EXHIBIT 10.12
CYBERSOURCE CORPORATION
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (the "Agreement") is
made as of the 21st day of October, 1998, by and among CyberSource Corporation,
a Delaware corporation (formerly Internet Commerce Services Corporation, the
"Company"), Xxxxxxx X. XxXxxxxxx ("XxXxxxxxx") (solely with respect to Sections
1.1-1.17, 2.6, and 2.7 hereof) and the Company A Holders, Company B Holders,
Company C Holders, Company D Holders and Company E Holders, each as defined
below.
RECITALS
WHEREAS, the Company and CyberSource Corporation, a California corporation
("CyberSource"), are parties to that certain Conveyance Agreement (the
"Conveyance Agreement") dated December 31, 1997;
WHEREAS, in consideration of the transfer of the Assets (as defined in the
Conveyance Agreement) of CyberSource to the Company, the Company agreed to (x)
assume, perform and fully discharge all of the Liabilities (as defined in the
Conveyance Agreement) of CyberSource, and (y) issue (the "Initial Company Stock
Issuance") to (i) the holders of the Series A Preferred Stock of CyberSource
("CyberSource A Holders"), 1,985,520 shares of the Series A Preferred Stock of
the Company ("Company Series A," and each holder thereof, a "Company A Holder"),
(ii) the holders of the Series B Preferred Stock of CyberSource ("CyberSource B
Holders"), 2,037,038 shares of Series B Preferred Stock of the Company ("Company
Series B," and each holder thereof, a "Company B Holder"), (iii) the holders of
the Series C Preferred Stock of CyberSource ("CyberSource C Holders,"
collectively with the CyberSource A Holders and CyberSource B Holders, the
"CyberSource Preferred Holders", and each a "CyberSource Preferred Holder"),
3,000,000 shares of Series C Preferred Stock of the Company ("Company Series C,"
and each holder thereof, a "Company C Holder"), and to the holders of the
CyberSource Common Stock ("CyberSource Common Holders"), 9,070,000 shares of the
common stock of the Company ("Common Stock" and each holder thereof, a "Company
Common Holder"), with each such issuance to be on a same percentage basis with
respect to each stockholder's stockholdings in CyberSource and with the same
preferential characteristics for the Company's preferred stockholders as those
which existed for the CyberSource stockholders;
WHEREAS, in connection with its entry into the Conveyance Agreement and the
Initial Company Stock Issuance, the Company agreed to provide (in addition to
the preferential characteristics set forth in the Company's Amended and Restated
Certificate of Incorporation (the "Restated Certificate")) to the Company A
Holders, Company B Holders and Company C Holders (collectively, with the Company
D Holders and Company E Holders as defined below, the "Company Preferred
Holders") certain stockholders' rights commensurate with stockholders' rights of
the CyberSource Preferred Holders;
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WHEREAS, in connection with the closing of that certain Series D Preferred
Stock Purchase Agreement dated as of March 18, 1998, the Company issued
1,851,850 shares of Series D Preferred Stock (the "Company Series D") to various
purchasers (each a "Company D Holder");
WHEREAS, in connection with (i) the closing of that certain Series E
Preferred Stock Purchase Agreement (or Agreements, as described therein)
contemporaneously with the execution of this Agreement, the Company will issue
up to approximately 11,049,724 shares of Series E Preferred Stock to various
purchasers (the "Purchasers"), and (ii) the entering into certain strategic
alliance agreements, the Company will issue warrants to purchase Series E
Preferred Stock (such shares described in (i) and (ii), the "Company Series E")
to certain of the Purchasers (collectively, with the Purchasers, the "Company E
Holders," and each, a "Company E Holder") and the Company and all Company
Preferred Holders desire to memorialize certain rights of the Company Preferred
Holders as set forth herein; and
WHEREAS, this Agreement sets forth the agreement between the Company and
the Company Preferred Holders with respect to the stockholder's rights to be
granted to the Company Preferred Holders by the Company.
AGREEMENT
In consideration of the mutual promises, covenants and conditions
hereinafter set forth, the Company and Company Preferred Holders covenant and
agree as follows:
1. Registration Rights. The Company covenants and agrees as follows:
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1.1 Definitions. For purposes of this Section 1:
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(a) The terms "register," "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement
or similar document in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement or
document.
