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EXHIBIT 4.2
WEBVAN GROUP, INC.
FOURTH AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT
This Fourth Amendment (the "AMENDMENT") to Registration Rights Agreement
is made as of July __, 1999 by and among Webvan Group, Inc., a California
corporation (the "COMPANY"), the Shareholders (as defined below) and the New
Investors listed on Exhibit A hereto (the "NEW INVESTORS").
RECITALS
A. The Company, the holders of the Company's Series A Preferred Stock,
the holders of the Company's Series B Preferred Stock and the holders of the
Company's Series C Preferred Stock (the "SHAREHOLDERS") are parties to that
certain Registration Rights Agreement dated as of October 29, 1997, as amended
as of May 28, 1998, September 30, 1998 and January 21, 1999 (the "RIGHTS
AGREEMENT").
B. The Company proposes to sell up to 14,447,070 shares of its Series
D-2 Preferred Stock to the New Investors pursuant to that certain Series D
Preferred Stock Purchase Agreement dated the date hereof (the "SERIES D PURCHASE
AGREEMENT") which shares are convertible under certain circumstances into shares
of the Company's Series D-1 Preferred Stock (the Series D-1 Preferred Stock and
the Series D-2 Preferred Stock are collectively referred to herein as the
"SERIES D SHARES").
C. On July 9, 1999, the Company issued to Xxxxxxx Corporation a warrant
to purchase up to 600,000 shares of the Company's Series C Preferred Stock (the
"WARRANT SHARES").
D. The Company and the Shareholders desire that the Company sell the
shares of Series D-2 Preferred Stock to the New Investors and that the Rights
Agreement be amended as set forth herein to provide certain rights to the
holders of the Series D Shares and the Warrant Shares.
E. Pursuant to Section 12 of the Rights Agreement, the Company may not
grant further registration rights without the written consent of the Holders of
a majority of the then outstanding Registrable Securities (as defined therein),
subject to certain limited exceptions.
F. The Shareholders desire to waive their Right of First Refusal to
purchase any Series D Shares pursuant to Section 17 of the Rights Agreement.
G. Pursuant to Section 23 thereof, the Rights Agreement may be amended
and all Rights of First Refusal waived upon the written consent of the Company
and the holders of at least seventy percent (70%) of the Registrable Securities
(as defined therein) then held by persons entitled to registration rights
thereunder.
H. The Company and Shareholders holding not less than the minimum number
of shares required to amend the Rights Agreement hereby consent in writing to
this Amendment.
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AGREEMENT
1. Amendment of Rights Agreement. The Rights Agreement is hereby amended
as follows:
(a) For all purposes of the Rights Agreement (as amended by this
Amendment), the term "Shares" shall include the Series D Shares and the Warrant
Shares.
(b) For all purposes of the Rights Agreement (as amended by this
Amendment), the term "Shareholders" shall include the New Investors.
(c) The definitions of Initiating Holder and Registrable
Securities in Section 1 of the Rights Agreement are amended to provide as
follows:
"INITIATING HOLDERS" shall mean any Holders who in the
aggregate are Holders of fifteen percent (15%) or more of the outstanding
Registrable Securities.
"REGISTRABLE SECURITIES" shall mean shares of Common
Stock (i) issued or issuable pursuant to the conversion of the Shares, and (ii)
issued in respect of the Shares or the securities issued pursuant to the
conversion of the Shares upon any stock split, stock dividend, recapitalization,
substitution, or similar event; provided, however, that Registrable Securities
shall not include any (a) shares of Common Stock which have previously been
registered, (b) shares of Common Stock which have previously been sold to the
public, or (c) securities which would otherwise be Registrable Securities held
by a Holder who is then permitted to sell all of such securities within any
three (3) month period following the Company's initial public offering pursuant
to Rule 144 if such securities then held by such Holder constitute less than one
percent of the Company's outstanding equity securities.
(d) Section 4 of the Rights Agreement is hereby amended to
provide as follows:
The holder of each certificate representing Restricted Securities by acceptance
thereof agrees to comply in all respects with the provisions of this Section 4.
Prior to any proposed transfer of any Restricted Securities (other than under
circumstances described in Sections 5, 6 and 8 hereof), the holder thereof shall
give written notice to the Company of such holder's intention to effect such
transfer. Each such notice shall describe the manner and circumstances of the
proposed transfer in sufficient detail, and shall be accompanied (except (i) for
a transfer to a holder's spouse, ancestors, descendants or a trust for any of
their benefit, or (ii) in transactions involving the distribution without
consideration of Restricted Securities by a holder to any of its partners or
retired partners or to the estate of any of its partners or retired partners or
(iii) to any other affiliate of the holder) by either (i) a written opinion of
legal counsel to the holder who shall be reasonably satisfactory to the Company,
addressed to the Company and reasonably satisfactory in form and substance to
the Company's counsel, to the effect that the proposed transfer of the
Restricted Securities may be effected without registration under the Securities
Act or (ii) a "no-action" letter from the Commission to the effect that the
distribution of such securities without registration will not result in a
recommendation by the staff of the Commission that action be taken with respect
thereto, whereupon the holder of such Restricted Securities shall be entitled to
transfer such Restricted
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Securities in accordance with the terms of the notice delivered by such holder
to the Company. Each certificate evidencing the Restricted Securities
transferred as above provided shall bear the restrictive legend set forth in
Section 3 above, except that such certificate shall not bear such restrictive
legend after the date of the Company's initial public offering under the
Securities Act if the opinion of counsel or "no-action" letter referred to above
expressly indicates that such legend is not required in order to establish
compliance with the Act or if such legend is no longer required pursuant to Rule
144(k).
(e) Section 5(a)(ii)(B) of the Rights Agreement is amended to
provide as follows:
After the Company has effected three (3) such registrations
pursua/nt to this Section 5(a) and such registrations have been declared or
ordered effective and the sales of such Registrable Securities have closed; or
(f) Section 5(a)(ii)(C) of the Rights Agreement is amended to
change the reference therein to "$10,000,000" to "$100,000,000."
(g) The second paragraph of Section 5(b) of the Rights Agreement
is amended to provide as follows:
If officers or directors of the Company shall request
inclusion of securities of the Company other than Registrable Securities in any
registration pursuant to Section 5, or if holders of securities of the Company
who are entitled by contract with the Company to have securities included in
such a registration (such officers, directors, and other shareholders being
collectively referred to as the "Other Shareholders") request such inclusion,
the Initiating Holders shall, on behalf of all Holders, offer to include the
securities of such Other Shareholders in the underwriting and may condition such
offer on their acceptance of the further applicable provisions of this
Agreement. The Company shall (together with all Holders and Other Shareholders
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the representative of the
underwriter or underwriters (the "Underwriter") selected for such underwriting
by the Company and reasonably acceptable to the Initiating Holders.
Notwithstanding any other provision of this Section 5, if the Underwriter
determines that marketing factors require a limitation on the number of shares
to be underwritten, the Underwriter may (subject to the allocation priority set
forth below) limit the number of Registrable Securities to be included in the
registration and underwriting. The Company shall so advise all holders of
securities requesting registration, and the number of shares of securities that
are entitled to be included in the registration and underwriting shall be
allocated in the following priority: first, among all Holders of Registrable
Securities (and pro rata among such holders on the basis of all Registrable
Securities then held by such holders) and second, among all Other Shareholders
in proportion, as nearly as practicable, to the amounts of securities which they
had requested to be included in such registration at the time of filing the
registration statement. If any Holder or Other Shareholder disapproves of the
terms of any such underwriting, such holder may elect to withdraw therefrom by
written notice to the Company and the Underwriter. Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration. If the Underwriter has not limited the number of Registrable
Securities or other securities to be underwritten, the Company may include its
securities for its own account in such registration if the underwriter so agrees
and if the number of Registrable Securities
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and other securities which would otherwise have been included in such
registration and underwriting will not thereby be limited.
(h) Section 8(iv) of the Rights Agreement is amended to change
the reference therein to "Section 6(b)" to "Section 5(b)."
(i) Section 9 of the Rights Agreement is amended to add the
following subsections (d) through (g):
(d) Use its reasonable efforts to cause the shares being
registered pursuant to such registration to be listed on each securities
exchange on which similar securities issued by the Company are then listed.
(e) Use its reasonable efforts to register or qualify
any shares being registered pursuant to such registration under the state
securities or blue sky laws of any such jurisdiction as any Holder may
reasonably request, provided that the Company shall not be required to qualify
generally to do business in any jurisdiction where it would (i) not otherwise be
required to qualify but for its obligations under this section (e), (ii) subject
itself to taxation or (iii) be required to file a consent to general service of
process.
(f) Make appropriate members of its management available
to participate in any "road show" presentations undertaken by the underwriters
in connection with such registration.
(g) Use its reasonable efforts to cause the Company's
independent public accountants to issue a "comfort letter" in such form as is
customarily provided with respect to such registration.
(h) Use its reasonable efforts to cause the Company's
legal counsel to issue an opinion in such form as is customarily provided with
respect to such registration.
(j) Section 10(a) of the Rights Agreement is amended to provide
as follows:
The Company will indemnify and hold harmless each Holder, each
of its officers, directors, managing directors, agents and partners, and each
person controlling or managing such Holder or any such partner, if Registrable
Securities held by such Holder are included in the securities with respect to
which registration, qualification or compliance has been effected pursuant to
this Agreement, and each underwriter, if any, and each person who controls any
underwriter, against all claims, losses, damages and liabilities (or actions in
respect thereof), whether joint or several, arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
or any violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any applicable state securities law or any rule or regulation
thereunder relating to action or
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inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each such Holder, each of its
officers, directors, managing directors, agents and partners, and each person
controlling or managing such Holder or any such partner, each such underwriter
and each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating and defending any
such claim, loss, damage, liability or action, as such expenses are incurred
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement (or alleged untrue statement) or omission (or alleged
omission) based upon information furnished in writing to the Company by such
Holder or underwriter and stated to be specifically for use therein.
