limitations of subsection 1.2(b), use its commercially reasonable best
efforts to effect as soon as practicable, and in any event within sixty (60)
days of the receipt of such request, the registration under the Securities Act
of all Registrable Securities which the Holders request to be registered within
twenty (20) days of the mailing of such notice by the Company in accordance with
Section 3.3.
(b) If the Holders initiating the registration request hereunder
("Initiating Holders") intend to distribute the Registrable Securities covered
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by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to this Section 1.2 and the Company
shall include such information in the written notice referred to in subsection
1.2(a). The underwriter will be selected by a majority in interest of the
Initiating Holders and shall be reasonably acceptable to the Company. In such
event, the right of any Holder to include his Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in subsection 1.5(e)) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding any other provision of this
Section 1.2, if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder; provided, however,
that the number of shares of Registrable Securities to
be included in such underwriting shall not be reduced unless all other
securities are first entirely excluded from the underwriting.
(c) Notwithstanding the foregoing, if the Company shall furnish to
Holders requesting a registration statement pursuant to this Section 1.2, a
certificate signed by the President of the Company stating that in the good
faith judgment of the board of directors of the Company (the "Board of
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Directors") it would be seriously detrimental to the Company and its
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stockholders for such registration statement to be filed and it is therefore
essential to defer the filing of such registration statement, the Company shall
have the right to defer such filing for a period of not more than one hundred
twenty (120) days after receipt of the request of the Initiating Holders;
provided, however, that the Company may not utilize this right more than once in
any twelve-month period.
(d) In addition, the Company shall not be obligated to effect, or to
take any action to effect, any registration pursuant to this Section 1.2:
(i) After the Company has effected two (2) registrations
pursuant to this Section 1.2 and such registrations have been declared or
ordered effective;
(ii) During the period starting with the date sixty (60) days
prior to the Company's good faith estimate of the date of filing of, and ending
on a date one hundred eighty (180) days after the effective date of, a
registration subject to Section 1.3 hereof; provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; or
(iii) If the Initiating Holders propose to dispose of shares of
Registrable Securities that may be immediately registered on Form S-3 pursuant
to a request made pursuant to Section 1.4 below.
1.3 Company Registration. If (but without any obligation to do so)
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the Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holders) any of its
stock under the Securities Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock plan or a transaction
covered by Rule 145 under the Securities Act, a registration in which the only
stock being registered is Common Stock issuable upon conversion of debt
securities which are also being registered, or any registration on any form
which does not include substantially the same information as would be required
to be included in a registration statement covering the sale of the Registrable
Securities), the Company shall, at such time, promptly give each Holder written
notice of such registration. Upon the written request of each Holder given
within twenty (20) days after mailing of such notice by the Company in
accordance with Section 3.3, the Company shall, subject to the provisions of
Section 1.8, cause to be registered under the Securities Act all of the
Registrable Securities that each such Holder has requested to be registered.
1.4 Form S-3 Registration. In case the Company shall receive from
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any Holder or Holders a written request or requests that the Company effect a
registration on
Form S-3 and any related qualification or compliance with respect to all or a
part of the Registrable Securities owned by such Holder or Holders, the Company
will:
(a) promptly give written notice of the proposed registration, and any
related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 1.4: (i) if
Form S-3 is not available for such offering by the Holders, (ii) if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than Five Million Dollars
($5,000,000), (iii) if the Company shall furnish to the Holders a certificate
signed by the President of the Company stating that in the good faith judgment
of the Board of Directors, it would be seriously detrimental to the Company and
its stockholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than one hundred twenty (120)
days after receipt of the request of the Holder or Holders under this Section
1.4; provided, however, that the Company shall not utilize this right more than
once in any twelve month period, (iv) if the Company has, within the twelve (12)
month period preceding the date of such request, already effected a registration
on Form S-3 for the Holders pursuant to this Section 1.4, (v) in any particular
jurisdiction in which the Company would be required to qualify to do business or
to execute a general consent to service of process in effecting such
registration, qualification or compliance or (vi) during the period ending one
hundred eighty (180) days after the effective date of a registration statement
subject to Section 1.3.
(c) Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Holders. Registrations effected pursuant to this Section 1.4 shall not
be counted as demands for registration or registrations effected pursuant to
Sections 1.2.
1.5 Obligations of the Company. Whenever required under this
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Section 1 to effect the registration of any Registrable Securities, the Company
shall use commercially reasonable best efforts to:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its commercially reasonable best
efforts to cause such registration statement to become effective, and, upon the
request of the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for up
to one hundred twenty (120) days. The Company shall not be required to file,
cause to become effective or maintain the effectiveness of any registration
statement that contemplates a distribution of securities on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act.
(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 be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement for up to one hundred twenty (120) days.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(d) 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, however, 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 shall also 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 (i) 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, or (ii)
there is any stop order issued by the SEC suspending the effectiveness of such
registration statement or the initiation of any proceedings for that purpose and
the receipt by the Company of any notification with respect to the suspension of
the qualification of the Registrable Securities for sale in any jurisdiction or
the initiation or threatening of such procedure.
(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 hereunder and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such registration.
(i) Furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Section 1, on the date
that such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 1, 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.
1.6 Furnish Information. It shall be a condition precedent to the
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obligations of the Company to take any action pursuant to this Section 1 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities. The Company shall have no obligation with respect to any
registration requested pursuant to Section 1.2 or Section 1.4 of this Agreement
if, as a result of the application of the preceding sentence, the number of
shares or the anticipated aggregate offering price of the Registrable Securities
to be included in the registration does not equal or exceed the number of shares
or the anticipated aggregate offering price specified in subsection 1.2(a) or
subsection 1.4(b)(2), whichever is applicable.
