Amended and Restated Investors' Rights Agreement
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AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
This Amended and Restated Investors' Rights Agreement (this "Agreement") is made
and entered into as of March 18, 1999 by and among ONLINE SPECIALTY RETAILING, a
Washington corporation (the "Company"), certain holders of the Company's Common
Stock (the "Common Holders"), the holders of the Company's Series A Preferred
Stock (the "Series A Holders") and the holders of the Company's Series B
Preferred Stock (the "Series B Holders" and collectively, with the Common
Holders and the Series A Holders, the "Holders") each as identified on attached
Exhibit A, as such may be amended from time to time in accordance with this
Agreement.
Recitals
A. The Company, the Common Holders and the Series A Holders are parties to that
certain Investors' Rights Agreement, dated as of July 17, 1998 (the "Original
Agreement").
B. The Series B Holders and the Company are parties to that certain Series B
Preferred Stock Purchase Agreement, dated as of March 18, 1999 (the "Stock
Purchase Agreement"), under which certain of the obligations of the Company and
the Series B Holders are conditioned upon amending and restating the Original
Agreement to include the Series B Holders as parties thereto in the manner set
forth in this Agreement.
C. The Original Agreement may be amended with the consent of the Company and the
holders of a majority of the Registrable Securities (as defined therein) and
holders of such majority have consented in writing to this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereto agree as follows:
1. REGISTRATION RIGHTS
1.1 Definitions. For purposes of this Agreement:
(a) The term "register," "registered," and "registration" refer 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
registration statement or document;
(b) The term "Registrable Securities" means (i) the Conversion
Shares (as defined below), (ii) any shares of Common Stock
currently held by the Common Holders (the "Common Holder
Shares"), and (iii) any 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 Preferred Shares, the Conversion Shares or
the Common Holder Shares, excluding in all cases, however, any
Registrable Securities (A) that are no longer beneficially
owned by a Holder or a permitted transferee of the rights of a
Holder pursuant to Section 1.11 of this Agreement, (B) that
have been effectively registered under the Securities Act and
disposed of pursuant thereto, or (C) for which registration
under the Securities Act is no longer required for subsequent
public distribution of such security;
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(c) The term "Preferred Shares" means the Company's Series A
Preferred Stock and Series B Preferred Stock;
(d) The term "Conversion Shares" means the Common Stock of the
Company issuable or issued upon conversion of the Preferred
Shares;
(e) The term "Holder" means any person owning or having the right
to acquire Registrable Securities who is a party to this
Agreement as of the date hereof or who may be added as a party
hereto pursuant to the terms of this Agreement, and any
assignee thereof in accordance with Section 1.11;
(f) The term "Form S-3" means such form under the Securities Act
as in effect on the date hereof or any registration form
(including any successor to Form S-3) under the Securities Act
subsequently adopted by the Securities and Exchange Commission
(the "SEC") which similarly permits inclusion or incorporation
of substantial information by reference to other documents
filed by the Company with the SEC; and
(g) The term "Exempt Registrations" means registrations relating
solely to employee benefit plans on Form S-8 or any similar
form that may be promulgated in the future, registrations
relating solely to a Commission Rule 145 transaction on Form
S-4 or similar forms that may be promulgated in the future or
registrations on any form that 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.
1.2 Company Registration. If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration effected
by the Company for shareholders other than the Holders) its Common Stock under
the Securities Act in connection with the public offering of such securities
solely for cash (other than Exempt Registrations), the Company shall, at each
such time, promptly give each Holder written notice of such registration. Upon
the written request of each Holder given within twenty (20) days after the
mailing of such notice by the Company, the Company shall, subject to the
provisions of Section 1.7, use its reasonable best efforts to cause to be
registered under the Securities Act all of the Registrable Securities that each
such Holder has requested to be registered. If a Holder decides not to include
all of its Registrable Securities in any registration statement filed by the
Company, such Holder shall nevertheless continue to have the right to include
any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth herein.
Notwithstanding the provisions of this Section 1.2, the Company shall have the
right at any time after it shall have given written notice pursuant to this
Section 1.2 (irrespective of whether any written request for inclusion of such
securities shall have already been made) to elect not to file any such proposed
registration statement, or to withdraw the same.