(b) The term "Registrable Securities" means (i) the Common Stock
issuable or issued upon conversion of the Company Series A, Company Series
B, Company Series C, Company Series D and Company Series E (including all
shares of Company Series E issued after the date hereof) (collectively, the
"Company Preferred Shares"), (ii) all Common Stock owned by XxXxxxxxx (or
transferred by XxXxxxxxx to his ancestors, descendants or spouse or to
trusts for the benefit of such persons) (the "XxXxxxxxx Common Stock"),
(iii) any Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is
issued as) a stock split, a dividend or other distribution with respect to,
or in exchange for or in replacement of, such Company Preferred Shares,
excluding in all cases, however, any Registrable Securities sold by a
person in a transaction in which his registration rights are not assigned,
and (iv) all shares of Common Stock which the Company Preferred Holders and
their permitted assignees may hereafter purchase (or shares of Common Stock
issuable
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upon exercise or conversion of securities hereafter purchased) pursuant to
their rights of first refusal or otherwise.
(c) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to the exercisable or convertible securities which are exercisable
or convertible into, Registrable Securities.
(d) The term "Holder" means any person owning or having the right
to acquire Registrable Securities or any assignee thereof in accordance
with Section 1.13 hereof.
(e) The term "Securities Act" means the Securities Act of 1933,
as amended.
1.2 Request for Registration.
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(a) If the Company shall receive (i) at any time following the
first to occur of December 31, 2001 or the date that is six (6) months
after the date of consummation of the Company's sale of its Common Stock in
a bona fide, firm commitment underwriting pursuant to a registration
statement on Form S-1 under the Securities Act (a "Qualifying IPO") a
written request from Holders holding at least fifty percent (50%) of the
Registrable Securities then outstanding (the "First Initiating Holders")
that the Company file a registration statement under the Securities Act
covering the registration in an underwritten public offering of the sale of
Registrable Securities then outstanding having an anticipated aggregate
offering price, net of underwriting discounts and commissions, equal to or
more than $5,000,000 (the "Initial Demand Registration"); or (ii) at any
time after the consummation of the Initial Demand Registration, a written
request from Holders holding at least twenty five percent (25%) of the
Registrable Securities then outstanding (the "Second Initiating Holders")
that the Company file a registration statement under the Securities Act
covering the registration in an underwritten public offering of the sale of
at least 25% of the Registrable Securities then outstanding having an
anticipated aggregate offering price, net of underwriting discounts and
commissions, equal to or more than $1,000,000 (the "Second Demand
Registration"); or (iii) at any time after the consummation of the Second
Demand Registration a written request from Holders holding at least fifty
percent (50%) of the Registrable Securities then outstanding (the "Third
Initiating Holders" collectively with the First Initiating Holders and the
Second Initiating Holders, the "Initiating Holders") that the Company file
a registration statement under the Securities Act covering the registration
in an underwritten public offering of the sale of at least 50% of the
Registrable Securities then outstanding having an anticipated aggregate
offering price, net of underwriting discounts and commissions, equal to or
more than $1,000,000, then the Company shall, within twenty-one (21) days
of the receipt thereof, give written notice of such request to all Holders,
and shall, subject to the limitations of subsection 1.2(b), file as soon as
practicable a registration statement under the Securities Act covering all
Registrable Securities which
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the Holders request to be registered within twenty (20) days of the mailing
of such notice by the Company in accordance with Section 3.5.
(b) Notwithstanding the foregoing, the Company shall not be
obligated to take any action to effect any such registration pursuant to
this Section 1.2:
(i) in any particular jurisdiction in which the Company
would be required to execute a general consent to service of
process in effecting such registration, unless the Company is
already subject to service in such jurisdiction and except as may
be required by the Securities Act; or
(ii) if the Company shall have initiated three (3)
registrations pursuant to this Section 1.2 and the applicable
registration statement has been declared effective by the SEC and
remained effective until the earlier of (A) such time as all of
the Registrable Securities included by the Holders in such
registration have been sold or disposed of by them or (B) the
expiration of the period described in Section 1.4(a). In
addition, a request for registration shall not be deemed to
constitute a registration for purposes of this subparagraph if:
(I) the conditions to closing specified in the purchase agreement
or underwriting agreement entered into in connection with such
registration are not satisfied other than by reason of some act
or omission by the Holders requesting such registration; (II) the
Company voluntarily takes any action that would result in the
Holder not being able to sell such Registrable Securities covered
thereby during the period during which the registration statement
must be kept effective; or (III) if, after it has become
effective, such registration becomes subject to any stop order,
injunction or other order or requirement of the SEC or other
governmental agency or court and such order, injunction or
requirement is not promptly withdrawn or lifted, and such
registration has not otherwise remained effective for the
relevant period (including effective periods both before and
after the order, injunction or requirement is made or imposed).