1.7 Expenses of Registration.
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(a) Demand Registration. All expenses (other than underwriting
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discounts and commissions incurred in connection with registrations, filings or
qualifications pursuant to Section 1.2), including without limitation, all
registration, filing and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company, and the reasonable fees and
disbursements of one counsel for the selling Holders selected by them with the
approval of the Company, which approval shall not be unreasonably withheld,
shall be borne by the Company; provided, however, that the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 1.2 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered (in which case all participating Holders shall bear such expenses),
unless the Holders of a majority of the Registrable Securities agree to forfeit
their right to one demand registration pursuant to Section 1.2.
(b) Company Registration and Registration on Form S-3. All
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expenses other than underwriting discounts and commissions incurred in
connection with registrations, filings or qualifications of Registrable
Securities pursuant to Section 1.3 and Section 1.4 for each Holder (which right
may be assigned as provided in Section 1.12), including (without limitation) all
registration, filing, and qualification fees, printers' and accounting fees,
fees and disbursements of counsel for the Company and the reasonable fees and
disbursements of one counsel for the selling Holder or Holders selected by them
with the approval of the Company, which approval shall not be unreasonably
withheld, shall be borne by the Company.
1.8 Underwriting Requirements. In connection with any offering
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involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 1.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the selling stockholders according to
the total amount of securities entitled to be included therein owned by each
selling stockholder or in such other proportions as shall mutually be agreed to
by such selling stockholders) but in no event shall (i) any shares being sold by
a stockholder exercising a demand registration right similar to that granted in
Section 1.2 be excluded from such offering, (ii) the amount of securities of the
selling Holders included in the offering be reduced below thirty percent (30%)
of the total amount of securities included in such offering, unless such
offering is the initial public offering of the Company's securities, in which
case, except as provided in (i) the selling stockholders may be excluded if the
underwriters make the determination described above and no other stockholder's
securities are included or (iii) any securities held by a Common Holder be
included if any securities held by any selling Holder are excluded. For
purposes of the preceding parenthetical concerning apportionment, for any
selling stockholder which is a holder of Registrable Securities and which is a
partnership or corporation, the partners, retired partners and stockholders of
such holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single "selling stockholder," and any pro-rata reduction with
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respect to such "selling stockholder" shall be based upon the aggregate amount
of shares carrying registration rights owned by all entities and individuals
included in such "selling stockholder," as defined in this sentence.
1.9 Delay of Registration. No Holder shall have any right to
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obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
1.10 Indemnification. In the event any Registrable Securities are
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included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, any underwriter (as defined in the Securities
Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the
Securities Act or the Securities Exchange Act of 1934, as amended (the "Exchange
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Act"), against any losses, claims, damages, or liabilities (joint or several) to
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which they may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a material
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fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act or any
state securities law; and the Company will pay to each such Holder, underwriter
or controlling person, as incurred, any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this subsection 1.10(a) shall not apply to amounts paid
in settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable to any Holder,
underwriter or controlling person for any such loss, claim, damage, liability,
or action to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by any such Holder,
underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will,
severally and not jointly, indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Company within the meaning of the Securities
Act, any underwriter, any other Holder selling securities in such registration
statement and any controlling person of any such underwriter or other Holder,
against any losses, claims, damages, or liabilities (joint or several) to which
any of the foregoing persons may become subject, under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereto) arise out of or are
based upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written
information furnished by such Holder expressly for use in connection with such
registration; and each such Holder will pay, severally and not jointly, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this subsection 1.10(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection
1.10(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; and provided
further, however, that in no event shall any indemnity under this subsection
1.10(b) exceed the net proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section
1.10 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying
party under this Section 1.10, deliver to the indemnifying party a written
notice of the commencement thereof and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party (together with all other indemnified parties
which may be represented without conflict by one counsel) shall have the right
to retain one separate counsel, with the reasonable fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.10, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
1.10.
(d) If the indemnification provided for in this Section 1.10 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations; provided, however, that in no event shall any contribution by a
Holder under this Subsection 1.10(d) exceed the net proceeds from the offering
received by such Holder. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) 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.
(f) The obligations of the Company and Holders under this Section 1.10
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.11 Reports Under Securities Exchange Act of 1934. With a view to
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making available to the Holders the benefits of Rule 144 promulgated under the
Securities Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after the effective date of
the first registration statement filed by the Company for the offering of its
securities to the general public;
(b) take such action, including the voluntary registration of its
Common Stock under Section 12 of the Exchange Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities, such
action to be taken as soon as practicable after the end of the fiscal year in
which the first registration statement filed by the Company for the offering of
its securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(d) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of SEC Rule 144 (at any time
after ninety (90) days after the effective date of the first registration
statement filed by the Company), the Securities Act and the Exchange Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
1.12 Assignment of Registration Rights. The rights to cause the
---------------------------------
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of at least two hundred fifty thousand (250,000) shares of such
securities; provided, however, the Company is, within a reasonable time after
such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided further, however, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act. The foregoing notwithstanding, any
Investor may assign its rights and obligations pursuant to this Section 1 to an
affiliate or successor so long as such affiliate or successor agrees to be bound
by the terms of this Agreement. For the purposes of determining the number of
shares of Registrable Securities held by a transferee or assignee, the holdings
of transferees and assignees of a partnership who are partners or retired
partners of such partnership (including spouses and ancestors, lineal
descendants and siblings of such partners or spouses who acquire Registrable
Securities by gift, will or intestate succession) shall be aggregated together
and with the partnership; provided that all assignees and transferees who would
not qualify individually for assignment of registration rights shall have a
single attorney-in-fact for the purpose of exercising any rights, receiving
notices or taking any action under Section 1.