1.3 Form S-3 Registration. In case the Company shall receive from Holders
holding at least 25 percent of the Registrable Securities then outstanding ("S-3
Initiating 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 Registrable Securities, subject to the limitations set forth below,
the Company will:
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(a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders;
(b) as soon as practicable, file a registration statement covering
the Registrable Securities specified in this paragraph and use
its best efforts to effect the registration and all such
qualifications or compliances under the Securities Act of all
or such portion of such Holder's or Holders' Registrable
Securities as are specified in the S-3 Initiating Holders'
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
twenty (20) days after the Company's giving of written notice
to such Holders.
Notwithstanding the foregoing, the Company shall not be obligated to effect a
registration pursuant to this Section 1.3: (i) if the Company, within ten (10)
days of the receipt of the request of the S-3 Initiating Holders, gives notice
of its bona fide intention to effect the filing within ninety (90) days of
receipt of such request of a registration statement with respect to which the
Holders shall have registration rights pursuant to Section 1.2; (ii) if Form S-3
is not available for such offering by the Holders; (iii) if the S-3 Initiating
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
$250,000; (iv) if the Company shall furnish to the Holders a certificate stating
that, in the good faith judgment of the Board of Directors of the Company, it
would be seriously detrimental to the Company and its shareholders for such Form
S-3 registration to be effected at such time, in which event the Company shall
have the right during any 12 consecutive month period to defer the filing of the
Form S-3 registration statement for up to two periods of not more than sixty
(60) days each after receipt of the request of the Holder or Holders under this
Section 1.3; (v) if the Company has, within the twelve-month period preceding
the date of such request, already effected a registration of securities in which
the S-3 Initiating Holders participated to the fullest extent they desired
pursuant to Section 1.2 or this Section 1.3, or (vi) if the Company shall have
previously effected four (4) registrations requested by one or more Holders
under this Section 1.3. The expenses of registration shall be borne by the
Company (pursuant to Section 1.6).
1.4 Obligations of the Company. Whenever required under this Agreement to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its 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 90 days, provided,
however, that the Company may cease to keep such registration
statement effective if, in the good faith judgment of the
Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders to do so;
(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;
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(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 all securities covered by such registration
statement;
(d) Use its reasonable 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; and
(f) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating
thereto covered by such registration statement 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.
1.5 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement with
respect to any selling Holder that such selling 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 reasonably
required to effect the registration of its Registrable Securities and to execute
such documents in connection with such registration as the Company may
reasonably request.
1.6 Expenses of Registration. Except as provided otherwise, all reasonable
expenses other than underwriting discounts and commissions and fees and expenses
of counsel to the Holders incurred in connection with the underwriting,
registrations, filings or qualifications pursuant to Sections 1.2 and 1.3,
including, without limitation, all registration, filing and qualification fees,
printing and accounting fees, and the fees and disbursements of counsel for the
Company shall be borne by the Company; provided, however, that the expenses paid
by the Company in connection with exercise of rights to registration pursuant to
this Section 1 shall be limited to those usual and customary expenses associated
with a nonunderwritten offering. In all cases the selling Holders bear the
expenses of any underwriting discounts and expenses relating to Registrable
Securities and the fees and disbursements of counsel or other advisers engaged
by Holders in connection with a registration. If the Holders are required to pay
Registration Expenses, such expenses shall be borne by the Holders (other than
the Company) of securities (including Registrable Securities) requesting such
registration in proportion to the number of shares for which registration was
requested.
1.7 Underwriting Requirements.
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(a) If any registration proceeding pursuant to Section 1.3 is at
the election of the majority in interest of the S-3 Initiating
Holders, an underwritten offering, the right of any Holder to
include its Registrable Securities in the registration
pursuant to Section 1.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion
of such Holder's Registrable Securities in the underwriting to
the extent provided herein. All Holders proposing to
distribute their Registrable Securities through such
underwriting shall (together with the Company as provided in
Section 1.4(e)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected
for such underwriting by a majority in interest of the S-3
Initiating Holders. Notwithstanding any other provision of
Section 1.3, if the underwriter advises the Company in writing
that marketing factors require a limitation of the number of
shares to be underwritten, then the Company shall so advise
the Holders of Registrable Securities which otherwise would 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 S-3 Initiating Holders, in proportion (as nearly
as practicable) to the amount of Registrable Securities of the
Company owned by each Holder.