(c) Subject to the foregoing paragraph 1.2(b), the Company shall
file a registration statement as soon as possible after receipt of the
request or requests of the Initiating Holders under this Section 1.2;
provided, however, that if the Company shall furnish to such Initiating
Holders within sixty (60) days of receipt of such request a certificate
signed by the President of the Company stating that in the good faith
judgment of the Board of Directors of the Company (as evidenced by a board
resolution) it would be significantly detrimental to the Company and its
stockholders for such registration statement to be filed on or before the
date 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 to a date not later than one hundred twenty (120) days
after receipt of such request, provided that the Company will not exercise
this right more than once in any twelve-month period.
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(d) The underwriting shall be managed by an underwriter or
underwriters of national reputation selected by the Initiating Holders,
which selection shall be subject to the consent of the Company, which
consent shall not be unreasonably withheld. The right of any Holder to
registration pursuant to Section 1.2 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting. The Company shall
(together with all Holders proposing to distribute their securities through
such underwriting) enter into an underwriting agreement in customary form
with the underwriter or underwriters selected as above provided.
Notwithstanding any other provision of this Section 1.2, if the
underwriters advise the Initiating Holders and the Company in writing that
marketing factors require a limitation of the number of shares to be
underwritten and that the total amount of securities that all Holders
(initiating and non-initiating) request pursuant to this Section 1.2(d) to
be included in such offering exceeds the amount of securities that the
underwriters reasonably believe compatible with the success of the
offering, the Company shall so advise all Holders and all of the shares to
be included in the registration shall be allocated among all Holders
requesting inclusion (initiating and non-initiating) pro rata according to
the total amount of securities entitled to be included in such registration
owned by each Holder requesting inclusion (initiating or non-initiating) or
in such other proportions as shall be mutually agreed by such selling
stockholders; provided, however, that in the event of such an allocation
XxXxxxxxx may not include more than twenty percent (20%) of the shares to
be included in such registration statement by all selling stockholders (but
in no event greater than XxXxxxxxx'x pro-rata portion of such allocation)
without the consent of the holders of the majority of the shares requesting
inclusion in the registration. For the purposes of this Section 1.2(d) and
Section 1.8 of this Agreement, the language in such sections referring to
XxXxxxxxx'x right to participate as a selling stockholder at the twenty
percent (20%) level means that all Common Stock owned by XxXxxxxxx (or
transferred by XxXxxxxxx to his ancestors, descendants or spouse or to
trusts for the benefit of such persons) (the "XxXxxxxxx Shares") included
in such a registration, whether held by XxXxxxxxx or a transferee of
XxXxxxxxx, shall be counted against such twenty percent (20%) limit. In
addition, the language in Section 1.2(d) and Section 1.8 referring to the
ability of the holders of a majority of the shares requesting inclusion in
a registration to waive such twenty percent (20%) limit means that only the
holders of a majority of such shares, calculated without regard to any
XxXxxxxxx Shares, may effect such a waiver.
If any person does not agree to the terms of any such underwriting, he
shall be excluded therefrom by written notice from the Company or the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
If shares are so withdrawn from the registration, the Company shall then
offer to all persons who have retained the right to include securities in
the registration the right to include additional securities in the
registration in an aggregate amount equal to the number of shares so
withdrawn, with such shares to be allocated among the persons requesting
additional inclusion pro rata according to the total amount of securities
entitled to be included in such registration owned by each such person or
in such other proportions as shall be mutually agreed by such selling
stockholders.