1.13 Limitations on Subsequent Registration Rights. From and after
---------------------------------------------
the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the outstanding Registrable Securities,
enter into any agreement with any holder
or prospective holder of any securities of the Company which would allow such
holder or prospective holder (a) to include such securities in any registration
filed under Section 1.2 hereof, unless under the terms of such agreement, such
holder or prospective holder may include such securities in any such
registration only to the extent that the inclusion of his securities will not
reduce the amount of the Registrable Securities of the Holders which is included
or (b) to make a demand registration which could result in such registration
statement being declared effective prior to the earlier of either of the dates
set forth in subsection 1.2(a) or within one hundred twenty (120) days of the
effective date of any registration effected pursuant to Section 1.2.
1.14 "Market Stand-Off" Agreement. Each Holder hereby agrees that, during
----------------------------
the period (up to, but not exceeding, one hundred eighty (180) days) specified
by the Company and an underwriter of Common Stock or other securities of the
Company, following the effective date of a registration statement of the Company
filed under the Securities Act, it shall not, to the extent requested by the
Company and such underwriter, directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of (other than to donees who
agree to be similarly bound) any securities of the Company held by it at any
time during such period except (i) Common Stock included in such registration,
(ii) securities acquired pursuant to such registration statement, or (iii)
securities acquired on the open market; provided, however, that:
(a) such agreement shall be applicable only the first such
registration statement of the Company which covers Common Stock (or other
securities) to be sold on its behalf to the public in an underwritten offering;
and
(b) all officers and directors of the Company, all one-percent
securityholders, and all other persons with registration rights (whether or not
pursuant to this Agreement) enter into similar agreements;
(c) such agreement shall be on customary terms.
In order to enforce the foregoing covenant, the Company may impose stop-
transfer instructions with respect to the Registrable Securities of each Holder
(and the shares or securities of every other person subject to the foregoing
restriction) until the end of such period, and each Holder agrees that, if so
requested, such Holder will execute an agreement in the form provided by the
underwriter containing terms which are essentially consistent with the
provisions of this Section 1.14.
Notwithstanding the foregoing, the obligations described in this Section
1.14 shall not apply to a registration relating solely to employee benefit plans
on Form S-1 or Form S-8 or similar forms which may be promulgated in the future,
or a registration relating solely to an SEC Rule 145 transaction on Form S-4 or
similar forms which may be promulgated in the future.
1.15 Termination of Registration Rights. No Holder shall be entitled
----------------------------------
to exercise any right provided for in this Section 1 after the earlier
of (i) five (5) years following the consummation of a Qualified IPO or (ii) such
time as Rule 144 or another similar exemption
under the Securities Act is available for the sale of all of such Holder's
shares during a three (3)-month period without registration.
2. Covenants of the Company.
------------------------
2.1 Delivery of Financial Statements. The Company shall deliver to
--------------------------------
each Holder of at least two hundred fifty thousand (250,000) shares of
Registrable Securities (other than a Holder reasonably deemed by the Company to
be a competitor of the Company):
(a) as soon as practicable, but in any event within ninety (90)
days after the end of each fiscal year of the Company, an income statement for
such fiscal year, a balance sheet of the Company and statement of stockholder's
equity as of the end of such year, and a statement of cash flows for such year,
such year-end financial reports to be in reasonable detail, prepared in
accordance with generally accepted accounting principles ("GAAP"), and audited
----
and certified by an independent public accounting firm of nationally recognized
standing selected by the Company;
(b) as soon as practicable, but in any event within thirty (30)
days after the end of each of the first three (3) quarters of each fiscal year
of the Company, an unaudited income statement, a statement of cash flows for
such fiscal quarter and an unaudited balance sheet as of the end of such fiscal
quarter;
(c) within thirty (30) days of the end of each month, an
unaudited income statement and a statement of cash flows and balance sheet for
and as of the end of such month, in reasonable detail;
(d) as soon as practicable, but in any event thirty (30) days
prior to the end of each fiscal year, a budget and business plan as approved by
the board of directors for the next fiscal year, prepared on a monthly basis,
and, as soon as prepared, any other budgets or revised budgets prepared by the
Company;
(e) as soon as practicable after the Closing of the transactions
contemplated in the Purchase Agreement and related Agreements, a written plan
setting forth the Company's proposed use of the proceeds to be obtained from its
sale of the Series C Preferred Stock; and
(f) with respect to the financial statements called for in
subsections (b) and (c) of this Section 2.1, an instrument executed by the Chief
Financial Officer or President of the Company and certifying that such
financials were prepared in accordance with GAAP consistently applied with prior
practice for earlier periods (with the exception of footnotes that may be
required by GAAP) and fairly present the financial condition of the Company and
its results of operation for the period specified, subject to year-end audit
adjustment, provided that the foregoing shall not restrict the right of the
Company to change its accounting principles consistent with GAAP, if the Board
of Directors determines that it is in the best interests of the Company to do
so.
2.2 Right of First Offer. Subject to the terms and conditions
--------------------
specified in this Section 2.2, the Company hereby grants to each Major Investor
(as hereinafter defined) a right of first offer with respect to future sales by
the Company of its Shares (as hereinafter defined). For purposes of this
Section 2.2, a "Major Investor" shall mean any person who holds at least two
--------------
hundred fifty thousand (250,000) shares of the Series A Preferred Stock, Series
B Preferred Stock or Series C Preferred Stock (or the Common Stock issued or
issuable upon conversion thereof) issued pursuant to the Purchase Agreement.
For purposes of this Section 2.2, Major Investor includes any general partners
and affiliates of a Major Investor. A Major Investor who chooses to exercise
the right of first offer may designate as purchasers under such right itself or
its partners or affiliates in such proportions as it deems appropriate.