(b) The Company shall not be required under Section 1.2 to
include any of the Holders' securities in an underwritten
offering of the Company's securities unless such Holder
accepts the terms of the underwriting as agreed upon between
the Company and the underwriters selected by it, assuming
usual and customary underwriting terms. If the total amount
of securities, including (a) Registrable Securities
requested by shareholders to be included in such offering,
and (b) securities requested to be included in such offering
under that certain Registration Rights Agreement, dated May
17, 1999, between the Company and the persons listed on the
Schedule of Purchasers attached thereto (the "Series C
Registration Rights Agreement") exceeds the amount of
securities that the underwriters reasonably believe
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 reasonably believe are
compatible with the success of the offering. In such event
the securities so included will be apportioned (i) first to
the Company, (ii) then pro rata among the New Investors on
the basis of the number of shares owned by each such New
Investor, and (iii) third, pro rata among the other selling
shareholders according to the total amount of securities
otherwise entitled to be included therein owned by each
selling shareholder or in such other proportions as shall
mutually be agreed to by such selling shareholders. No such
reduction shall reduce the securities being offered by the
Company for its own account to be included in the
registration and underwriting.
1.8 Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
1.9 Indemnification. In the event any Registrable Securities are included
in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners, officers, agents,
employees and directors of each Holder, any underwriter (as
defined in the Securities Act) for such Holder and each
person, if any, who controls such Holder or underwriter within
the meaning of the Securities Act or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), against any
losses, claims, damages or liabilities (joint or several) to
which they may become subject under the
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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 (each
a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration
statement, including any preliminary prospectus or final
prospectus contained therein in light of the circumstances
under which they were made, 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 reimburse each such Holder, partner, officer, agent,
employee or director, underwriter or controlling person for
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 Section 1.9(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 in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for
use in connection with such registration by, or on behalf of,
any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder severally
and not jointly shall indemnify and hold harmless the Company,
each of its officers, directors, agents or employees, each
person, if any, who controls the Company within the meaning of
the Securities Act, any underwriter and any other Holder
selling securities in such registration statement or any of
its partners, agents, employees, directors or officers or any
person who controls such Holder, against any losses, claims,
damages or liabilities (joint or several) to which the Company
or any such director, partner, agent, employee, officer,
controlling person, or underwriter, or other such Holder or
director, officer, partner, agent, employee or controlling
person of such other Holder may become subject, under the
Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) 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, or on behalf
of, such Holder; and each such Holder will reimburse any legal
or other expenses reasonably incurred by the Company or such
other Holder or any such partner, agent, employee, director,
officer, controlling person, or underwriter, in connection
with investigating, preparing or defending any such loss,
claim, damage, liability or action; provided, however, that
the indemnity agreement contained in this Section 1.9(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 against whom
indemnity is sought, which consent shall not be unreasonably
withheld; and provided, further, that each
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selling Holder shall be liable, under this Section 1.9(b) for
only that amount of losses, claims, damages and liabilities as
does not exceed the proceeds to such selling Holder as a
result of such registration.
(c) Promptly after receipt by an indemnified party under this
Section 1.9 of notice of the commencement of any action
(including any governmental action), such indemnified party
shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 1.9, 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
notified, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the
indemnifying party, if, in the opinion of counsel for the
indemnifying party, 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 thirty (30)
days of the commencement of any such action shall relieve such
indemnifying party of any liability to the indemnified party
under this Section 1.9 to the extent materially prejudicial to
its ability to defend such action, 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 1.9.
(d) If the indemnification provided for in this Section 1.9 is
held by a court of competent jurisdiction to be unavailable to
an indemnified party with respect to any expenses, losses,
claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified
party thereunder, shall to the extent permitted by applicable
law contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or
liability, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and
of the indemnified party on the other in connection with the
Violation(s) that resulted in such expense, loss, claim,
damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party
and of the indemnified party shall be determined by a court of
law by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission;
provided, that in no event shall any contribution by a Holder
hereunder exceed the net proceeds from the offering received
by such Holder.
(e) The obligations of the Company and Holders under this Section
1.9 shall survive completion of any offering of Registrable
Securities in a registration statement. 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
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indemnified party of a release from all liability in respect
to such claim or litigation.
(f) 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.