(k) Section 10(b) of the Rights Agreement is amended to provide
as follows:
Each Holder and Other Shareholder will, if Registrable
Securities or other securities held by such Holder are included in the
securities as to which such registration, qualification or compliance is being
effected, indemnify and hold harmless the Company, each of its directors,
officers and agents and each underwriter, if any, of the Company's securities
covered by such a registration statement, each person who controls the Company
or such underwriter within the meaning of the Securities Act, and the rules and
regulations thereunder, each other such Holder and Other Shareholder and each of
their officers, directors and partners, and each person controlling such Holder
or Other Shareholder, against all claims, losses, damages and liabilities (or
actions in respect thereof), whether joint or several, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
and will reimburse the Company and such Holders, Other Shareholders, directors,
officers, agents, partners, persons, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
of defending any such claim, loss, damage, liability or action, as such expenses
are incurred, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged omission)
is made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with information furnished in
writing to the Company by such Holder or Other Shareholder and stated to be
specifically for use therein. Notwithstanding the foregoing, no Holder shall be
required to indemnify the Company or its directors, officers, agents or
underwriters if, in the case of settlement of litigation, such settlement is
effected without the consent of the Holders of not less than a majority of the
then outstanding Registrable Securities. In no event shall the liability of a
Holder or Other Shareholder for indemnification under this Section 10 exceed the
proceeds received by such Holder or Other Shareholder in the offering of the
Registrable Securities.
(l) Section 10(c) of the Rights Agreement is amended to provide
as follows:
Each party entitled to indemnification under this
Section 10 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought and shall permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct
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the defense of such claim or any litigation resulting therefrom, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Agreement except to the extent the Indemnifying Party
is prejudiced thereby, and provided further, however, that an indemnified party
(together with all other indemnified parties) shall have the right to retain one
separate counsel, with the reasonable fees and expenses of such counsel 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. No Indemnifying
Party in the defense of any such claim or litigation shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation or which includes any
admission of fault by such Indemnified Party. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with defense of such claim and litigation resulting
therefrom.
(m) Section 10(d) of the Rights Agreement is amended to provide
as follows:
If the indemnification provided for in this Section 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
herein, 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. 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. No indemnified party shall be required to contribute any
amount in excess of the proceeds received by such party in connection with such
registration statement less any amounts paid pursuant to the indemnification
provisions of this Section 10.
(n) Section 14 of the Rights Agreement is amended to provide as
follows:
"14. [intentionally omitted]"
(o) Section 15 of the Rights Agreement is amended to provide as
follows:
The rights to cause the Company to register
Shareholder's securities granted to Shareholder by the Company under Sections 5,
6 and 8 hereof may be transferred or assigned by Shareholder to a transferee or
assignee of any of the Restricted Securities, provided that the
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Company is given written notice by Shareholder at the time of said transfer or
assignment, stating the name and address of said transferee or assignee and
identifying the securities with respect to which such registration rights are
being transferred or assigned, and provided further that the transferee or
assignee of such rights is not deemed by the Board of Directors of the Company,
in its reasonable judgment, to be a competitor of the Company and the Company so
notifies the Shareholder within ten (10) days of receiving such notice that it
deems such transferee or assignee to be a competitor; and provided further that
the transferee or assignee of such rights assumes the obligations of a
Shareholder under this Agreement.
(p) Section 16 of the Rights Agreement is amended to provide as
follows:
Each Shareholder agrees not to sell or otherwise
transfer or dispose of any Common Stock (or other securities) of the Company
held by such Shareholder during a period of time determined by the Company and
its underwriters (not to exceed 180 days) following the effective date of the
registration statement of the Company filed under the Securities Act with
respect to the Company's initial public offering, provided that all executive
officers and directors of the Company who then hold Common Stock (or other
securities) of the Company enter into similar agreements and that the Company
shall use all reasonable efforts to cause all holders of five percent (5%) or
more of the Company's then outstanding Common Stock to enter into similar
agreements. Such agreement shall be in writing in a form satisfactory to the
Company and such underwriter. The Company may impose stop-transfer instructions
with respect to the Shares (or securities) subject to the foregoing restriction
until the end of said period. Notwithstanding the foregoing, Xxxxxxx Xxxxx and
its affiliates may engage in any brokerage, investment advisory, financial
advisory, anti-raid advisory, merger advisory, financing, asset management,
trading, market making, arbitrage and other similar activities conducted in the
ordinary course of Xxxxxxx Sachs and its affiliates' business.
(q) Section 17(a)(i) of the Rights Agreement is amended to add a
new section (F) as follows:
(F) up to an aggregate of 2,626,742 shares of Series D-1
Preferred Stock or Series D-2 Preferred Stock to such
persons as the Company's Board of Directors may approve
with the consent of the holders of at least seventy
percent (70%) of the then outstanding Series D Shares.
2. Waiver of Right of First Refusal. By execution of this Amendment,
each Shareholder, on behalf of itself and each of the other Shareholders, hereby
waives the Right of First Refusal pursuant to Section 17 of the Rights Agreement
to purchase any of the Series D Shares.
3. Governing Law. This Amendment and the legal relations among the
parties arising hereunder shall be governed by and interpreted in accordance
with the laws of the State of California. The parties hereto agree to submit to
the jurisdiction of the federal and state courts of the State of California with
respect to the breach or interpretation of this Amendment or the enforcement of
any and all rights, duties, liabilities, obligations, powers, and other
relations among the parties arising under this Amendment.
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4. Entire Agreement. The Rights Agreement, as amended hereby,
constitutes the full and entire understanding and agreement among the parties
regarding the subject matter herein. Except as otherwise expressly provided in
the Rights Agreement, as amended hereby, the provisions hereof shall inure to
the benefit of, and be binding upon, the successors, assigns, heirs, executors
and administrators of the parties hereto.
5. Full Force and Effect. Except as amended hereby, the Rights Agreement
shall remain in full force and effect.
6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Fourth Amendment
to Registration Rights Agreement as of the date set forth above.
"COMPANY"
WEBVAN GROUP, INC.
(formerly Intelligent Systems for
Retail, Inc.)
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Xxxxx X. Xxxxxxx, President
Address: 0000 X. Xxxxxxxxx Xxxx.,
Xxxxx 000
Xxxxxx Xxxx, XX 00000
"SHAREHOLDERS"
BENCHMARK CAPITAL PARTNERS, L.P.
BENCHMARK FOUNDERS' FUND, L.P.
By: Benchmark Capital Management Co. LLC
---------------------------------
By: /s/ XXXXX X. XXXXXX
---------------------------------
Managing Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
SEQUOIA CAPITAL VII, a California Limited
Partnership
SEQUOIA TECHNOLOGY PARTNERS VII, a
California Limited Partnership
SQP 1997
SEQUOIA 1997 LLC
SEQUOIA INTERNATIONAL PARTNERS
By: SC VII-A Management, LLC
---------------------------------
a California Limited Liability Company,
its General Partner
By: /s/ XXXXXXX X. XXXXXX
---------------------------------
Managing Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxx. 0,
Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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XXXXX X. XXXXXXX AMENDED AND RESTATED
REVOCABLE TRUST DATED DECEMBER 4, 1987
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Xxxxx X. Xxxxxxx, Trustee
Address: 000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
ISR GRAT I
ISR GRAT II
By: /s/ XXXX X. XXXXXX
---------------------------------
Xxxx X. Xxxxxx, Trustee
Address: Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
STANFORD UNIVERSITY
By:
---------------------------------
Title:
------------------------------
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
------------------------------------
XXXX XXXXXXXXX
Address: 00 Xxxx Xxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
WS INVESTMENT COMPANY 97B
By:
---------------------------------
Xxxxxxx X. Xxxxx, Partner
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxxxx
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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------------------------------------
XXXXXXX X. XXXXX
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
------------------------------------
J. XXXXXX XXXXXXXXXX
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
SOFTBANK AMERICA INC.
/s/ XXXXXXX X. XXXXXX XX
------------------------------------
Xxxxxxx X. Xxxxxx XX, Vice President
Address: Attention: Xxxxxxx X. Xxxxxx XX
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
THE XXXXXXXXX FAMILY L.L.C. DATED 09/04/98
------------------------------------
Xxx Xxxxxxxxx, Member
Address: 0000 Xxxx Xxxxxxxx
Xxxxxxxxxx Xxxxx, XX 00000
MARKAS HOLDING B.V.
By: /s/ M.C. VAN DER XXXXX-XXXXXX
---------------------------------
Title: MANAGING DIRECTOR
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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KNIGHT RIDDER INVESTMENT COMPANY
By: /s/
---------------------------------
Title: SVP CFO
------------------------------
YAHOO! INC.
By: /s/ XXXXXXX XXXXXX
---------------------------------
Title: CEO
------------------------------------
XXXXXXX XXXXX
CBS CORPORATION
By: /s/ XXXXXXX X. XXXXXXXX
---------------------------------
Title: EXECUTIVE VICE PRESIDENT, CFO
FLEXTRONICS INTERNATIONAL LTD.
By: /s/ MUIN MIKING
---------------------------------
Title: DIRECTOR
AMB PROPERTY, L.P.
By: AMB Property Corporation, general
partner
By: /s/ XXXXX X. XXXXX
---------------------------------
Title: MANAGING DIRECTOR
------------------------------
E*TRADE GROUP INC.
By: /s/
---------------------------------
Title:ASSISTANT CORPORATE SECRETARY
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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SMALLCAP WORLD FUND, INC.
By: Capital Research and Management Company
By: /S/ XXXXXXX XXXXXX
---------------------------------
Title: SECRETARY
------------------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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"NEW INVESTORS"
SOFTBANK CAPITAL PARTNERS LP
By: SOFTBANK Capital Partners LLC
By: /s/ XXXXXX X. XXXXXX
---------------------------------
Title: Manager
SOFTBANK CAPITAL ADVISORS FUND LLC
By: /s/ XXXXXX X. XXXXXX
---------------------------------
Title: Manager
GS CAPITAL PARTNERS III, L.P.
By: GS Advisors III, L.P.
---------------------------------
Its General Partner
By: GS Advisors III, L.L.C.
---------------------------------
Its General Partner
By: /s/ XXX X. XXXXXXXX, V.P.
---------------------------------
Authorized Signatory
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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XXXXXXX, XXXXX & CO. VERWALTUNGS GMBH
By: /s/ XXXXXX XXXXXXXXX
---------------------------------
Managing Director
and
/s/ XXX X. XXXXXXXX
------------------------------------
Managing Director or Registered Agent
GS CAPITAL PARTNERS III OFFSHORE, L.P.
By: GS Advisors III (Cayman), L.P.
---------------------------------
Its General Partner
By: GS Advisors III, L.L.C.