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1.3 Company Registration. If (but without any obligation to do so)
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at any time after the date hereof the Company proposes to register (including
for this purpose a registration effected by the Company for stockholders other
than the Holders of Registrable Securities except a registration in which the
Holders have the right to include Registrable Securities under Section 1.2) any
of its stock or other securities under the Securities Act in connection with the
public offering of such securities solely for cash (other than a registration
relating solely to the sale of securities to participants in a Company stock
plan, or a registration relating to shares to be issued in connection with the
acquisition of another company, or a registration on any form which does not
include substantially the same information as would be required to be included
in a registration statement covering the sale of the Registrable Securities),
the Company shall, at such time, promptly give each Holder of Registrable
Securities written notice of such registration. Upon the written request of
each Holder of Registrable Securities given within twenty (20) days after the
effectiveness of such notice by the Company in accordance with Section 3.5, the
Company shall, subject to the provisions of Section 1.8, cause to be registered
under the Securities Act all of the Registrable Securities that each such Holder
of Registrable Securities has requested to be registered.
1.4 Obligations of the Company. Whenever required under this Section
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1 to effect the registration of any Registrable Securities, the Company shall,
as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective (but in no event later than
one hundred twenty (120) days after the initial request for registration),
and, upon the request of the Holders of a majority of the Registrable
Securities registered thereunder, keep such registration statement
effective for up to one hundred twenty (120) days, plus a period equal to
any period during which the Holders are prohibited from making sales
because of any stop order, injunction or other order or requirement of the
SEC or any other governmental agency or court or a period during which the
happening of any event which makes any statement made in the registration
statement, the prospectus or any document incorporated therein by reference
untrue or misleading in any material respect until a curative amendment or
supplement is filed and furnished to the Holders; provided, however, that
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before filing a registration statement or prospectus or any amendments or
supplements thereto (including documents that would be incorporated or
deemed to be incorporated therein by reference) the Company will furnish to
the Holders of the Registrable Securities covered by such registration and,
the underwriters, and any attorney, accountant or other agent retained by
the Holders of Registrable Securities covered by such registration
statement or underwriters copies of all such documents proposed to be
filed, which documents will be subject to the review and timely comment of
such Holders, such counsel and underwriters, if any, and the Company will
not file any registration statement or any amendment thereto or any
prospectus or any supplement thereto filed in connection with a
registration pursuant to Section 1.2 (including such documents incorporated
by reference and proposed to be filed after the initial filing of the
registration statement) to which the Holders of a majority of the
Registrable Securities covered by such registration statement or the
underwriters, if any, shall reasonably and timely object.
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(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with
such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus and all amendments and
supplements thereto, in conformity with the requirements of the Securities
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of Registrable Securities owned by them;
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or blue
sky laws of such jurisdictions as shall be reasonably requested by the
Holders of Registrable Securities, provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such
states or jurisdictions; and
(e) Enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter of
such offering. Each Holder of Registrable Securities participating in such
underwriting shall also enter into and perform its obligations under such
an agreement.
1.5 Furnish Information. It shall be a condition precedent to the
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obligations of the Company to take any action pursuant to this Section 1 that
the selling Holders of Registrable Securities shall furnish to the Company such
information regarding themselves, the Registrable Securities held by them, and
the intended method of disposition of such securities as shall be required to
effect the registration of the Registrable Securities.
1.6 Expenses of Demand Registration. All expenses other than
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underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements (not to exceed $35,000) of one counsel for the
selling Holders shall be borne by the Company; provided, however, that the
Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 1.2 if the registration request is
subsequently withdrawn at the request of the Holders (initiating and non-
initiating) holding a majority of the Registrable Securities to be registered
(in which case all participating Holders shall bear such expenses), unless the
Holders of at least 66-2/3% of the Registrable Securities agree to forfeit their
right to initiate one demand registration pursuant to Section 1.2. (provided
that if immediately prior to the time of such withdrawal, the Holders have
learned of a materially adverse change in the condition, business or prospects
of the Company from that known to the Holders at the time of their request, then
the Holders shall not be required to pay any such expenses and shall retain
their rights pursuant to Section 1.2).