1.10 Reports Under the Securities Act. With a view to making available to
the Holders the benefits of SEC 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 under the Securities Act 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 as to its compliance with the
reporting requirements of SEC Rule 144 (at any time after 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 as to its qualification 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.
1.11 Assignment of Registration Rights. The rights to cause the Company to
register Registrable Securities pursuant to this Agreement may be assigned by a
Holder to a transferee or assignee of such securities who shall, upon such
transfer or assignment, be deemed a "Holder" under this Agreement only upon the
Company's written consent to such assignment and provided that immediately
following such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act.
1.12 "Market Stand-Off" Agreement. The Holders hereby agree that they
shall not, to the extent requested by the Company as the representative of the
underwriter of Common Stock (or
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other securities) of the Company, sell or otherwise transfer or dispose of any
Registrable Securities for up to 180 days following the effective date of a
registration statement of the Company filed under the Securities Act. In order
to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Registrable Securities of the Holders (and the
shares or securities of every other person subject to the foregoing restriction)
until the end of such period. The obligations described in this Section 1.12
shall not apply to Exempt Registrations.
2. COVENANTS OF THE COMPANY
Until the Company completes a firm commitment underwritten public offering
pursuant to an effective registration statement under the Securities Act
covering the offer and sale of Common Stock for the account of the Company to
the public (an "IPO"), the Company will furnish to each of the Holders or any of
their permitted assignees, (a "Qualifying Holder"):
(a) As soon as available, but in any event no later than sixty
(60) days after the end of each of the first three fiscal
quarters, the unaudited balance sheet of the Company as at the
end of each such period and the related unaudited statement of
operations, stockholders' equity and cash flows of the Company
for such quarterly period and for the elapsed period in such
fiscal year, all in reasonable detail. All such financial
statements shall be subject to normal year end audit
adjustments;
(b) As soon as available, but in any event within ninety (90) days
after the end of each fiscal year of the Company, a copy of
the unaudited balance sheet of the Company as at the end of
such fiscal year and the related unaudited statements of
operations, stockholders' equity and cash flows of the Company
for such fiscal year, all in reasonable detail and stating in
comparative form the figures as at the end of and for the
previous fiscal year;
(c) Such other information and financial data concerning the
Company as a Qualifying Holder may reasonably request;
provided, however, that the Company shall not be obligated to
provide information that it deems in good faith to be
proprietary or confidential unless the Qualifying Holder
provides reasonable assurances in writing that it will
maintain the confidentiality of the information;
3. MISCELLANEOUS
3.1 Notices, Etc. Any notice given under this Agreement shall be in
writing and delivered in person, via facsimile machine, sent by documented
overnight delivery service, or mailed by certified or registered mail, postage
prepaid, to the appropriate party or parties at the addresses referenced below,
or to such other address as the parties may hereinafter designate. Unless
otherwise specified in this Agreement, all such notices and other written
communications shall be effective (and considered received for the purposes of
this Agreement) (a) if delivered in person, upon delivery, (b) if by facsimile
machine during normal business hours upon transmission with confirmation of
receipt by the receiving party's facsimile terminal and if not sent during
normal business hours, then on the next business day, (c) if sent by documented
overnight delivery service, on the date delivered, or (d) if mailed, three (3)
days after mailing. Notices shall be sent (i) if to a Holder, at such Holder's
address set forth in this Agreement, or at such other address as such Holder
shall have furnished to the Company in writing, or (ii) if to the Company, one
copy should be sent to its address set forth on the first page of this
Agreement, or at such other address as the
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Company shall have furnished to the Holders, and addressed to the attention of
Xxxxxxxx X. Xxxxxx, and one copy shall be sent to Xxxxxx Xxxxxx White &
XxXxxxxxx, 6100 Columbia Center, 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000,
Attn: Xxxxxx X. Xxxxx.
3.2 Governing Law and Venue. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of Washington
(without giving effect to any choice or conflict of law provision or rule,
whether of the State of Washington or any other jurisdiction, that would cause
the application of the laws of any jurisdiction other than the State of
Washington). The venue of any arbitration or action brought on or in connection
with this Agreement shall be in King County, Washington.