Each time the Company proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock ("Shares"), the Company shall first make an offering of such Shares to
------
each Major Investor in accordance with the following provisions:
(a) The Company shall deliver a notice by certified mail
("Notice") to the Major Investors stating (i) its bona fide intention to offer
------
such Shares, (ii) the number of such Shares to be offered and (iii) the price
and terms, if any, upon which it proposes to offer such Shares.
(b) Within fifteen (15) calendar days after delivery of the
Notice, the Major Investor may elect to purchase or obtain, at the price and on
the terms specified in the Notice, up to that portion of such Shares which
equals the proportion that the number of shares of Common Stock issued and held,
or issuable upon conversion and exercise of all convertible or exercisable
securities then held, by such Major Investor bears to the total number of shares
of Common Stock then outstanding (assuming full conversion and exercise of all
convertible or exercisable securities). The Company shall promptly, in writing,
inform each Major Investor that purchases all the shares available to it (each,
a "Fully-Exercising Investor") of any other Major Investor's failure to do
-------------------------
likewise. During the ten (10)-day period commencing after receipt of such
information, each Fully-Exercising Investor shall be entitled to obtain that
portion of the Shares for which Major Investors were entitled to subscribe but
which were not subscribed for by the Major Investors that is equal to the
proportion that the number of shares of Common Stock issued and held, or
issuable upon conversion and exercise of all convertible or exercisable
securities then held, by such Fully-Exercising Investor bears to the total
number of shares of Common Stock then outstanding and held by the Fully-
Exercising Investors (assuming full conversion and exercise of all convertible
or exercisable securities).
(c) The Company may, during the 45-day period following the
expiration of the period provided in subsection 2.2(b) hereof, offer the
remaining unsubscribed portion of the Shares to any person or persons at a price
not less than, and upon terms no more favorable to the offeree than those
specified in the Notice. If the Company does not enter into an agreement for the
sale of the Shares within such period, or if such agreement is not consummated
within sixty (60) days of the execution thereof, the right provided hereunder
shall be deemed to be revived and such Shares shall not be offered unless first
reoffered to the Major Investors in accordance herewith.
(d) The right of first offer in this paragraph 2.2 shall not be
applicable (i) to the issuance or sale of Common Stock (or options therefor) to
employees, consultants and directors, pursuant to plans or agreements approved
by the Board of Directors for the primary purpose of soliciting or retaining
their services, (ii) to or after consummation of a Qualified IPO, (iii) to the
issuance of securities pursuant to the conversion or exercise of convertible or
exercisable securities, (iv) to the issuance of securities in connection with a
bona fide business acquisition of or by the Company, whether by merger,
consolidation, sale of assets, sale or exchange of stock or otherwise, (v) to
the issuance of securities to financial institutions, lessors or vendors in
connection with commercial credit arrangements, equipment financings, or similar
transactions, (vi) to the issuance or sale of the Series A Preferred Stock,
Series B Preferred Stock or Series C Preferred Stock or (vii) to the issuance of
securities that, with unanimous approval of the Board of Directors, are not
offered to any existing stockholder of the Company.
2.3 Board Observer Seat. For any meeting of the Board of Directors,
-------------------
the Company shall allow one representative of GE Capital Equity Investments,
Inc. ("GE") (the "Representative") designated from time to time by GE to attend
-- --------------
all meetings of the Board (and all committees thereof) in a non-voting observer
capacity; reimburse GE for the Representatives's out-of-pocket expenses in
connection with attending such meetings; provide to the Representative copies of
all notices, minutes, consents and other materials that the Company provides to
its directors in connection with meetings of the Board (or any committee
thereof, as the case may be) at the same time such is given to its directors;
and allow the Representative to participate in discussions of matters brought to
the Board. The rights in this Section 2.3 are personal to GE and its affiliates
and therefore may only be transferred or assigned with the prior consent of the
Company, which consent will not be unreasonably withheld.
2.4 Use of Proceeds. The Company will use the proceeds of its Series
---------------
C Preferred Stock financing for expansion of the Company sales efforts,
marketing efforts, general working capital purposes and retirement of debt.
2.5 Termination of Covenants.
------------------------
(a) The covenants set forth in Sections 2.1, 2.2, 2.3 and 2.4
shall terminate as to each Holder and be of no further force or effect (i) as of
the closing date of a Qualified IPO or (ii) when the Company shall sell, convey,
or otherwise dispose of or encumber all or substantially all of its property or
business or merge into or consolidate with any other corporation (other than a
wholly-owned subsidiary corporation) or effect any other transaction or series
of related transactions in which more than fifty percent (50%) of the voting
power of the Company is disposed of, provided that this subsection (ii) shall
not apply to a merger effected exclusively for the purpose of changing the
domicile of the Corporation.
(b) The covenants set forth in Sections 2.1, 2.2, 2.3 and 2.4
shall terminate as to each Holder and be of no further force or effect when the
Company first becomes subject to the periodic reporting requirements of Sections
13 or 15(d) of the Exchange Act, if this occurs earlier than the events
described in Section 2.5(a) above.
3. Miscellaneous.
-------------
3.1 Successors and Assigns. Except as otherwise provided in this
----------------------
Agreement, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective permitted successors and assigns of the
parties (including transferees of any of the Series A Preferred Stock, Series B
Preferred Stock, or Series C Preferred Stock or any Common Stock issued upon
conversion thereof). Any Investor may assign its rights and obligations under
this Agreement to any of its affiliates or successors so long as such affiliate
or successor agrees to be bound by the terms of this Agreement. 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.