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1.7 Expenses of Company Registration. The Company shall bear and pay
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all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.3 for each Holder (which right may be assigned as provided
in Section 1.13), including (without limitation) all registration, filing and
qualification fees, printers' and accounting fees relating or apportionable
thereto and the fees and disbursements of one counsel (not to exceed $35,000)
for the selling Holders selected by them, but excluding underwriting discounts
and commissions relating to Registrable Securities.
1.8 Underwriting Requirements. In connection with any offering
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involving an underwriting of shares being issued by the Company, the Company
shall not be required under Section 1.3 to include any of the Holders'
Registrable Securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it, and then only in such quantity as will not, in the opinion of the
underwriters, jeopardize the success of the offering by the Company. If the
total amount of securities, including Registrable Securities, requested by
stockholders to be included in an offering (other than a registration effected
pursuant to Section 1.2) exceeds the amount of securities sold other than by the
Company that the underwriters reasonably believe compatible with the success of
the offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, which the
underwriters believe will not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among the selling stockholders
according to the total amount of securities entitled to be included therein
owned by each selling stockholder or in such other proportions as shall mutually
be agreed to by such selling stockholders). The underwriters, pursuant to the
preceding sentence, may completely exclude the Holder's Registrable Securities
from such underwriting if no other selling stockholders' securities are so
included.
If any person does not agree to the terms of any such underwriting, he shall be
excluded therefrom by written notice from the Company or the underwriter. Any
Registrable Securities or other securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration. If shares are so
withdrawn from the registration, the Company shall then offer to all persons who
have retained the right to include securities in the registration the right to
include additional securities in the registration in an aggregate amount equal
to the number of shares so withdrawn, with such shares to be allocated among the
persons requesting additional inclusion pro rata according to the total amount
of securities entitled to be included in such registration owned by each such
person or in such other proportions as shall be mutually agreed by such selling
stockholders.
For purposes of the immediately preceding parenthetical concerning
apportionment, for any selling stockholder which is a holder of Registrable
Securities and which is a partnership or corporation, the partners, retired
partners and stockholders of such Holder, or the estates and family members of
any such partners and retired partners, and any trusts for the benefit of any of
the foregoing persons shall be deemed to be a single "selling stockholder," and
any pro rata reduction with respect to such "selling stockholder" shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling stockholder," as defined in
this sentence.
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1.9 Delay of Registration. No Holder shall have any right to obtain
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or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.10 Indemnification. In the event any Registrable Securities are
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included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless: (i) each Holder, the officers, directors, agents,
partners and legal counsel of each Holder of Registrable Securities, and
(ii) each person, if any, who controls such Holder within the meaning of
the Securities Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the officers, directors, agents, partners and legal
counsel of such control person, against any losses, claims, damages or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, rule or
regulation insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any of the
following statements, omissions or violations (collectively, a
"Violation"): (A) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (B) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary
to make the statements therein not misleading, or (C) any violation or
alleged violation by the Company of the Securities Act, the Exchange Act,
any state securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law; and the
Company will reimburse each such Holder, officer, agent, director, partner,
legal counsel, underwriter or controlling person of each Holder and each
officer, director, agent, partner and legal counsel of each such
controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided,
however, that the indemnity agreement contained in this subsection 1.10(a)
shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the
consent of the Company (which shall not be unreasonably withheld), nor
shall the Company be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it primarily arises out of
or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in
connection with such registration by any such Holder, officer, partner,
director, agent, legal counsel or controlling person.