3.3 Consent to Jurisdiction. The parties hereto irrevocably submit to the
jurisdiction of any Washington state or federal court sitting in Seattle in any
action or proceeding arising out of or relating to this Agreement, and agree
that all claims in respect of such action or proceeding may be heard and
determined in such Washington state or federal court. Each party hereby waives,
to the fullest extent it may effectively do so, the defense of any inconvenient
forum to the maintenance of such action or proceeding. The parties agree that a
final judgment in any action or proceeding shall be conclusive and may be
enforced in any other manner provided by law.
3.4 Costs and Attorney's Fees. If any action at law or equity is necessary
to enforce or interpret the terms of this Agreement, the mostly prevailing party
shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled, including any such fees, costs and necessary disbursements incurred in
any appellate proceeding.
3.5 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;
provided, however, that, the rights of a Holder to assign its rights hereunder
shall be subject to the terms of Section 1.11 hereof.
3.6 Third Party Beneficiaries. This Agreement shall not confer any rights
or remedies upon any person or entity other than the parties and their
respective successors and permitted assigns.
3.7 Entire Agreement; Amendment. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof and supersedes all prior agreements, contracts or
understandings with respect to the subject matter hereof. This Agreement may be
amended or modified, and the obligations of the Company under Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only upon the written consent of the Company and holders of a
majority of the Registered Securities (treated as if converted); any such
amendment, modification or waiver shall be binding on the Company, all Holders
under this Agreement at the time and each future Holder to become a party
hereto. The foregoing notwithstanding, this Agreement and any term hereof may be
amended, waived, discharged or terminated by a written instrument signed by the
party against whom enforcement of any such amendment, waiver, discharge or
termination is sought.
3.8 Interpretation and Fair Construction. This Agreement has been reviewed
and approved by each of the parties. If it should be determined that any
provision of this Agreement is uncertain or ambiguous, the language in all parts
of this Agreement shall be in all cases construed as a whole according to its
fair meaning and not strictly construed for or against either the Company or the
Holders.
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3.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
3.10 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.
3.11 Additional Parties. In the event the Company sells additional shares
of Series B Preferred Stock in a "Subsequent Closing" pursuant to Section 2.2 of
the Stock Purchase Agreement, any purchasers of such shares may become parties
to this Agreement by execution of a signature page hereto and thereby shall be
deemed "Series B Holders" for all purposes of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.
THE COMPANY:
ONLINE SPECIALTY RETAILING, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------
Xxxxxxxx X. Xxxxxx, Chairman
COMMON HOLDER
/s/ Xxxxxxxx X. Xxxxxx
/s/ X. Xxxxxxxx Rush III
/s/ Xxxxxx X. Xxxxxx
SERIES A HOLDER:
/s/ Xxxxxx X. Xxxxxx
/s/ Xxxxxxx Xxxx
/s/ Xxxxxx X. Xxxxxx
/s/ Xxxxxxx Xxxxxx
/s/ Xxxx X.X. Xxxx