---------------------------------
Its General Partner
By: /s/ XXX X. XXXXXXXX, V.P.
---------------------------------
Authorized Signatory
STONE STREET FUND 1999, L.P.
By: /s/ XXX X. XXXXXXXX
---------------------------------
Title: V.P.
------------------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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THE XXXXXXX SACHS GROUP, INC.
By: /s/ XXXXXX XXXXXXXXX
---------------------------------
Title: V.P.
------------------------------
SEQUOIA CAPITAL FRANCHISE FUND
SEQUOIA CAPITAL FRANCHISE PARTNERS
By: SCFF Management, LLC
A Delaware Limited Liability
Company
its General Partner
By: /s/ XXXXXXX X. XXXXXX
---------------------------------
Managing Member
XXXXXXX CORPORATION
By:
---------------------------------
Title:
------------------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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EXHIBIT A
SCHEDULE OF NEW INVESTORS
NUMBER
OF NUMBER
SERIES D OF
NAME AND ADDRESS OF SHAREHOLDER SHARES WARRANT SHARES
------------------------------- ------ --------------
SOFTBANK Capital Partners LP 6,478,162
SOFTBANK Capital Advisors Fund LLC 88,688
c/o SOFTBANK America Inc.
Attention: Xxxxxxx X. Xxxxxx XX
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
GS Capital Partners III, L.P. 2,942,731
Xxxxxxx Xxxxx & Co. Verwaltungs GmbH 135,851
GS Capital Partners III Offshore, L.P. 808,993
Stone Street Fund 1999, L.P. 52,535
The Xxxxxxx Xxxxx Group, Inc. 1,313,370
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Sequoia Capital Franchise Fund 2,626,740
Sequoia Capital Franchise Partners
0000 Xxxx Xxxx Xxxx, Xxxx. 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Xxxxxxx Corporation
00 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000 1,200,000
---------- ---------
TOTAL 14,447,070 1,200,000
========== =========
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INTELLIGENT SYSTEMS FOR RETAIL, INC.
THIRD AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT
This Third Amendment (the "AMENDMENT") to Registration Rights Agreement
is made as of January 21, 1999 by and among Intelligent Systems for Retail,
Inc., a California corporation (the "COMPANY"), the Shareholders (as defined
below) and the New Investors listed on Exhibit A hereto (the "NEW INVESTORS").
RECITALS
A. The Company, the holders of the Company's Series A Preferred Stock
and the holders of the Company's Series B Preferred Stock (the "SHAREHOLDERS")
are parties to that certain Registration Rights Agreement dated as of October
29, 1997, as amended as of May 28, 1998 and September 30, 1998 (the "RIGHTS
AGREEMENT").
B. The Company proposes to sell up to 10,780,400 shares of its Series
C Preferred Stock (the "SERIES C SHARES") to the New Investors pursuant to that
certain Series C Preferred Stock Purchase Agreement dated the date hereof (the
"SERIES C PURCHASE AGREEMENT").
C. The Company and the Shareholders desire that the Company sell the
Series C Shares to the New Investors and that the Rights Agreement be amended as
set forth herein.
D. Pursuant to Section 12 of the Rights Agreement, the Company may not
grant further registration rights without the written consent of the Holders of
a majority of the then outstanding Registrable Securities (as defined therein),
subject to certain limited exceptions.
E. The Shareholders desire to waive their Right of First Refusal to
purchase any Series C Shares pursuant to Section 17 of the Rights Agreement.
F. Pursuant to Section 23 thereof, the Rights Agreement may be amended
and all Rights of First Refusal waived upon the written consent of the Company
and the holders of at least seventy percent (70%) of the Registrable Securities
(as defined therein) then held by persons entitled to registration rights
thereunder.
G. The Company and Shareholders holding not less than the minimum
number of shares required to amend the Rights Agreement hereby consent in
writing to this Amendment.
AGREEMENT
1. Amendment of Rights Agreement. The Rights Agreement is hereby
amended as follows:
(a) For all purposes of the Rights Agreement (as amended by
this Amendment), the term "Shares" shall include the Series C Shares.
19
(b) For all purposes of the Rights Agreement (as amended by
this Amendment), the term "Shareholders" shall include the New Investors.
(c) All references in Section 5(a) of the Rights Agreement to
"$10,000,000" are hereby changed to "$25,000,000."
(d) The reference in Section 5(a)(ii)(C) of the Rights
Agreement to "$4.60 per share" is hereby changed to "$10.46 per share."
2. Waiver of Right of First Refusal. By execution of this Amendment,
each Shareholder, on behalf of itself and each of the other Shareholders, hereby
waives the Right of First Refusal pursuant to Section 17 of the Rights Agreement
to purchase any of the Series C Shares.
3. Governing Law. This Amendment and the legal relations among the
parties arising hereunder shall be governed by and interpreted in accordance
with the laws of the State of California. The parties hereto agree to submit to
the jurisdiction of the federal and state courts of the State of California with
respect to the breach or interpretation of this Amendment or the enforcement of
any and all rights, duties, liabilities, obligations, powers, and other
relations among the parties arising under this Amendment.
4. Entire Agreement. The Rights Agreement, as amended hereby,
constitutes the full and entire understanding and agreement among the parties
regarding the subject matter herein. Except as otherwise expressly provided in
the Rights Agreement, as amended hereby, the provisions hereof shall inure to
the benefit of, and be binding upon, the successors, assigns, heirs, executors
and administrators of the parties hereto.
5. Full Force and Effect. Except as amended hereby, the Rights
Agreement shall remain in full force and effect.
6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
20
IN WITNESS WHEREOF, the undersigned have executed this Third Amendment
to Registration Rights Agreement as of the date set forth above.
"COMPANY"
INTELLIGENT SYSTEMS FOR RETAIL, INC.
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Xxxxx X. Xxxxxxx, President
Address: 0000 X. Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxx Xxxx, XX 00000
"SHAREHOLDERS"
BENCHMARK CAPITAL PARTNERS, L.P.
BENCHMARK FOUNDERS' FUND, L.P.
By: Benchmark Capital Management Co. LLC
By: /s/ XXXXX X. XXXXXX
---------------------------------
Managing Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
SEQUOIA CAPITAL VII, a California Limited
Partnership
SEQUOIA TECHNOLOGY PARTNERS VII, a California
Limited Partnership
SQP 1997
SEQUOIA 1997 LLC
SEQUOIA INTERNATIONAL PARTNERS
By: SC VII-A Management, LLC
a California Limited Liability Company,
its General Partner
By: /s/ XXXXXXX X. XXXXXX
Managing Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxx. 0,
Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
[SIGNATURE PAGE TO THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
21
XXXXX X. XXXXXXX AMENDED AND RESTATED
REVOCABLE TRUST DATED DECEMBER 4, 1987
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Xxxxx X. Xxxxxxx, Trustee
Address: 000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
ISR GRAT I
ISR GRAT II
By: /s/ XXXX X. XXXXXX
---------------------------------
Xxxx X. Xxxxxx, Trustee
Address: Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
STANFORD UNIVERSITY
By:
---------------------------------
Title:
------------------------------
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
/s/ XXXX XXXXXXXXX
------------------------------------
XXXX XXXXXXXXX
Address: 00 Xxxx Xxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
[SIGNATURE PAGE TO THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
22
WS INVESTMENT COMPANY 97B
By: /s/ XXXXXXX X. XXXXX
---------------------------------
Xxxxxxx X. Xxxxx, Partner
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxxxx
/S/ XXXXXXX X. XXXXX
------------------------------------
XXXXXXX X. XXXXX
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
/s/ J. XXXXXX XXXXXXXXXX
------------------------------------
J. XXXXXX XXXXXXXXXX
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
SOFTBANK AMERICA INC.
By: /s/ XXX XXXXXX
---------------------------------
Xxx Xxxxxx
Title: VICE CHAIRMAN
Address: Attention: Xxx Xxxxxxx, Vice
Chairman
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
THE XXXXXXXXX FAMILY L.L.C. DATED 09/04/98
/s/ XXX XXXXXXXXX
------------------------------------
Xxx Xxxxxxxxx, Member
Address: 0000 Xxxx Xxxxxxxx
Xxxxxxxxxx Xxxxx, XX 00000
[SIGNATURE PAGE TO THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
23
"NEW INVESTORS"
MARKAS HOLDING B.V.
Print Name
/s/ MRS. M.C. VAN DER XXXXX-XXXXXX
------------------------------------
Signature
If New Investor is an entity, please
print name and title of signatory.
By: XXX. X.X. XXXXXX XXXXX-XXXXXX
------------------------------------
Title: MANAGING DIRECTOR
------------------------------
[SIGNATURE PAGE TO THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
24
"NEW INVESTORS"
CAPITAL RESEARCH AND MANAGEMENT
COMPANY ON BEHALF OF SMALLCAP
WORLD FUND, INC.
------------------------------------
Print Name
/s/ XXXXXXX X. XXXXXX
------------------------------------
Signature
If New Investor is an entity, please
print name and title of signatory.
By: XXXXXXX X. XXXXXX
------------------------------------
Title: SECRETARY
------------------------------
[SIGNATURE PAGE TO THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
25
"NEW INVESTORS"
E*TRADE GROUP, INC.
------------------------------------
Print Name
/S/ XXX XXXXXX
------------------------------------
Signature
If New Investor is an entity, please
print name and title of signatory.
By: XXX XXXXXX
---------------------------------
Title: CFO
------------------------------
[SIGNATURE PAGE TO THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
26
"NEW INVESTORS"
CBS CORPORATION
------------------------------------
Print Name
------------------------------------
Signature
If New Investor is an entity, please
print name and title of signatory.
By: /s/ XXXXXXX X. XXXXXXXX
---------------------------------
Title: EXECUTIVE VICE PRESIDENT,
CHIEF FINANCIAL OFFICER
---------------------------------
[SIGNATURE PAGE TO THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
27
"NEW INVESTORS"
FLEXRONICS INTERNATIONAL, LTD.
------------------------------------
Print Name
/s/ MUIN MIKING
------------------------------------
Signature
If New Investor is an entity, please
print name and title of signatory.
By: C.F. ALAIN AHKONG
---------------------------------
Title: DIRECTOR
------------------------------
[SIGNATURE PAGE TO THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
28
"NEW INVESTORS"
AMB PROPERTY, L.P.