(b) To the extent permitted by law, each selling Holder will,
severally but not jointly, indemnity and hold harmless (i) the Company;
each of its officers, directors, agents, partners and legal counsel; and
(ii) each person, if any, who controls the Company within the meaning of
the Securities Act and the officers, directors, agents, partners and legal
counsel of such control person, and any other Holder selling securities in
such registration statement or any of such other Holder's officers,
directors, agents, partners, legal counsel or any person who controls such
Holder, against any losses, claims, damages or liabilities (joint or
several) to which the Company or any officer, director,
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agent, partner, legal counsel, or controlling person, or other such Holder
or director, officer, legal counsel or controlling person of such other
Holder may become subject, under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions. in respect thereto) primarily arise out of or are
based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in
connection with such registration; and each such Holder will reimburse any
legal or other expenses reasonably incurred by the Company or any officer,
director, agent, partner, legal counsel, controlling person, other Holder,
or officer, director, agent,, partner, legal counsel or controlling person
of such other Holder in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided. however, that the
indemnity agreement contained in this subsection 1.10(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of the Holder
(which consent shall not be unreasonably withheld) and provided further
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that in no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the proceeds (net of the
payment of underwriting discounts and commissions payable by such selling
Holder) received by any such selling Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
(c) Promptly after receipt by an indemnified party under this
Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section
1.10, deliver to the indemnifying party a written notice of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party shall have the right to retain
its own counsel at its own expense if it so desires. Notwithstanding the
foregoing, if the indemnified party and the indemnifying party have
conflicting interests with respect to the action so that joint counsel for
them would be inappropriate, (as determined by counsel to the indemnified
party and counsel to the indemnifying party), then the indemnifying party
shall pay reasonable fees and expenses of one counsel to the indemnified
party. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if it
materially adversely effects the ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party
under this Section 1.10, but the omission to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 1.10. No
indemnifying party, in the defense of any such action, 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 liability in respect of such action.
(d) If the indemnification provided for in this Section 1.10 is
held by a court of competent jurisdiction to be unavailable to an
indemnified party, then, except to
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the extent that contribution is not permitted under Section 11(f) of the
Securities Act, each indemnifying party, in lieu of indemnifying such
indemnified party thereunder, hereby agrees to contribute to the amount
paid or payable by such indemnified party 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. The parties hereto
agree that it would not be just and equitable if contribution pursuant to
this Section 1.10(d) were determined by pro rata allocation or by any other
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method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 1.10(d), no indemnifying
party that is a selling Holder shall be required to contribute any amount
in excess of the amount by which the net proceeds received by such selling
Holder from the sale of Registrable Securities exceeds the amount of any
damages that such selling Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission.
Notwithstanding anything to the contrary herein, no party shall be liable
for contribution under this Section 1.10(d) except to the extent and under
the circumstances as such party would have been liable to indemnify under
Section 1.10(a) or Section 1.10(b), as the case may be, if such
indemnification were enforceable under applicable law. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The indemnity and
contribution agreements contained in this Section 1.10 are in addition to
any liability that the indemnifying parties may have to the indemnified
parties.
(e) The obligations of the Company and Holders under this Section
1.10 shall survive the completion of any offering of Registrable Securities
in a registration statement under this Section 1, and otherwise.
1.11 Reports Under Exchange Act. With a view to making available to
--------------------------
the Holders the benefits of Rule 144 promulgated under the Securities Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Company to the public without registration, the Company
agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times after ninety (90)
days after the effective date of the first registration statement filed by
the Company for the offering of its securities to the general public;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by
the Company that it has complied with the reporting requirements of SEC
Rule 144 (at any time after ninety (90) days after the effective date of
the first registration statement filed by the Company), the Securities Act
and the Exchange Act (at any time after it has become subject to such
11
reporting requirements), and (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so
filed by the Company.
1.12. Form S-3 Registration. In case the Company shall receive
---------------------
written request or requests from Holders owning a majority of the Registrable
Securities then outstanding, that the Company effect a registration on Form S-3
and any related qualification or compliance with respect to all or a part of the
Registrable Securities owned by such Holder or Holders, the Company will:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders of
Registrable Securities; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all such portion of such
Holder's or Holders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of
any other Holder or Holders joining in such request as are specified in a
written request given within 20 days after effectiveness of such written
notice from the Company pursuant to Section 3.5 hereof; provided, however,
that the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this Section 1. 12: (i) if Form S-3
is not available for such offering by the Holders; (ii) if the Holders,
together with the holders of any other securities of the Company entitled
to inclusion in such registration, propose to sell Registrable Securities
and such other securities (if any) at an aggregate price to the public of
less than $1,000,000; (iii) if the Company shall furnish to the Holders a
certificate signed by the Chief Executive Officer 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 stockholders for such
Form S-3 Registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the Form S-3
Registration Statement for a period of not more than one hundred twenty
(120) days after receipt of the request of the Holder or Holders under this
Section 1.12; provided, however, that the Company shall not utilize this
right more than once in any 12 month period; (iv) if the Company within the
twelve month period preceding the date of such request, already has
effected two registrations on Form S-3 for the Holders pursuant to this
Section 1.12, or (v) if the Company has completed a Qualifying IPO within
the preceding one hundred eighty (180) days, or (vi) in any particular
jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting
such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after
receipt of the request or requests of the Holders. All expenses, other
than underwriting discounts and commissions, incurred in connection with
requested pursuant to Section 1.12, including (without limitation) all
other registration, filing, qualification, printer's and accounting fees
shall be borne by the Company,
12
including up to $35,000 of reasonable fees and disbursement for one counsel
for the selling Holders.