/s/ Xxxxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxx XX
/s/ Xxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxx Tenants in Common
/s/ Xxxxxxxx X. Xxxxxx
/s/ Xxxxx Xxxxxxxx
/s/ Xxxx Xxxxxxxx
/s/ X. Xxxxxxxx Rush
/s/ Xxxxx X. Xxxxxx Trust FBO X.X. Xxxx III
/s/ Xxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
/s/ XXXXX
SERIES B HOLDER:
/s/ Xxxxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxx Trust FBO Stockton Rush III
/s/ WYNOT
/s/ Xxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
/s/ X. Xxxxxxxx Rush
/s/ Xxxxxx X. Xxxxxx
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Amended and Restated Investors' Rights Agreement
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/s/ X.X. Xxxxxx, Partner, Xxxxxxx Xxxxxx & Ziker Investment Partnership (1999)
/s/ Xxxxxxx X. Xxxxxx XX
/s/ Xxxxxx Xxxxxx
/s/ Xxxx X. X. Xxxx
/s/ Xxxxx X. Xxxxxx
/s/ Xxx Xxxxxx
/s/ Xxxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
/s/ Xxxxxx K. Wales
/s/ Xxxx Xxxxxx
/s/ Fraser Black
/s/ Xxxxxxx Xxxxx
/s/ Xxxx X. Xxxxxxx Xxxxxxx Partners Profit Sharing Plan
/s/ Xxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxx Tenants in Common
/s/ Xxxxxxx X. Xxxxxxxxx, Trustee
/s/ Xxxx-Xxxxx Xxxxxxxx XX Xxxxxxxxx & Co., LLC
/s/ Xxxxxxxx X. Xxxxxx
/s/ Xxxxx Xxxxxxxx
/s/ Xxxx Xxxxxxxx
/s/ Xxxxxxx Xxxx
/s/ Xxxx Xxxx
/s/ Xxxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
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EXHIBIT A TO INVESTORS' RIGHTS AGREEMENT
COMMON HOLDERS
1. Fraser Black
2. X. Xxxx Green
3. Xxxxxxxx X. Xxxxxx
4. X. Xxxxxxxx Rush
5. X. Xxxxxxxx Rush III
6. Xxxxxx X. Xxxxxx
7. Xxxx Xxxxxx Xxxxxxxx, Inc. Custodian FBO Xxxx X. Xxxxxxx
8. Xxxxx Xxxxxx and Xxxxxxx Xxxxxx-Xxxxxxx
9. Xxxxx X. Xxxxx
SERIES A HOLDERS:
1. Xxx X. Xxxxxx
2. Xxxxxx X. Xxxxxx
3. Xxxxxx Black and Xxxxxxx Xxxxx, JT TEN
4. Xxxxxxx Xxxx
5. Xxxxxx X. Xxxxxx
6. Xxxxxx Xxxxxx White & XxXxxxxxx
7. Xxxxxxx and Xxxxx Xxxxxx
8. Xxxx X.X. Xxxx and Xxxxx Xxxxxxx Xxxx, Tenants in Common
9. Xxxxxx Xxxxxx and Xxxxxxx X. Xxxxxx XX, Tenants in Common
10. Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx, Tenants in Common
11. Xxxxxxxx X. Xxxxxx
12. Xxxxx Xxxxxxxx and Xxxx Xxxxxxxx
13. Xxxxxxxxx X. Xxxx
14. X. Xxxxxxxx Rush
15. Xxxxx X. Xxxxxx Trust FBO X.X. Xxxx III
16. Xxxx X. Xxxxxxx
17. Xxxxxx X. Xxxxxx
18. Xxxxxx Xxxxxxx Xxxx Custodian for Xxxx X. Xxxxxxx XXX SEP dated 4/14/89
19. Xxxxx Xxxxxxxxxxx
20. Xxxxxxx X. Xxxx
21. Xxxxx X. Xxxxx and Xxx XxXxxx Xxxxx (XXXXX Investments)
22. Xxxxx X. Xxxxx
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SERIES B HOLDERS:
1. Xxxxxxxx X. Xxxxxx
2. Xxxxx X. Xxxxxx Trust FBO
X. Xxxxxxxx Rush III
3. Xxxxx X. Xxxxx and Xxx XxXxxx
Xxxxx (XXXXX Investments)
4. Xxxxx Xxxxxx and Xxxxxxx Xxxxxx-Xxxxxxx
5. Xxxxxx X. Xxxxxx
6. X. Xxxxxxxx Rush
7. Xxxxxx X. Xxxxxx
8. X. X. Xxxxxxx Trust
9. Xxxxxxx Xxxxxx & Ziker Investment
Partnership (1999)
10. Xxxxxxx X. Xxxxxx and Xxxxxx Xxxxxx
11. Xxxx X. X. Xxxx
12. Xxxxx X. Xxxxxx
13. Les and Xxxxx Xxxxxx
14. Xxxxxx X. Xxxxx and Xxxxx X. Xxxxx
TTEES UTD dated 8/21/98
15. Xxxxxx K. Wales
16. Xxxx and Xxxxxxxxx Xxxxxx
17. Fraser Black and Xxxxxxx Xxxxx, Tenants in Common
18. Xxxxxxx Partners Profit Sharing Plan
19. Xxxx X. Xxxxx
20. Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx,
Tenants in Common
21. The Xxxxxxxxx 1980 Revocable Trust
22. XX Xxxxxxxxx & Co., LLC
23. Xxxxxxxx X. Xxxxxx
24. Xxxxx and Xxxx Xxxxxxxx
25. Xxxxxxx and Xxxxx Xxxxxx
26. Xxxx and Xxxxxxx Xxxx, XX
27. Xxxxxx X. Xxxxxx
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