------------------------------------
Print Name
By: AMB PROPERTY CORPORATION
BY: XXXXX X. XXXXX
------------------------------------
Signature
If New Investor is an entity, please
print name and title of signatory.
By: XXXXX X. XXXXX
---------------------------------
Title: MANAGING DIRECTOR, GENERAL
COUNSEL AND SECRETARY
---------------------------------
[SIGNATURE PAGE TO THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
29
"NEW INVESTORS"
KNIGHT RIDDER INVESTMENT COMPANY
------------------------------------
Print Name
/s/ XXXX XXXXXXXXXX
------------------------------------
Signature
If New Investor is an entity, please
print name and title of signatory.
By: XXXX XXXXXXXXXX
---------------------------------
Title: VICE PRESIDENT
------------------------------
[SIGNATURE PAGE TO THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
30
"NEW INVESTORS"
YAHOO! INC.
------------------------------------
Print Name
------------------------------------
Signature
If New Investor is an entity, please
print name and title of signatory.
By: /S/ XXXXXXX XXXXXX
---------------------------------
Title: CHAIRMAN AND CEO
------------------------------
[SIGNATURE PAGE TO THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
31
"NEW INVESTORS"
XXXXXXX X. XXXXX
------------------------------------
Print Name
/s/ XXXXXXX X. XXXXX
------------------------------------
Signature
If New Investor is an entity, please
print name and title of signatory.
By:
---------------------------------
Title:
------------------------------
[SIGNATURE PAGE TO THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
32
EXHIBIT A
SCHEDULE OF NEW INVESTORS
CLOSING - JANUARY 21, 1999
Name and Address of Shareholder Number of Shares
--------------------------------------------------- -----------------
Markas Holding B.V. 2,152,000
x/x XXXX Xxxxx
00 Xxxxxx Xxxxx
Xxxxx, Xxxxxx 75008
Knight Ridder Investment Company 1,147,800
00 X. Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Yahoo! Inc. 1,434,700
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, XX 00000
Xxxxxxx Xxxxx 1,004,300
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
CBS Corporation 717,400
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Flextronics International Ltd. 717,400
000 Xxxx Xxxx Xxxx #00-00
Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxx 000000
AMB Property, L.P. 717,400
000 Xxxxxxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
E-Trade Group Inc. 1,434,700
0 Xxxxxxxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Xxxx & Co. 1,434,700
c/o The Capital Group ----------
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
TOTAL 10,760,400
==========
[SIGNATURE PAGE TO THIRD AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
33
INTELLIGENT SYSTEMS FOR RETAIL, INC.
SECOND AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT
This Second Amendment (the "AMENDMENT") to Registration Rights Agreement
is made as of September 30, 1998 by and among Intelligent Systems for Retail,
Inc., a California corporation (the "COMPANY"), the Shareholders (as defined
below) and the warrantholders listed on Exhibit A hereto (the "WARRANTHOLDERS").
RECITALS
A. The Company and the holders of the Company's Series A Preferred Stock
and Series B Preferred Stock (collectively, the "SHAREHOLDERS") are parties to
that certain Registration Rights Agreement dated as of October 29, 1997, as
amended as of May 28, 1998 (the "RIGHTS AGREEMENT").
B. On or about the date hereof, the Company is issuing to the
Warrantholders warrants to purchase up to an aggregate of 372,263 shares of the
Company's Series B Preferred Stock (the "WARRANTS") in connection with a $17
million secured loan facility.
C. The Company and the Shareholders desire that the Rights Agreement be
amended as set forth herein.
D. Pursuant to Section 12 of the Rights Agreement, the Company may not
grant further registration rights without the prior written consent of the
Holders of at least a majority of the then outstanding Registrable Securities
(as defined therein), subject to certain limited exceptions.
E. Pursuant to Section 23 thereof, the Rights Agreement may be amended
upon the written consent of the Company and the holders of at least seventy
percent (70%) of the Registrable Securities (as defined therein) then held by
persons entitled to registration rights thereunder.
F. The Company and Shareholders holding not less than the minimum number
of shares required to amend the Rights Agreement hereby consent in writing to
this Amendment.
AGREEMENT
1. Amendment of Rights Agreement. The Rights Agreement is hereby amended
as follows:
(a) For all purposes of the Rights Agreement (as amended by
this Amendment) (except for Section 17 thereof), the term "Shares" shall include
the shares of Series B Preferred Stock issuable upon exercise of the Warrants.
(b) For all purposes of the Rights Agreement (as amended by
this Amendment) (except for Section 17 thereof), the term "Shareholders" shall
include the Warrantholders.
34
(c) Notwithstanding anything to the contrary herein, the
Warrantholders are not entitled to any rights pursuant to Section 17 of the
Rights Agreement and shall not become a party to Section 17 of the Rights
Agreement for any purpose.
(d) Section 18 of the Rights Agreement is hereby amended to
read in full as follows:
"Termination of Rights. The provisions of this Agreement, other
than Section 16 hereof, shall terminate upon the first to occur of (a)
the fifth (5th) anniversary of the closing date of the Public Offering;
and (b) as to any Holder on the date on which all Shares and shares of
Common Stock issued or issuable upon conversion of the Shares held by
such Holder may be sold pursuant to Rule 144, provided that such Shares
represent less than one percent (1%) of the Company's then outstanding
equity securities."
2. No Right of First Refusal. By execution of this Amendment, each
Shareholder, on behalf of itself and each of the other Shareholders, hereby
acknowledges that pursuant to Section 17(a)(i)(C) thereof, the right of first
refusal contained in Section 17 of the Rights Agreement does not apply to the
issuance of the Warrants or the shares of Series B Preferred Stock issuable upon
exercise of the Warrants or the shares of Common Stock issuable upon conversion
of such shares of Series B Preferred Stock.
3. Governing Law. This Amendment and the legal relations among the
parties arising hereunder shall be governed by and interpreted in accordance
with the laws of the State of California. The parties hereto agree to submit to
the jurisdiction of the federal and state courts of the State of California with
respect to the breach or interpretation of this Amendment or the enforcement of
any and all rights, duties, liabilities, obligations, powers, and other
relations among the parties arising under this Amendment.
4. Entire Agreement. The Rights Agreement, as amended hereby,
constitutes the full and entire understanding and agreement among the parties
regarding the subject matter herein. Except as otherwise expressly provided in
the Rights Agreement, as amended hereby, the provisions hereof shall inure to
the benefit of, and be binding upon, the successors, assigns, heirs, executors
and administrators of the parties hereto.
5. Full Force and Effect. Except as amended hereby, the Rights Agreement
shall remain in full force and effect.
6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
35
IN WITNESS WHEREOF, the undersigned have executed this Second Amendment
to Registration Rights Agreement as of the date set forth above.
"COMPANY"
INTELLIGENT SYSTEMS FOR RETAIL, INC.
By: /S/ XXXXX X. XXXXXXX
---------------------------------
Xxxxx X. Xxxxxxx, President
Address: 0000 X. Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxx Xxxx, XX 00000
"SHAREHOLDERS"
BENCHMARK CAPITAL PARTNERS, L.P.
BENCHMARK FOUNDERS' FUND, L.P.
By: Benchmark Capital Management Co. LLC
By: /s/ XXXXX X. XXXXXX
---------------------------------
Managing Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
SEQUOIA CAPITAL VII, a California Limited
Partnership
SEQUOIA TECHNOLOGY PARTNERS VII, a California
Limited Partnership
SQP 1997
SEQUOIA 1997 LLC
SEQUOIA INTERNATIONAL PARTNERS
By: SC VII-A Management, LLC
a California Limited Liability Company,
its General Partner
By: /s/ XXXXXXX X. XXXXXX
---------------------------------
Managing Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxx. 0,
Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
[SIGNATURE PAGE TO SECOND AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
36
XXXXX X. XXXXXXX AMENDED AND RESTATED
REVOCABLE TRUST DATED DECEMBER 4, 1987
By: /s/ XXXXX X. XXXXXXX
---------------------------------
Xxxxx X. Xxxxxxx, Trustee
Address: 000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
ISR GRAT I
By: /s/ XXXX X. XXXXXX
---------------------------------
Title: XXXX X. XXXXXX, TRUSTEE
------------------------------
Address: Xxxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Esq.
STANFORD UNIVERSITY
By: /s/ XXXXX XXXXXX
---------------------------------
Title: Gift Administrator, Stanford
Management Co.
------------------------------
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
/S/ XXXX XXXXXXXXX
------------------------------------
XXXX XXXXXXXXX
Address: 00 Xxxx Xxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
[SIGNATURE PAGE TO SECOND AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
37
WS INVESTMENT COMPANY 97B
By: /s/ XXXXXXX X. XXXXX
---------------------------------
Xxxxxxx X. Xxxxx, Partner
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxxxx
/s/ XXXXXXX X. XXXXX
------------------------------------
XXXXXXX X. XXXXX
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
/s/ J. XXXXXX XXXXXXXXXX
------------------------------------
J. XXXXXX XXXXXXXXXX
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
SOFTBANK HOLDINGS INC.
By: /S/ XXXXXX X. XXXXXX
---------------------------------
Xxxxxx X. Xxxxxx
Title: VICE CHAIRMAN
------------------------------
/s/ XXX XXXXXXXXX
------------------------------------
XXX XXXXXXXXX
[SIGNATURE PAGE TO SECOND AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
38
"WARRANTHOLDERS"
LIGHTHOUSE CAPITAL PARTNERS II, L.P.
By: LIGHTHOUSE MANAGEMENT PARTNERS II, L.P.,
its general partner
By: LIGHTHOUSE CAPITAL PARTNERS,
INC., its general partner
By: /s/ XXXXXXX X. XXXXXXXXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxxx
Title: Managing Director
Address for Notices:
Lighthouse Capital Partners II, L.P.
000 Xxxxx'x Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Contract Administrator
Fax: (000) 000-0000
VENTURE LENDING & LEASING, INC.
By: /s/ XXXXXXXX X. XXXXXXXXX
---------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: President
VENTURE LENDING & LEASING II, INC.
By: /s/ XXXXXXXX X. XXXXXXXXX
---------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: President
Address for Notices:
Western Technology Investments
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
[SIGNATURE PAGE TO SECOND AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
39
DOMINION VENTURES, INC.