3.2 Amendments and Waivers. Any term of this Agreement may be
----------------------
amended or waived only with the written consent of (a) the Company, (b) the
holders of a majority of the Company's Series A Preferred Stock then
outstanding, (c) the holders of a majority of the Company's Series B Preferred
Stock and (d) the holders of a majority of the Company's Series C Preferred
Stock, not including the Common Holders' Stock; provided, however, that if such
amendment has the effect of affecting the Common Holders' Stock (i) in a manner
different than securities issued to the Investors and (ii) in a manner adverse
to the interests of the holders of the Common Holders' Stock, then such
amendment shall require the consent of the holder or holders of a majority of
the Common Holders' Stock. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any Registrable Securities
then outstanding, each future holder of all such Registrable Securities, and the
Company.
3.3 Notices. Unless otherwise provided, any notice required or
-------
permitted by this Agreement shall be in writing and shall be deemed sufficient
upon delivery, when delivered personally or by overnight courier or sent by
telegram or fax, or one hundred twenty (120) hours after being deposited in the
U.S. mail, as certified or registered mail, with postage prepaid, and addressed
to the party to be notified at such party's address or fax number as set forth
on the signature page on Exhibit A hereto or as subsequently modified by written
---------
notice.
3.4 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
3.5 Governing Law. This Agreement and all acts and transactions
-------------
pursuant hereto shall be governed, construed and interpreted in accordance with
the laws of the State of Delaware, without giving effect to principles of
conflicts of laws.
3.6 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.7 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
3.8 Aggregation of Stock. All shares of the Preferred Stock held
--------------------
or acquired by affiliated entities or persons shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement.
3.9 Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES ITS
--------------------
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE AGREEMENTS, THE STOCK OR THE COMMON STOCK, OR THE SUBJECT MATTER
HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING
OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT
CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND
STATUTORY CLAIMS. THIS SECTION 3.9 HAS BEEN FULLY DISCUSSED BY EACH OF THE
PARTIES HERETO AND THESE PROVISIONS SHALL NOT BE SUBJECT TO ANY EXCEPTIONS.
EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
(WITHOUT A JURY) BY THE COURT.
3.10 Amendment and Restatement. Effective upon the closing of the
-------------------------
sale and issuance of the Series C Preferred Stock pursuant to the Purchase
Agreement, all provisions of, rights granted and covenants made in the Old
Investors' Rights Agreement are hereby waived, released and terminated in their
entirety and shall have no further force or effect whatsoever. The rights and
covenants contained in this agreement set forth the sole and entire agreement
among the Company, the investors, and the common holders on the subject matter
hereof and supersede any and all rights granted or covenants made under any
prior agreement with respect to the subject matter hereof including the Old
Investors' Rights Agreement. Notwithstanding the foregoing, this Amendment does
not supersede, and is subject to, any notice and waiver of notice of
registration rights executed by a party hereto before, on or after the date of
this Agreement.
3.11 Attorneys' Fees. If any action at law or in equity is necessary
---------------
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
[Signature Page Follows]
The parties have executed this Xxxxx.xxx, Inc. Second Amended and Restated
Investors' Rights Agreement as of the date first above written.
COMPANY:
XXXXX.XXX, INC.,
a Washington corporation
By: /s/ Xxxxx Xxxxxxx
----------------------------
Name: __________________________
(print)
Title:__________________________
Address: 0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
[COUNTERPART SIGNATURE PAGE TO XXXXX.XXX, INC.
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
INVESTORS:
XXXX, XXXXXXX VENTURES V, L.P.
By: Fifth MDV Partners, LLC
Its General Partner
By: /s/
---------------------------------
Member
XXXX, XXXXXXX VENTURES V, L.P. as nominee
for MDV Entrepreneurs' Network Fund II (A),
L.P. and MDV Entrepreneurs' Network Fund II
(B), L.P.
By: Fifth MDV Partners, LLC
Its General Partner
By: /s/
---------------------------------
Member
[COUNTERPART SIGNATURE PAGE TO XXXXX.XXX, INC.
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
INVESTORS:
INTERNET CAPITAL GROUP, INC.
By: /s/
-----------------------------------
Xxxxxxx X. Xxx, Managing Director
GE CAPITAL EQUITY
INVESTMENTS, INC.
By: /s/
-----------------------------------
Its: __________________________________
RIT VENTURES I LLC
By: /s/
-----------------------------------
Its: __________________________________
[COUNTERPART SIGNATURE PAGE TO XXXXX.XXX, INC.
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
SERIES A INVESTORS:
_______________________________________
(Print Name of Purchaser)
By: ___________________________________
Name: _________________________________
(Print Name)
Title: ________________________________
Address: ______________________________
______________________________
______________________________
[COUNTERPART SIGNATURE PAGE TO XXXXX.XXX, INC.
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
INVESTORS:
_______________________________________
(Print Name of Purchaser)
By: ___________________________________
Name: _________________________________
(Print Name)
Title: ________________________________
Address: ______________________________
______________________________
______________________________
Fax: ______________________________
[COUNTERPART SIGNATURE PAGE TO XXXXX.XXX, INC.
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
COMMON HOLDERS:
__________________________________________
(Print Name of Common Holder)
By: ______________________________________
Signature
Address: _________________________________
_________________________________
_________________________________
[COUNTERPART SIGNATURE PAGE TO XXXXX.XXX, INC.
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT]
EXHIBIT A
---------
INVESTORS
---------
Xxxx, Xxxxxxx Ventures V, L.P. Xxxxxx Xxxxx
0000 Xxxx Xxxx Xxxx 0000 X.X. 00/xx/ Xxxxxx
Xxxxx 000 Xxxxxxxx, XX 00000
Xxxxx Xxxx, XX 00000
Xxxx Xxxxx
Xxxx, Xxxxxxx Ventures V, L.P. 0000 000/xx/ Xxxxxx X.X.
as nominee for MDV Entrepreneurs' Xxxxxxxx, XX 00000
Network Fund II (A), L.P. and MDV
Entrepreneurs' Network Fund II (B), L.P. Xxxxx Xxxx
Warburg Dillon & Read
Stanford University 000 Xxxxxxxxxx Xxxx.