1.13 Assignment of Registration Rights. The rights to cause the
---------------------------------
Company to register Registrable Securities pursuant to this Section 1 may be
assigned by a Holder to a transferee or assignee who (i) is not a competitor of
the Company and acquires at least fifty thousand (50,000) shares (as adjusted
for stock splits, combinations, etc.) of Registrable Securities, (ii) is a
Holder as defined hereunder, or (iii) is a partner or equity holder or an
affiliate of a Holder (or a third party duly authorized to act on behalf of a
Holder or its partners or equity holders), provided that such partner or equity
holder or affiliate has appointed such Holder (or such duly authorized third
party) as its lawful attorney-in-fact to receive notices, vote and otherwise
make binding decisions under the terms of this Section 1; provided, in each
case, the Company is, within thirty days of such transfer, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
and provided, further, that such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Securities Act.
1.14 "Market Stand-Off" Agreement. Each Holder of Registrable
----------------------------
Securities hereby agrees that it shall not, to the extent requested by the
Company and an underwriter of Common Stock (or other securities) of the Company,
sell or otherwise transfer or dispose of any securities of the Company (other
than securities registered in the offering) during a reasonable and customary
period of time (not to exceed one hundred twenty (120) days), as agreed to by
the Company and the underwriters, following the effective date of a registration
statement of the Company filed under the Securities Act; provided, however,
that:
(a) such agreement shall be applicable only to the first such
registration statement of the Company which covers shares (or securities)
to be sold on its behalf to the public in an underwritten offering; and
(b) all officers and directors of the Company, holders of 5% or
more of the Company's issued and outstanding capital stock and all other
persons with registration rights (whether or not pursuant to this
Agreement) similarly agree not to sell or transfer.
In order to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Registrable Securities of each Holder (and the
shares or securities of every other person subject to the foregoing restriction)
until the end of such reasonable and customary period.
1.15 Amendment of Registration Rights. Any provision of this Section
--------------------------------
1 may be amended and the observance thereof may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company and the holders of at least 66-2/3% of the
Registrable Securities. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any securities purchased
under this Agreement at the time outstanding (including securities into which
such securities are convertible), each future holder of all such securities, and
the Company.
13
1.16 Rights that May be Granted to Subsequent Investors.
--------------------------------------------------
(a) Within the limitations prescribed by this paragraph (a), but
not otherwise, the Company may grant to subsequent investors in the Company
rights of incidental registration (such as those provided in Section 1.3).
Such rights may only pertain to shares of Common Stock, including shares of
Common Stock into which any other securities may be converted. Such rights
may be granted with respect to (i) registrations actually requested by
Initiating Holders pursuant to Section 1.2, but only in respect of that
portion of any such registration as remains after inclusion of all
Registrable Securities requested by Holders and (ii) registrations
initiated by the Company, but only in respect of that portion of such
registration as is available under the limitations set forth in Section 1.8
(which limitations shall apply pro-rata to all Holders) and such rights
shall be limited in all cases to sharing pro-rata in the available portion
of the registration in question with Holders, such sharing to be based on
the number of shares of Common Stock held by the respective Holders and
held by such other investors, plus the number of shares of Common Stock
into which other securities held by the Holders and such other investors
are convertible, which are entitled to registration rights. With respect
to registrations which are for underwritten public offerings, "available
portion" shall mean the portion of the underwritten shares which is
available as specified in clauses (i) and (ii) of the third sentence of
this paragraph (a). Shares not included in such underwriting shall not be
registered.