By: /s/ XXXXXXX XXX
---------------------------------
Name: Xxxxxxx Xxx
Title: Partner
Address for Notices:
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Fax: (000) 000-0000
MMC/GATX PARTNERSHIP NO. 1
By: XXXXX XXXXXXXX & COMPANY, as
General Partner
By: /s/ XXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Secretary
Address for Notices:
MMC/GATX Partnership No. 1
c/o GATX Capital Corporation
Four Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Contract Administration
Fax: (000) 000-0000
[SIGNATURE PAGE TO SECOND AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
40
IMPERIAL BANK
By: /s/ XXXXX XXXXX
---------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
Address for Notices:
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Fax: (000) 000-0000
[SIGNATURE PAGE TO SECOND AMENDMENT TO REGISTRATION RIGHTS AGREEMENT]
41
EXHIBIT A
WARRANTHOLDERS
Name and Address of New Investor Number of Shares
-------------------------------- ----------------
Lighthouse Capital Partners II, L.P. 109,489
000 Xxxxx'x Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Contract Administrator
Venture Lending & Leasing, Inc. 32,847
Western Technology Investments
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxxx
Venture Lending & Leasing II, Inc. 76,643
Western Technology Investments
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxxx
Dominion Ventures, Inc. 65,693
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
MMC/GATX Partnership No. 1 65,693
c/o GATX Capital Corporation
Four Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Contract Administration
Imperial Bank 21,898
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx
42
EXHIBIT 4.2
[insert other amendments of registration rights here - they are formatted in
Word the document is regright2.doc]
43
INTELLIGENT SYSTEMS FOR RETAIL, INC.
AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT
This Amendment (the "AMENDMENT") to Registration Rights Agreement is
made as of May 28, 1998 by and among Intelligent Systems for Retail, Inc., a
California corporation (the "COMPANY"), the Shareholders (as defined below) and
the New Investors listed on Exhibit A hereto (the "NEW INVESTORS").
RECITALS
A. The Company and the holders of the Company's Series A Preferred Stock
(the "SHAREHOLDERS") are parties to that certain Registration Rights Agreement
dated as of October 29, 1997 (the "RIGHTS AGREEMENT").
B. The Company proposes to sell up to 6,613,160 shares of its Series B
Preferred Stock (the "SERIES B SHARES") to the New Investors pursuant to that
certain Series B Preferred Stock Purchase Agreement dated the date hereof (the
"SERIES B PURCHASE AGREEMENT").
C. The Company and the Shareholders desire that the Company sell the
Series B Shares to the New Investors and that the Rights Agreement be amended as
set forth herein.
D. Pursuant to Section 12 of the Rights Agreement, the Company may not
grant further registration rights without the written consent of the Holders of
a majority of the then outstanding Registrable Securities (as defined therein),
subject to certain limited exceptions.
E. The Shareholders desire to waive their Right of First Refusal to
purchase any Series B Shares pursuant to Section 17 of the Rights Agreement.
F. Pursuant to Section 23 thereof, the Rights Agreement may be amended
and all Rights of First Refusal waived upon the written consent of the Company
and the holders of at least seventy percent (70%) of the Registrable Securities
(as defined therein) then held by persons entitled to registration rights
thereunder.
G. The Company and Shareholders holding not less than the minimum number
of shares required to amend the Rights Agreement hereby consent in writing to
this Amendment.
AGREEMENT
1. Amendment of Rights Agreement. The Rights Agreement is hereby amended
as follows:
-1-
44
(a) For all purposes of the Rights Agreement (as amended by this
Amendment), the term "Shares" shall include the Series B Shares.
(b) For all purposes of the Rights Agreement (as amended by this
Amendment), the term "Shareholders" shall include the New Investors.
(c) Section 17(a)(i) of the Rights Agreement is hereby amended to
add subsection (F) as follows:
"(F) up to 400,000 shares of the Company's Series B
Preferred Stock issued pursuant to transactions approved by the Company's Board
of Directors."
(d) Section 4 of the Rights Agreement is hereby amended to read
in full as follows:
"4. Notice of Proposed Transfers. The holder of each
certificate representing Restricted Securities by acceptance thereof agrees to
comply in all respects with the provisions of this Section 4. Prior to any
proposed transfer of any Restricted Securities (other than under circumstances
described in Sections 5, 6 and 8 hereof), the holder thereof shall give written
notice to the Company of such holder's intention to effect such transfer. Each
such notice shall describe the manner and circumstances of the proposed transfer
in sufficient detail, and shall be accompanied (except for a transfer to a
holder's affiliate, spouse, ancestors, descendants or a trust for any of their
benefit, or in transactions involving the distribution without consideration of
Restricted Securities by a holder to any of its partners or retired partners or
to the estate of any of its partners or retired partners) by either (i) a
written opinion of legal counsel to the holder who shall be reasonably
satisfactory to the Company, addressed to the Company and reasonably
satisfactory in form and substance to the Company's counsel, to the effect that
the proposed transfer of the Restricted Securities may be effected without
registration under the Securities Act or (ii) a "no-action" letter from the
Commission to the effect that the distribution of such securities without
registration will not result in a recommendation by the staff of the Commission
that action be taken with respect thereto, whereupon the holder of such
Restricted Securities shall be entitled to transfer such Restricted Securities
in accordance with the terms of the notice delivered by such holder to the
Company. Each certificate evidencing the Restricted Securities transferred as
above provided shall bear the restrictive legend set forth in Section 3 above,
except that such certificate shall not bear such restrictive legend after the
date of the Company's initial public offering under the Securities Act if the
opinion of counsel or "no-action" letter referred to above expressly indicates
that such legend is not required in order to establish compliance with the Act
or if such legend is no longer required pursuant to Rule 144(k)."
2. Waiver of Right of First Refusal. By execution of this Amendment,
each Shareholder, on behalf of itself and each of the other Shareholders, hereby
waives the Right of First Refusal pursuant to Section 17 of the Rights Agreement
to purchase any of the Series B Shares.
3. Governing Law. This Amendment and the legal relations among the
parties arising hereunder shall be governed by and interpreted in accordance
with the laws of the State of California. The parties hereto agree to submit to
the jurisdiction of the federal and state courts of the State of California with
respect to the breach or interpretation of this Amendment or the enforcement
-2-
45
of any and all rights, duties, liabilities, obligations, powers, and other
relations among the parties arising under this Amendment.
4. Entire Agreement. The Rights Agreement, as amended hereby,
constitutes the full and entire understanding and agreement among the parties
regarding the subject matter herein. Except as otherwise expressly provided in
the Rights Agreement, as amended hereby, the provisions hereof shall inure to
the benefit of, and be binding upon, the successors, assigns, heirs, executors
and administrators of the parties hereto.
5. Full Force and Effect. Except as amended hereby, the Rights Agreement
shall remain in full force and effect.
6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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46
IN WITNESS WHEREOF, the undersigned have executed this Amendment to
Registration Rights Agreement as of the date set forth above.
"COMPANY"
By: /S/ XXXXX X. XXXXXXX
-------------------------------------------------
Xxxxx X. Xxxxxxx, President
Address: 0000 X. Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxx Xxxx, XX 00000
"SHAREHOLDERS:
BENCHMARK CAPITAL PARTNERS, L.P.
BENCHMARK FOUNDERS' FUND, L.P.
By: Benchmark Capital Management Co. LLC
By: /S/ XXXXX X. XXXXXX
-------------------------------------------------
Managing Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
SEQUOIA CAPITAL VII, a California Limited Partnership
SEQUIOIA TECHNOLOGY PARTNERS VII , a California
Limited Partnership
SQP 1997
SEQUOIA 1997 LLC
SEQUOIA INTERNATIONAL PARTNERS
By: SC VII-A Management, LLC,
a California Limited Liability Company,
its General Partner
By: /S/ XXXXXXX X. XXXXXX
-------------------------------------------------
Managing Partner
Address: 0000 Xxxx Xxxx Xxxx. Xxxx. 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
47
XXXXX X. XXXXXXX AMENDED AND RESTATED REVOCABLE
TRUST DATED DECEMBER 4, 1987
By: /S/ XXXXX X. XXXXXXX
--------------------------------------------------
Xxxxx X. Xxxxxxx, Trustee
Address: 000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
ISR GRAT I
By: /S/XXXX X. XXXXXX
-----------------------------
Title: TRUSTEE
---------------------------
Address: 000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxxx
STANFORD UNIVERSITY
By: /S/ XXXXX XXXXXX
---------------------------------------------------
GIFT ADMINISTRATOR,
Title: STANFORD MANAGEMENT CO.
------------------------------------------------
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
/S/ XXXX XXXXXXXXX
------------------------------------------------------
XXXX XXXXXXXXX
Address: 00 Xxxx Xxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
48
WS INVESTMENT COMPANY 97B
By: /S/ XXXXXXX X. XXXXX
-----------------------------------------------
Xxxxxxx X. Xxxxx, Partner
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxxxx
/S/ XXXXXXX X. XXXXX
----------------------------------------------------
XXXXXXX X. XXXXX
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
/S/ J. XXXXXX XXXXXXXXXX
----------------------------------------------------
J. XXXXXX XXXXXXXXXX
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
49
"NEW INVESTORS"
SOFTBANK HOLDINGS INC.
By: /S/ XXXXXX X. XXXXXX
-------------------------------
Xxxxxx X. Xxxxxx
Title: VICE CHAIRMAN
-------------------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
50
/S/ XXX XXXXXXXXX
--------------------------------------
Xxx Xxxxxxxxx
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
51
EXHIBIT A
SCHEDULE OF NEW INVESTORS
FIRST CLOSING - MAY 28, 1998
Name and Address of New Investor Number of Shares
-------------------------------- ----------------
SOFTBANK HOLDINGS INC. 2,730,000
Attention: Xxx Xxxxxx, Vice Chairman
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
52
EXHIBIT A
SCHEDULE OF NEW INVESTORS
SECOND CLOSING - JUNE 12, 1998
Name and Address of Purchaser Number of Shares
----------------------------- ----------------
SOFTBANK HOLDINGS, INC. 3,356,996
Attention: Xxx Xxxxxx, Vice Chairman
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
XXX XXXXXXXXX 200,000
00000 X. 00 Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
TOTAL: 3,556,996
53
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT"), dated as of
October 29, 1997, is entered into by and among Intelligent Systems For Retail,
Inc., a California corporation (the "COMPANY"), and the purchasers listed on
Exhibit A attached hereto (collectively, the "SHAREHOLDERS").