Attn: Xxxxx Xxxxxx Xxxxxxxx, XX 00000
Xxxxxxxx, XX 00000
Xxxxx Xxxxx
Internet Capital Group, Inc. c/o MSI Consulting Group
00 Xxxxxxxxxx Xxxxxx 0000 00xx Xxxxxx XX, Xxxxx 000
Xxxxx 0000 Xxxxxxx, XX 00000
Xxx Xxxxxxxxx, XX 00000
Xxxxxx Xxxxx
GE Capital Equity Investments, Inc. c/o Ovation Communications
000 Xxxx Xxxxx Xxxx Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000 Xxxxxxxxx Xxxx
Xxxxxxxxxx
Xxxxx & Xx. Xxxxxxxxx XX00XX
000 0/xx/ Xxxxxx Xxxxxx Xxxxxxx
Xxx Xxxx, XX 00000
Xxxxx Xxxxxx
Riverside Holdings II, L.P. 0000 Xxxxxxxxx Xxxxx Xxxx
Xxx Xxxxxxxx Xxxxxx, 0/xx/ Xxxxx Xxxxxxx, XX 00000
Xxxxxxxx, XX 00000
Xxx Xxxxxxx
Xxxx Xxxxxx x/x Xxxxx
Xxxxx 000 - 0000 Xxxxx Xxxxxx 520 Pike Street, Ste. 1800
Vancouver, B.C. Xxxxxxx, XX 00000
X0X 0X0
C&H Associates
Xxxxxx Xxxxxxxxxx Xxxxxxx X. Xxxx, Manager
P.O. Box 38088 P.O. Box 3946
Xxxx Xxxxxx Mall Bellevue, WA 98009
Xxxxxxxxx, XX
X0X 0X0 Xxxxxx Xxxxx
9623 S.E. 16/th/
Xxxx Xxxxxxx Xxxxxxxx, XX 00000
Suite 302 - 000 0/0 0xx Xxxxxx
Xxxxxxx, XX 00000 Xxxx Canin
0000 00/xx/ Xxxxxx X.X.
Xxxxx Xxxxxxxxxx Xxxxxxxx, XX 00000
00000 00/xx/ Xxxxxx, X.X.
Xxxx Xxxxx, XX 00000
Xxxxx X. Xxxxx Cascadia Capital
6309 N.E. 000/xx/ Xxxxx 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Xxxxxxx xxXxXxxxxxxxx Xxxxxxx X. Xxxxxxx
3206 Home Drive 0000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000 Xxxxxxxx, XX 00000
Xxxxxxx Xxxxxx Xxxxxxxxxxx X. Xxxxxx
15127 N.E. 24/th/, Suite 111 4750 Carillon Point
Redmond, WA 98052 Xxxxxxxx, XX 00000
Xxxxx Xxxxx Xxxxx Xxxxxxx
8819 N.E. 14/th/ 209 0/0 0/xx/ Xxxxxx, Xxx. 000
Xxxxx Xxxx, XX 00000 Xxxxxxx, XX 00000
Madrona Investment Group Internet Capital Group
x/x Xxx Xxxxxx 000 Xxxxx Xxxx Drive
0000 0/xx/ Xxxxxx, Xxx. 0000 000 Xxxxxxxxx Xxxx.
Xxxxxxx, XX 00000 Xxxxx, XX 00000
Oki Enterprises, LLC Xxx Xxxxxxx Funds
00000 Xxxx Xxxxxx 000 Xxxxxxxxxx Xxxxxx, Xxx. 0000
Xxxxxxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
Xxxx Xxxxxxx Amerindo Technology Growth Fund II
0000 Xxxxxxxxx Xxx, 0/xx/ Xx (c/o Amerindo Investments Advisors, Inc.)
Marina xxx Xxx, XX 00000 00 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxx X0X 0XX XX
Xxxxx Xxxxxxx
Park Xxxxx, X.X. Xxxxxx XxXxxxxx
x/x XXX Xxx Xxxxxxxxxxx, #0000
00 Xxxxxx Xxxxxx Xxx Xxxxxxxxx, XX 00000
Xxx Xxxxxxxxx, XX 00000
Aman Ventures
Xxxxxx Xxxxxx 00000 Xxxxxxxx Xxxx
x/x Xxxxxxxx.xxx Xxx Xxxxxxx, XX 00000
0000 Xxxxx X.
Xxxxxxx, XX 00000 Comdisco, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx Xxxxxx XX Xxxxxxxx, XX 00000
c/o X. Xxxxxxx Train Attn: Xxxx Xxxxxx
0000 Xxxxxxxxxxxx Xxx., Xxx. 000
Xxxxxxxxxx X.X. 00000 Credit Suisse First Boston
Venture Fund I, L.P.
Xxxxx Xxxxxx 0000 Xxxxxxx Xxxxxx
c/o Seattle Sonics Xxxx Xxxx, XX 00000
000 Xxxxx Xxxxxx, Xxxxx
Xxxxxxx, XX 00000 Xxxxxxx Xxxxx & Company
000 X. Xxxxx
XXXX 0000 Xxxxxxx, XX 00000
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX Vertex Capital II LLC
000 X. Xxxx Xxxxxx
Xxxxxxx, XX 00000
Access Technology Partners, L.P. Xxxxxxx Xxxxxx
One Xxxx Xxxxxx, 00/xx/ Xxxxx 0000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Bayview 99 I, L.P. Xxxxx Xxxxxxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxx. 0000 (c/o Amerindo Investments Advisors, Inc.)