R E C I T A L S
A. The Shareholders and the Company are parties to a Series A Preferred
Stock Purchase Agreement dated as of the date hereof (the "PURCHASE AGREEMENT").
B. The execution of this Agreement is a condition to the closing of the
transactions contemplated by the Purchase Agreement.
C. The Shareholders and the Company desire that the transactions
contemplated by the Purchase Agreement be consummated.
NOW THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
"COMMON STOCK" shall mean the common stock of the Company.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"HOLDER" shall mean any holder, or an assignee under Section 15
hereof, of outstanding Registrable Securities.
"INITIATING HOLDERS" shall mean any Holders who in the aggregate
are Holders of thirty percent (30%) or more of the outstanding Registrable
Securities.
The terms "REGISTER", "REGISTERED" and "REGISTRATION" shall refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering of the
effectiveness of such registration statement.
"REGISTRABLE SECURITIES" shall mean shares of Common Stock (i)
issued or issuable pursuant to the conversion of the Shares, and (ii) issued in
respect of securities issued pursuant to the conversion of the Shares upon any
stock split, stock dividend, recapitalization, substitution, or
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54
similar event; provided, however, that Registrable Securities shall not include
any (a) shares of Common Stock which have previously been registered, (b) shares
of Common Stock which have previously been sold to the public, or (c) securities
which would otherwise be Registrable Securities held by a Holder who is then
permitted to sell all of such securities within any three (3) month period
following the Company's initial public offering pursuant to Rule 144 if such
securities then held by such Holder constitute less than one percent of the
Company's outstanding equity securities.
"REGISTRATION EXPENSES" shall mean all expenses (excluding
underwriting discounts and selling commissions) incurred in connection with a
registration under Sections 5, 6 and 8 hereof, including all registration and
filing fees, printing expenses, fees and disbursements of counsel for the
Company, blue sky fees and expenses and the reasonable fees and expenses (not to
exceed $15,000) of one counsel for the selling Shareholders (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company).
"RESTRICTED SECURITIES" shall mean the securities of the Company
required to bear or bearing the legend set forth in Section 3 hereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"SELLING EXPENSES" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and all
other expenses which are not Registration Expenses.
"SHARES" shall mean shares of the Company's Series A Preferred
Stock.
2. Restrictions on Transferability. The Restricted Securities held by
the Shareholders shall not be transferred except upon the conditions specified
in this Agreement, which conditions are intended to insure compliance with the
provisions of the Securities Act or, in the case of Section 16 hereof, to assist
in an orderly distribution. Each Shareholder will cause any proposed transferee
of Restricted Securities held by that Shareholder to agree to take and hold
those securities subject to the provisions and upon the conditions specified in
this Agreement.
3. Restrictive Legend. Each certificate representing (i) the Shares, and
(ii) shares of the Company's Common Stock issued upon conversion of the Shares,
and (iii) any other securities issued in respect of the Shares, or the Common
Stock issued upon conversion of the Shares, upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event, shall
(unless otherwise permitted or unless the securities evidenced by such
certificate shall have been registered under the Securities Act) be stamped or
otherwise imprinted with a legend substantially in the following form (in
addition to any legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES
LAWS. SUCH SHARES MAY NOT BE SOLD OR OFFERED FOR SALE IN THE
ABSENCE OF SUCH REGISTRATION OR AN
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55
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT. COPIES OF
THE AGREEMENT COVERING THE PURCHASE OF THESE SHARES AND
RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICE
OF THE CORPORATION.
Upon request of a holder of such a certificate, the Company shall
remove the foregoing legend from the certificate or issue to such holder a new
certificate therefor free of any transfer legend, if, with such request, the
Company shall have received either the opinion referred to in Section 4(i) or
the "no-action" letter referred to in Section 4(ii) to the effect that any
transfer by such holder of the securities evidenced by such certificate will not
violate the Securities Act and applicable state securities laws, unless any such
transfer legend may be removed pursuant to Rule 144(k), in which case no such
opinion or "no-action" letter shall be required, and provided that the Company
shall not be obligated to remove any such legends prior to the date of the
initial public offering of the Company's Common Stock under the Securities Act.
4. Notice of Proposed Transfers. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 4. Prior to any proposed transfer
of any Restricted Securities (other than under circumstances described in
Sections 5, 6 and 8 hereof), the holder thereof shall give written notice to the
Company of such holder's intention to effect such transfer. Each such notice
shall describe the manner and circumstances of the proposed transfer in
sufficient detail, and shall be accompanied (except for a transfer to a holder's
spouse, ancestors, descendants or a trust for any of their benefit, or in
transactions involving the distribution without consideration of Restricted
Securities by a holder to any of its partners or retired partners or to the
estate of any of its partners or retired partners) by either (i) a written
opinion of legal counsel to the holder who shall be reasonably satisfactory to
the Company, addressed to the Company and reasonably satisfactory in form and
substance to the Company's counsel, to the effect that the proposed transfer of
the Restricted Securities may be effected without registration under the
Securities Act or (ii) a "no-action" letter from the Commission to the effect
that the distribution of such securities without registration will not result in
a recommendation by the staff of the Commission that action be taken with
respect thereto, whereupon the holder of such Restricted Securities shall be
entitled to transfer such Restricted Securities in accordance with the terms of
the notice delivered by such holder to the Company. Each certificate evidencing
the Restricted Securities transferred as above provided shall bear the
restrictive legend set forth in Section 3 above, except that such certificate
shall not bear such restrictive legend after the date of the Company's initial
public offering under the Securities Act if the opinion of counsel or
"no-action" letter referred to above expressly indicates that such legend is not
required in order to establish compliance with the Act or if such legend is no
longer required pursuant to Rule 144(k).
5. Requested Registration.
(a) Request for Registration. If the Company shall receive from
Initiating Holders a written request that the Company effect any registration
with respect to at least that
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56
number of Registrable Securities which would result in an aggregate offering of
at least $10,000,000, the Company will:
(i) promptly given written notice of the proposed registration
to all other Holders; and
(ii) as soon as practicable, use its diligent best efforts to
effect such registration (including, without limitation, the execution
of an undertaking to file post effective amendments, appropriate
qualification under applicable blue sky or other state securities laws
and appropriate compliance with applicable regulations issued under the
Securities Act) as may be so requested and as would permit or facilitate
the sale and distribution of all or such portion of such Registrable
Securities as are specified in such request, together with all or such
portion of the Registrable Securities of any Holder or Holders joining
in such request as are specified in a written request delivered to the
Company within fifteen (15) days after receipt of such written notice
from the Company; provided that the Company shall not be obligated to
effect, or to take any action to effect, any such registration pursuant
to this Section 5:
(A) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of
process in effecting such registration, qualification or
compliance, unless the Company is already subject to service in
such jurisdiction and except as may be required by the
Securities Act; or
(B) After the Company has effected two (2) such
registrations pursuant to this Section 5(a) and such
registrations have been declared or ordered effective and the
sales of such Registrable Securities have closed; or
(C) Prior to the first to occur of three (3) years following
the date hereof and six (6) months following the closing of the
initial offering to the public of the Company's stock pursuant
to a firm commitment registered underwriting for the account of
the Company at an offering price of at least $4.60 per share (as
adjusted) and in which the aggregate gross proceeds received by
the Company exceed $10,000,000 (the "PUBLIC OFFERING").
Subject to the foregoing clauses (A), (B), and (C), the Company
shall file with the Commission a registration statement covering the Registrable
Securities so requested to be registered as soon as practicable, after receipt
of the request or requests of the Initiating Holders; provided, however, that if
the Company shall furnish to such Holders a certificate signed by the President
of the Company 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 registration statement to be filed on or before the time
filing would be required and it is therefore essential to defer the filing of
such registration statement, the Company shall have the right to defer such
filing (but not more than once during any twelve (12) month period) for a period
of not more than one hundred twenty (120) days after receipt of the request of
the Initiating Holders.
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57
The registration statement filed pursuant to the request of the
Initiating Holders, may, subject to the provisions of Section 5(b) below,
include other securities of the Company which are held by officers or directors
of the Company or which are held by persons who, by virtue of agreements with
the Company, are entitled to include their securities in any such registration,
but the Company shall have no right to include any of its securities in any such
registration except as provided in Section 5(b) below.
(b) Underwriting. If the Initiating Holders intend to distribute
the Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
Section 5, and the Company shall include such information in the written notice
referred to in Section 5(a)(i) above. The right of any Holder to registration
pursuant to Section 5 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. A Holder may elect to include in
such underwriting all or a part of the Registrable Securities he holds.
If officers or directors of the Company shall request inclusion
of securities of the Company other than Registrable Securities in any
registration pursuant to Section 5, or if holders of securities of the Company
who are entitled by contract with the Company to have securities included in
such a registration (such officers, directors, and other shareholders being
collectively referred to as the "OTHER SHAREHOLDERS") request such inclusion,
the Initiating Holders shall, on behalf of all Holders, offer to include the
securities of such Other Shareholders in the underwriting and may condition such
offer on their acceptance of the further applicable provisions of this
Agreement. The Company shall (together with all Holders and Other Shareholders
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the representative of the
underwriter or underwriters (the "UNDERWRITER") selected for such underwriting
by the Company and reasonably acceptable to the Initiating Holders.
Notwithstanding any other provision of this Section 5, if the Underwriter
determines that marketing factors require a limitation on the number of shares
to be underwritten, the Underwriter may (subject to the allocation priority set
forth below) limit the number of Registrable Securities to be included in the
registration and underwriting to not less than thirty percent (30%) of the
securities to be included in such offering. The Company shall so advise all
holders of securities requesting registration, and the number of shares of
securities that are entitled to be included in the registration and underwriting
shall be allocated in the following priority: first, among all Holders of
Registrable Securities (and pro rata among such holders on the basis of all
Registrable Securities then held by such holders) and second, among all Other
Shareholders in proportion, as nearly as practicable, to the amounts of
securities which they had requested to be included in such registration at the
time of filing the registration statement. If any Holder or Other Shareholder
disapproves of the terms of any such underwriting, such holder may elect to
withdraw therefrom by written notice to the Company and the Underwriter. Any
Registrable Securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration. If the Underwriter has not limited the number
of Registrable Securities or other securities to be underwritten, the Company
may include its securities for its own account in such registration if the
underwriter so agrees and if the number of Registrable Securities and other
securities which would otherwise have been included in such registration and
underwriting will not thereby be limited.
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58
6. Company Registration.
(a) If the Company shall determine to register any of its
securities either for its own account or for the account of a security holder or
holders exercising their respective demand registration rights, other than a
registration relating solely to employee benefit plans or a registration
relating solely to a Commission Rule 145 transaction or a registration on any
registration form which does not permit secondary sales or does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities, the Company
will:
(i) promptly give to each Holder written notice thereof; and
(ii) include in such registration, and in any underwriting
involved therein, all of the Registrable Securities specified in
a written request or requests made by any Holder within fifteen
(15) days after receipt of the written notice from the Company
described in clause (i) above, except as set forth in Section
6(b) below. Such written request may specify all or a part of a
Holder's Registrable Securities.
(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 6(a)(i). In such event the right of any Holder to
registration pursuant to Section 6 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 securities through such underwriting shall
(together with the Company and the Other Shareholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the Underwriter selected for underwriting by the Company.
Notwithstanding any other provision of this Section 6, if the Underwriter
determines that marketing factors require a limitation on the number of shares
to be underwritten, and (a) if such registration is the first registered
offering of the Company's securities to the public, the Underwriter may (subject
to the allocation priority set forth below) exclude from such registration and
underwriting some or all of the Registrable Securities which would otherwise be
underwritten pursuant hereto, and (b) if such registration is other than the
first registered offering of the sale of the Company's securities to the public,
the Underwriter may (subject to the allocation priority set forth below) limit
the number of Registrable Securities to be included in the secondary portion of
the registration and underwriting to not less than thirty percent (30%) of the
securities included in such offering. The Company shall so advise all holders of
securities requesting registration, and the number of shares of securities that
are entitled to be included in the registration and underwriting by persons
other than the Company shall be allocated to Holders of Registrable Securities
and Other Shareholders in proportion, as nearly as practicable, to the amounts
of securities which they had requested to be included in such registration at
the time of filing the registration statement. If any Holder or Other
Shareholder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to the Company and the Underwriter. Any
Registrable Securities or other securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
-6-
59
7. Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Agreement shall be borne by the Company, and all Selling Expenses shall be borne
by the holders of the securities so registered pro rata on the basis of the
number of their shares so registered; provided, however, that the Company shall
not be required to pay any Registration Expenses if, as a result of the
withdrawal of a request for registration by the holders of a majority of the
Registrable Securities held by the Initiating Holders requesting such
registration, the registration statement does not become effective, unless such
withdrawal is caused by a material adverse change in the business, operations or
prospects of the Company after such request for registration, or unless the
Initiating Holders agree to have such registration considered a registration
pursuant to Section 5(a)(ii)(B). If the Company is not required to pay any
Registration Expenses, then the Holders and Other Shareholders requesting
registration shall bear such Registration Expenses pro rata on the basis of the
number of their shares so included in the registration request, and such
registration shall not be considered a registration for purposes of Section
5(a)(ii)(B).
8. Registration on Form S-3. The Company shall use its best efforts to
qualify for registration on Form S-3, and to that end, the Company shall comply
with the reporting requirements of the Exchange Act within six (6) months
following the effective date of the first registration of any securities of the
Company for a registered public offering. After the Company has qualified for
the use of Form S-3, Initiating Holders shall have the right to request an
unlimited number of registrations on Form S-3 (such requests shall be in writing
and shall state the number of shares of Registrable Securities to be disposed of
and the intended method of disposition of such shares by each such holder),
subject only to the following limitations:
(i) The Company shall not be obligated to cause a
registration on Form S-3 to become effective prior to one
hundred eighty (180) days following the effective date of a
Company-initiated registration (other than a registration
effected solely to qualify an employee benefit plan or to effect
a business combination pursuant to Rule 145), provided that the
Company shall use its best efforts to achieve such effectiveness
promptly following such one hundred eighty (180) day period;
(ii) The Company shall not be obligated to cause a
registration on Form S-3 to become effective prior to expiration
of one hundred eighty (180) days following the effective date of
the most recent registration pursuant to a request by Initiating
Holders under this Agreement; provided, however, that the
Company shall use its best efforts to achieve such effectiveness
promptly following such one hundred eighty (180) day period;
(iii) The Company shall not be required to effect a
registration pursuant to this Section 8 unless the Holder or
Holders requesting registration propose to dispose of shares of
Registrable Securities having an aggregate price to the public
(before deduction of underwriting discounts and expenses of
sale) of at least $1,000,000; and
(iv) The Company shall not be required to maintain and keep
any such registration on Form S-3 effective for a period
exceeding ninety (90) days from the effective date thereof. The
Company shall give notice to all Holders and all holders
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60
of registration rights under any other agreement of the Company
granting Form S-3 or similar demand registration rights of the
receipt of a request for registration pursuant to this Section 8
and shall provide a reasonable opportunity for all such other
holders to participate in the registration. Subject to the
foregoing, the Company will use its best efforts to effect as
soon as practicable the registration of all shares of
Registrable Securities on Form S-3 to the extent requested by
the Holder or Holders thereof for purposes of disposition. In
the event the Underwriter determines that market factors require
a limitation on the number of shares to be underwritten, then
shares shall be excluded from such registration and underwriting
pursuant to the method described in Section 6(b).
9. Registration Procedures. In the case of each registration effected by
the Company pursuant to this Agreement, the Company will keep each Holder
advised as to the initiation of such registration and as to the completion
thereof. At its expense, the Company will:
(a) Keep such registration effective for a period of ninety (90)
days or until the Holder or Holders have completed the distribution described in
the registration statement relating thereto, whichever first occurs; and
(b) Furnish such number of prospectuses and other documents
incident thereto as a Holder from time to time may reasonably request; and
(c) In connection with any underwritten offering pursuant to a
registration statement filed pursuant to Section 5 hereof, the Company will
enter into any underwriting agreement reasonably necessary to effect the offer
and sale of Common Stock, provided such underwriting agreement contains
customary underwriting provisions.
10. Indemnification.
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61
(a) The Company will indemnify and hold harmless each Holder,
each of its officers, directors and partners, and each person controlling such
Holder, if Registrable Securities held by such Holder are included in the
securities with respect to which registration, qualification or compliance has
been effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter, against all claims, losses, damages and
liabilities (or actions in respect thereof), whether joint or several, arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other document
(including any related registration statement) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, or any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any applicable state securities
law or any rule or regulation thereunder relating to action or inaction required
of the Company in connection with any such registration, qualification or
compliance, and will reimburse each such Holder, each of its officers, directors
and partners, and each person controlling such Holder, each such underwriter and
each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating and defending any
such claim, loss, damage, liability or action, as such expenses are incurred
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement (or alleged untrue statement) or omission (or alleged
omission) based upon information furnished to the Company by such Holder or
underwriter and stated to be specifically for use therein.
(b) Each Holder and Other Shareholder will, if Registrable
Securities or other securities held by such Holder are included in the
securities as to which such registration, qualification or compliance is being
effected, indemnify and hold harmless the Company, each of its directors,
officers and agents and each underwriter, if any, of the Company's securities
covered by such a registration statement, each person who controls the Company
or such underwriter within the meaning of the Securities Act, and the rules and
regulations thereunder, each other such Holder and Other Shareholder and each of
their officers, directors and partners, and each person controlling such Holder
or Other Shareholder, against all claims, losses, damages and liabilities (or
actions in respect thereof), whether joint or several, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
and will reimburse the Company and such Holders, Other Shareholders, directors,
officers, agents, partners, persons, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
of defending any such claim, loss, damage, liability or action, as such expenses
are incurred, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged omission)
is made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with information furnished to the
Company by such Holder or Other Shareholder and stated to be specifically for
use therein. Notwithstanding the foregoing, no Holder shall be required to
indemnify the Company or its directors, officers, agents or underwriters if, in
the case of settlement of litigation, such settlement is effected without the
consent of the Holders of not less than a majority of the then outstanding
Registrable Securities. In no event shall the liability of a Holder or Other
Shareholder for indemnification under this Section 10 exceed
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62
the proceeds received by such Holder or Other Shareholder in the offering of the
Registrable Securities.
(c) Each party entitled to indemnification under this Section 10
(the "INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement except to the extent
the Indemnifying Party is prejudiced thereby, and provided further, however,
that an indemnified party (together with all other indemnified parties) shall
have the right to retain one separate counsel, with the reasonable fees and
expenses of such counsel 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. No Indemnifying Party in the defense of any such claim or litigation
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with defense of
such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 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
herein, 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. 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 provisions of this Section 10,
to the extent that any provision contained in the underwriting agreement entered
into in connection with the underwritten public offering related to any such
claim for indemnification or contribution are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall control.
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(f) The obligations of the Company and the Holders under this
Section 10 shall survive the completion of any offering of Registrable
Securities pursuant to this Agreement, and otherwise.
11. Information by Holder. Each Holder and each Other Shareholder
holding securities included in any registration shall furnish to the Company
such information regarding such Holder or Other Shareholder as the Company may
reasonably request and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Agreement.
12. 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 at least a majority of the then outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company giving such holder or prospective holder any
registration rights the terms of which are equal to or more favorable than the
registration rights granted to Holders hereunder or which would cause a
reduction in the amount of Registrable Securities of the Holders that would be
registrable in a registration statement contemplated by this Agreement or to
require the Company to effect a registration earlier than the date on which
Holders can first require a registration under Section 5(a).
13. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of the
Restricted Securities to the public without registration or pursuant to a
registration statement on Form S-3, the Company agrees to:
(a) Make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act, at all times from
and after ninety (90) days following the effective date of the first
registration under the Securities Act filed by the Company for an offering of
its securities to the general public;
(b) Use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act at any time after it has become subject to
such reporting requirements;
(c) So long as a Shareholder owns any Restricted Securities,
furnish to the Shareholder forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 (at any
time from and after ninety (90) days following the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements).