Xxx Xxxxxxxxx, XX 00000 00 Xxxxx Xxxxxxxxx Xxxxxx
Attn: Xxxxxxxx Xxxxxxxx Xxxxxx X0X 0XX XX
Xxxxxxx 00 XX, X.X. X&X XxxxxxxxxXxxxxxx Xxxx 0000, L.P.
000 Xxxxxxxxxx Xxxxxx, Xxx. 0000 Xxx Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxxxxxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxx-Xxxxxxx
RIT Ventures, L.L.C.
1 Atomic Street, 0/xx/ Xxxxx Xxxxxxx X. Xxxxxxxx
Xxxxxxxx, XX 00000
Xxxxxx Xxxxx
Xxxxxxx X. Xxxxxxxxxxx 0000 Xxxxxxxx Xxxxx
000 X. Xxxx Xxxxxx Xxxxxxxx, XX 00000
Xxxxxxx, XX 00000
J. Makr and Xxxxx Xxxxxxx Access Technology Partners Brokers Fund,
00000-000/xx/ Xxxxxx XX X.X.
Xxxxxxxx, XX 00000 Xxx Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxxxxxxx, XX 00000
Xxxx X. Xxxxxxxx
0000 Xxxxxxxx Xxxxx Xxxx Xxxxxxx
Xxxxxxxx, XX 00000 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Xxxxxxxxx & Xxxxx California
Xxx Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxxxxxxx, XX 00000
Xxx Xxxxxxx Capital Partners
000 Xxxxxxxxxx Xxxxxx, Xxx. 0000
Xxx Xxxxxxxxx, XX 00000
EXHIBIT B
---------
COMMON HOLDERS
--------------
Xxxxx Xxxxxxx Xxx Xxxxxxxxxx
c/o Xxxxx.xxx, Inc. 0000 Xxxxxx Xxxxxx, Xxxxx 000
0000 Xxxxxx Xxxxxx, Xxxxx 000 Xxxxxxx, XX 00000
Xxxxxxx, XX 00000
Xxxxxx Xxx
Xxx Xxxx 0000 Xxxxx Xxxxxx
c/o Xxxxx.xxx, Inc. Xxxxx 000
0000 Xxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxx, XX X0X 0X0
Xxxxxxx, XX 00000
Xxxxx Xxxxxxxx
Xxxx Xxxxxxxxx 0000 Xxxxx Xxxxxx
c/o Xxxxx.xxx, Inc. Xxxxx 000
0000 Xxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxx, XX X0X 0X0
Xxxxxxx, XX 00000
Xxxx Xxxxxxxx
Xxxx Xxxx 0000 Xxxxx Xxxxxx
c/o Xxxxx.xxx, Inc. Xxxxx 000
0000 Xxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxx, XX X0X 0X0
Xxxxxxx, XX 00000
Bliss Xxxx
Xxxx Xxxxx 0000 Xxxxx Xxxxxx
c/o Xxxxx.xxx, Inc. Xxxxx 000
0000 Xxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxxx, XX X0X 0X0
Xxxxxxx, XX 00000
VLG Investments 1999
Xxxxxxx Xxxxxxxx 0000 Xxxx Xxxx Xxxx
c/o Xxxxx.xxx, Inc. Menlo Park, CA
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000 Xxxxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxx Xxxxxx Xxxxxxxx, XX 00000
c/o Xxxxx.xxx, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000 Xxxxx Xxxx
Xxxxxxx, XX 00000 0000 Xxxxx Xxxx, Xxxx 0
Xxxxxxx, XX 00000
Xxxx Xxxxx
000 0/0 0/xx/ Xxxxxx Xxxxx Xxxx
Xxxxx 000 0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Xxxx Xxxxxx Xxxxx Xxxxxxx
0000 Xxxxx Xxxxxx 0000 Xxxxx Xxxxxx
Xxxxx 000 Xxxxx 000
Xxxxxxxxx, XX X0X 0X0 Xxxxxxxxx, XX X0X 0X0
Xxxx Xxxxxx
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
TABLE OF CONTENTS
-----------------
Page
----
1. REGISTRATION RIGHTS.......................................... 2
1.1 Definitions.............................................. 2
1.2 Request for Registration................................. 3
1.3 Company Registration..................................... 4
1.4 Form S-3 Registration.................................... 5
1.5 Obligations of the Company............................... 5
1.6 Furnish Information...................................... 7
1.7 Expenses of Registration................................. 7
1.8 Underwriting Requirements................................ 8
1.9 Delay of Registration.................................... 8
1.10 Indemnification.......................................... 9
1.11 Reports Under Securities Exchange Act of 1934............ 11
1.12 Assignment of Registration Rights........................ 11
1.13 Limitations on Subsequent Registration Rights............ 12
1.14 Market Stand-Off Agreement............................... 12
1.15 Termination of Registration Rights....................... 13
2. COVENANTS OF THE COMPANY..................................... 13
2.1 Delivery of Financial Statements......................... 13
2.2 Right of First Offer..................................... 14
2.3 Board Observer Seat...................................... 15
2.4 Use of Proceeds.......................................... 15
2.5 Termination of Covenants................................. 15
3. MISCELLANEOUS................................................ 16
3.1 Successors and Assigns................................... 16
3.2 Amendments and Waivers................................... 16
3.3 Notices.................................................. 16
3.4 Severability............................................. 17
3.5 Governing Law............................................ 17
3.6 Counterparts............................................. 17
3.7 Titles and Subtitles..................................... 17
3.8 Aggregation of Stock..................................... 17
3.9 Waiver of Jury Trial..................................... 17
3.10 Amendment and Restatement................................ 18
3.11 Attorney's Fees.......................................... 18
i
XXXXX.XXX, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
December 20, 1999
XXXXX.XXX, INC.