14. No-Action Letter or Opinion of Counsel in Lieu of Registration.
Notwithstanding anything in this Agreement to the contrary, if at any time after
the date of the Company's initial public offering of its securities under the
Securities Act the Company shall have obtained from the Commission a "no-action"
letter in which the Commission has indicated that it will take no action if,
without registration under the Securities Act, any Holder disposes of
Registrable Securities covered by any request for registration made under this
Agreement in the manner in which such Holder proposes to dispose of the
Registrable Securities included in such request, or if in the opinion of
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counsel for the Company concurred in by counsel for such Holder no registration
under the Securities Act is required in connection with such disposition, the
Registrable Securities included in such request shall not be eligible for
registration under this Agreement; provided, however, with respect to any Holder
who may deemed to be an "affiliate," as that term is defined under Rule 144, if,
notwithstanding the opinion of such counsel, the Holder is unable to dispose of
all of the Registrable Securities included in his request in the manner in which
such Holder so proposes without registration, the Registrable Securities
included in such request shall be eligible for registration under this
Agreement.
15. Transfer or Assignment of Registration Rights. The rights to cause
the Company to register Shareholder's securities granted to Shareholder by the
Company under Sections 5, 6 and 8 hereof may be transferred or assigned by
Shareholder to a transferee or assignee of any of the Restricted Securities,
provided that the Company is given written notice by Shareholder at the time of
said transfer or assignment, stating the name and address of said transferee or
assignee and identifying the securities with respect to which such registration
rights are being transferred or assigned, and provided further that the
transferee or assignee of such rights is not deemed by the Board of Directors of
the Company, in its reasonable judgment, to be a competitor of the Company; and
provided further that the transferee or assignee of such rights assumes the
obligations of a Shareholder under this Agreement.
16. "Market Stand-off" Agreement. Each Shareholder agrees not to sell or
otherwise transfer or dispose of any Common Stock (or other securities) of the
Company held by such Shareholder during a period of time determined by the
Company and its underwriters (not to exceed 180 days) following the effective
date of the registration statement of the Company filed under the Securities Act
with respect to the Company's initial public offering, provided that all
executive officers and directors of the Company who then hold Common Stock (or
other securities) of the Company enter into similar agreements and that the
Company shall use all reasonable efforts to cause all holders of five percent
(5%) or more of the Company's then outstanding Common Stock to enter into
similar agreements. Such agreement shall be in writing in a form satisfactory to
the Company and such underwriter. The Company may impose stop-transfer
instructions with respect to the Shares (or securities) subject to the foregoing
restriction until the end of said period.
17. Right of First Refusal.
(a) New Issuances. The Company hereby grants to the Shareholders
the right of first refusal (the "RIGHT OF FIRST REFUSAL") to purchase, pro rata,
all (or any part) of "NEW SECURITIES" (as defined in this Section 17) that the
Company may, from time to time propose to sell and issue. Such pro rata share,
for purposes of this right of first refusal, is the ratio of (X) the sum of the
number of shares of Common Stock then owned by such Shareholder and the number
of shares of Common Stock issuable upon the conversion of the Shares then owned
by such Shareholder, to (Y) the sum of the total number of shares of Common
Stock then outstanding and the total number of shares of Common Stock issuable
upon the conversion or exercise of the total number of shares or options to
purchase shares then outstanding or reserved for issuance. This right of first
refusal shall be subject to the following provisions:
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(i) "NEW SECURITIES" shall mean any Common Stock and
Preferred Stock of the Company whether or not authorized on the date hereof, and
rights, options, or warrants to purchase Common Stock or Preferred Stock and
securities of any type whatsoever that are, or may become, convertible into
Common Stock or Preferred Stock; provided, however, that "NEW SECURITIES" does
not include the following:
(A) shares of Common Stock issuable upon conversion
of the Shares;
(B) securities of the Company issued pursuant to the
bonafide acquisition of a business by the Company by merger, purchase of assets,
or other acquisition or reorganization approved by the Board of Directors;
(C) securities of the Company issued in connection
with equipment lease financing transactions or bank financing transactions
approved by the Board of Directors, including the affirmative vote or consent of
each of the directors elected by the holders of the Company's Series A Preferred
Stock pursuant to Article III, Section 3 of the Company=s Restated Articles of
Incorporation;
(D) shares of Common Stock, or options to purchase
shares of Common Stock, issued or granted to officers, directors, employees and
consultants of the Company pursuant to stock plans and option plans or other
arrangements approved by the Board of Directors, including the affirmative vote
or consent of each of the directors elected by the holders of the Company's
Series A Preferred Stock pursuant to Article III, Section 3 of the Company=s
Restated Articles of Incorporation;
(E) shares of Common Stock or Preferred Stock issued
in connection with any stock split, stock dividend, or recapitalization by the
Company.
(ii) In the event that the Company proposes to undertake
an issuance of New Securities, it shall give each Shareholder written notice of
its intention, describing the type of New Securities, the price, and the general
terms upon which the Company proposes to issue the same. Each Shareholder shall
have twenty (20) days after receipt of such notice to agree to purchase its pro
rata share of such New Securities at the price and upon the terms specified in
the notice by giving written notice to the Company and stating therein the
quantity of New Securities to be purchased.
(iii) In the event that the Shareholders fail to exercise
in full the right of first refusal within the twenty (20) day period specified
above, the Company shall have one hundred twenty (120) days thereafter to sell
(or enter into an agreement pursuant to which the sale of New Securities covered
thereby shall be closed, if at all, within sixty (60) days from the date of said
agreement) the New Securities respecting which the rights of the Shareholders
were not exercised at a price and upon terms no more favorable to the purchasers
thereof than specified in the Company's notice. In the event the Company has not
sold the New Securities within such one hundred twenty (120) day period (or sold
and issued New Securities in accordance with the foregoing within sixty (60)
days from the date of such agreement) the Company shall not thereafter issue or
sell any New
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66
Securities, without first offering such New Securities to the Shareholders in
the manner provided above.
(iv) The Right of First Refusal granted under this Section
17 shall expire immediately prior to the Public Offering.
(v) This Right of First Refusal is nonassignable except to
any transferee to whom registration rights may be transferred pursuant to
Section 15 of this Agreement.
(vi) This Right of First Refusal shall terminate as to any
Shareholder (or any transferee or assignee of such Shareholder) at such time as
such Shareholder ceases to own any Shares or Common Stock issuable upon
conversion of the Shares.
18. Termination of Rights. The provisions of this Agreement shall
terminate upon the first to occur of (a) the fifth (5th) anniversary of the
closing date of the Public Offering; and (b) as to any Holder on the date on
which all Shares and shares of Common Stock issued or issuable upon conversion
of the Shares held by such Holder may be sold pursuant to Rule 144, provided
that such Shares represent less than one percent (1%) of the Company's then
outstanding equity securities.
19. Governing Law. This Agreement and the legal relations between the
parties arising hereunder shall be governed by and interpreted in accordance
with the laws of the State of California. The parties hereto agree to submit to
the jurisdiction of the federal and state courts of the State of California with
respect to the breach or interpretation of this Agreement or the enforcement of
any and all rights, duties, liabilities, obligations, powers, and other
relations between the parties arising under this Agreement.
20. Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement among the parties regarding rights to registration.
Except as otherwise expressly provided herein, the provisions hereof shall inure
to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto.
21. Notices, Etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first-class mail,
postage prepaid, or otherwise delivered by hand or by messenger or by overnight
courier service, addressed (a) if to a Shareholder, at the address set forth on
Exhibit A attached hereto, or at such other address as the Shareholder shall
have furnished to the other parties hereto in writing, or (b) if to any other
holder of any securities, at such address as such holder shall have furnished
the other parties hereto in writing, or, until any such holder so furnishes an
address to the Company, then to and at the address of the last holder of such
Shares who has so furnished an address to the Company, or (c) if to the Company,
at the address of its principal offices set forth on the signature page of this
Agreement, or at such other address as the Company shall have furnished to the
other parties hereto in writing.
22. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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23. Amendments. Any provision of this Agreement may be amended, waived
or modified upon the written consent of the Company and the Shareholders (or
their assignees to whom Shareholders have expressly assigned their rights in
compliance with Section 15 hereof) who then hold at least seventy percent (70%)
of the Registrable Securities then held by persons entitled to registration
rights hereunder, provided further, any such amendment, waiver or modification
applies by its terms to each applicable Shareholder and each such assignee and,
provided further, that a Shareholder or such assignee hereunder may waive any of
such Holder's rights or the Company's obligations hereunder without obtaining
the consent of any other Shareholder or assignee.
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68
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first above written.
INTELLIGENT SYSTEMS FOR RETAIL, INC.
By: /S/ XXXXX X. XXXXXXX
--------------------------------------
Xxxxx X. Xxxxxxx, President
Address: 0000 X. Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxx Xxxx, XX 00000
SHAREHOLDERS
BENCHMARK CAPITAL PARTNERS, L.P.
BENCHMARK FOUNDERS' FUND, L.P.
By: Benchmark Capital Management Co. LLC
By: /S/ XXXXX X. XXXXXX
--------------------------------------
Managing Partner
Address: 0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
SEQUOIA CAPITAL VII, a California Limited Partnership
SEQUIOIA TECHNOLOGY PARTNERS VII , a California
Limited Partnership
SQP 1997
SEQUOIA 1997 LLC
SEQUOIA INTERNATIONAL PARTNERS
By: SC VII-A Management, LLC,
a California Limited Liability Company,
its General Partner
By: /S/ XXXXXXX X. XXXXXX
--------------------------------------
Managing Partner
Address: 0000 Xxxx Xxxx Xxxx. Xxxx. 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
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XXXXX X. XXXXXXX AMENDED AND RESTATED REVOCABLE
TRUST DATED DECEMBER 4, 1987
By: /S/ XXXXX X. XXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxx, Trustee
Address: 000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
XX GRAT I
By: /S/ XXXXXX XXXXXXXXX
-------------------------------
Xxxxxx Xxxxxxxxx
Address: 000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxxx
STANFORD UNIVERSITY
By: /S/ XXXXX XXXXXX
--------------------------------
GIFT ADMINISTRATOR,
Title: STANFORD MANAGEMENT CO.
------------------------------
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
WS INVESTMENT COMPANY 97B
By: /S/ XXXXXXX X. XXXXX
----------------------------------------------
Xxxxxxx X. Xxxxx, Partner
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxxxx
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70
/S/ XXXXXXX X. XXXXX
-------------------------------------------
XXXXXXX X. XXXXX
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
/S/ XXXX XXXXXXXXX
-------------------------------------------
XXXX XXXXXXXXX
Address: 00 Xxxx Xxx
Xxx Xxxxxxxxx, Xxxxxxxxxx00000
/S/ J. XXXXXX XXXXXXXXXX
-------------------------------------------
J. XXXXXX XXXXXXXXXX
Address: 000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
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