---------------
AMENDMENT TO AMENDED AND RESTATED
---------------------------------
INVESTORS' RIGHTS AGREEMENT
---------------------------
This Amendment (the "Amendment") to the Amended and Restated Investors'
---------
Rights Agreement dated as of December 20, 1999 (the "Rights Agreement"), is made
----------------
as of February 4, 2000, by and among Xxxxx.xxx, Inc., a Washington corporation
(the "Company"), Internet Capital Group, Inc. ("ICG") and the undersigned
------- ----
holders of shares of Common Stock, Series A Preferred Stock, Series B Preferred
Stock and Series C Preferred Stock of the Company (each a "Holder" and together
------
the "Holders"). Capitalized terms not otherwise defined herein shall have the
-------
meaning assigned to them in the Rights Agreement.
WHEREAS, the Company has determined it to be in the best interest of the
Company to issue to ICG shares of its Common Stock pursuant to a Common Stock
Purchase Agreement dated as of February 4, 2000 (the "Purchase Agreement").
------------------
WHEREAS, pursuant to Section 3.2 of the Rights Agreement, the written
consent of the Company, the holders of a majority of the outstanding shares of
Series A Preferred Stock of the Company, the holders of a majority of the
outstanding shares of Series B Preferred Stock of the Company and the written
consent of a majority of the outstanding shares of Series C Preferred Stock of
the Company (collectively, the "Required Holders") is necessary to amend or
----------------
waive any provision of the Rights Agreement;
WHEREAS, the Company and the undersigned Holders, constituting the Required
Holders, desire to amend the Rights Agreement as set forth herein in order to
induce ICG to purchase shares of Common Stock of the Company pursuant to the
Purchase Agreement
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Section 1.1(b) of the Rights Agreement is amended to read in its
entirety as follows:
(b) The term "Registrable Securities" means (i) the shares of Common
----------------------
Stock issuable or issued upon conversion of the Series A Preferred Stock, the
Series B Preferred Stock and the Series C Preferred Stock, (ii) the shares of
Common Stock issued pursuant to the Common Stock Purchase Agreement dated as of
February 4, 2000 by and between the Company and Internet Capital Group, Inc.,
(iii) the shares of Common Stock issued to the Common Holders (the "Common
------
Holders' Stock"); provided, however, that for the purposes of Section 1.2, 1.4
--------------
or 1.13 the Common Holders' Stock shall not be deemed Registrable Securities and
the Common Holders shall not be deemed Holders, (iv) any other shares of Common
Stock of the Company issued as (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, the
shares listed in (i), (ii) and (iii) and (v) the shares of Common Stock issued
or issuable upon conversion or exercise of securities purchased by Holders
pursuant to any
right of first offer, right of first refusal or co-sale right set forth in the
Agreements; provided, however, that the foregoing definition shall exclude in
all cases any Registrable Securities sold by a person in a transaction in which
his or her rights under this Agreement are not assigned. Notwithstanding the
foregoing, Common Stock or other securities shall only be treated as Registrable
Securities if and so long as they have not been (A) sold to or through a broker
or dealer or underwriter in a public distribution or a public securities
transaction or (B) sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act under Section 4(1)
thereof so that all transfer restrictions, and restrictive legends with respect
thereto, if any, are removed upon the consummation of such sale;
2. Except as provided herein, the Rights Agreement shall remain in full
force and effect. If one or more provisions of this Amendment are held to be
unenforceable under applicable law, such provision shall be excluded from this
Amendment and the balance of this Amendment shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
3. Nothing in this Amendment, express or implied, is intended to confer
upon any party, other than the parties hereto, and their respective successors
and assigns, any rights, remedies, obligations or liabilities under or by reason
of this Amendment, except as expressly provided herein.
4. This Amendment shall be governed by and construed under the laws of
the State of Delaware, without regard to its principles of conflict of laws.
5. This Amendment may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
COMPANY:
XXXXX.XXX, INC.,
a Washington corporation
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------
Name: ____________________________________
(print)
Title: ___________________________________
Address: 0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
HOLDERS:
__________________________________________
Xxxxx Xxxxxxx
__________________________________________
Xxx Xxxx
__________________________________________
Xxxxxxx Xxxxxxxx
SIGNATURE PAGE TO AMENDMENT TO
AMENDED AND RESTATED INVESTORS' RIGHT AGREEMENT
XXXX, XXXXXXX VENTURES V, L.P.
By:Fifth MDV Partners, LLC
Its General Partner
By: /s/
----------------------------------------
Member
XXXX, XXXXXXX VENTURES V, L.P. as nominee
for MDV Entrepreneurs' Network Fund II (A),
L.P. and MDV Entrepreneurs' Network Fund II
(B), L.P.
By:Fifth MDV Partners, LLC
Its General Partner
By: /s/
----------------------------------------
Member
XXXX, XXXXXXX VENTURES X-X, L.P.
By:Fifth MDV Partners, LLC
Its General Partner
By: /s/
----------------------------------------
Member
SIGNATURE PAGE TO AMENDMENT TO
AMENDED AND RESTATED INVESTORS' RIGHT AGREEMENT
INTERNET CAPITAL GROUP, INC.
By: /s/
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
GE CAPITAL EQUITY INVESTMENTS, INC.
By: /s/
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
XXX XXXXXXX FUNDS
By: /s/
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
XXX XXXXXXX CAPITAL PARTNERS
By: /s/
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
SIGNATURE PAGE TO AMENDMENT TO
AMENDED AND RESTATED INVESTORS' RIGHT AGREEMENT