(b) The Company may not grant to subsequent investors in the
Company rights of registration upon request (such as those provided in
Section 1.2) unless (i) such rights are limited to shares of Common Stock,
(ii) all Holders are given enforceable contractual rights to participate in
registrations requested by such subsequent investors on a pro-rata basis
with such subsequent investors such participation to be on a pro-rata
basis, and subject to the limitations, described in the final three
sentences of paragraph (a) of this Section 1.16, (iii) such rights shall
not become effective prior to one hundred eighty (180) days after the
effective date of the first registration pursuant to Section 1.2 and (iv)
such rights shall not be more favorable than those granted to the Holders.
1.17 Termination of Registration Rights. The Company's obligations
----------------------------------
pursuant to this Section 1 shall terminate with respect to each Holder of
Registrable Securities on the earlier to occur of (i) five years from the date
of consummation a Qualifying IPO or (ii) such time as such Holder is eligible to
sell all of its Registrable Securities pursuant to Rule 144 (other than pursuant
to Rule 144(k)) under the Securities Act in a single three (3) month period
provided that the Company has been continually subject to the reporting
requirements of the Exchange Act for at least two years immediately prior to the
time of such sale.
2. Covenants.
---------
2.1 Delivery of Financial Statements. The Company shall deliver to
--------------------------------
each Company Preferred Holder for as long as such Company Preferred Holder
(together with its affiliates) holds not less than 100,000 Preferred Shares (or
Common Stock into which such
14
Preferred Shares have been converted), as adjusted for stock splits, stock
dividends, reclassifications and similar events:
(a) as soon as practicable, but in any event within one hundred
twenty (120) days after the end of each fiscal year of the Company, an
income statement for such fiscal year, a balance sheet of the Company as of
the end of such year, and a cash flow statement, such year-end financial
reports to be in reasonable detail, prepared in accordance with generally
accepted accounting principles ("GAAP") audited by independent public
accountants of recognized national standing; and
(b) within forty-five (45) days of the end of each quarter, a
statement of operations, cash flow analysis and balance sheet for and as of
the end of such quarter, in reasonable detail; such quarterly statements
shall also compare actual performance to budget and to the prior year's
comparable period.
2.2 Inspections. On a quarterly basis, the Company shall permit each
-----------
Company Preferred Holder or its authorized representatives, at such Company
Preferred Holder's expense, to visit and inspect the Company's properties, to
examine its books of account and records and to discuss the Company's affairs,
finances and accounts with its senior management at reasonable times as may be
requested by the Company Preferred Holder; provided, however, that the Company
shall not be obligated pursuant to this Section 2.2 to provide access to any
information which it reasonably considers to be a trade secret or similar
confidential information.
2.3 Director Elected by Holders of Series C and Series D Preferred
--------------------------------------------------------------
Stock. The Company C Holders and the Company D Holders together shall consult
-----
with the Company with respect to any director elected from time to time by the
Company C Holders and the Company D Holders and will make reasonable efforts to
elect a director reasonably acceptable to the Company; provided that any Senior
Officer of Global Retail Partners shall be acceptable to the Company.
2.4 Termination of Covenants. The covenants set forth in Section 2.1
------------------------
and 2.2 shall terminate and be of no further force or effect upon the
consummation of a Qualifying IPO or the Company first becomes subject to the
periodic reporting requirements of section 13(a) or 15(d) of the Exchange Act,
whichever event shall first occur.
2.5 Insurance. The Company shall keep and maintain in full force and
---------
effect (i) fire and casualty insurance policies, with extended coverage,
reasonably sufficient in amount to allow it to replace any of its properties
that might be damaged or destroyed and (ii) general liability insurance in
amounts customary for entities in similar business and at a similar stage of
development.
2.6 Co-Sale Rights. XxXxxxxxx agrees that during the period ending
--------------
on the consummation of a Qualifying IPO or immediately after the closing of the
sale or merger of the Company (where the Company is not the surviving entity or
where there otherwise is a change of control), he will not sell any shares of
Common Stock of the Company owned by him (the "XxXxxxxxx Common Stock") without
notifying the Company Preferred Holders twenty (20) or
15
more days prior to the closing of such sale and permitting the Company Preferred
Holders to participate (through the sale of shares of Common Stock) in such sale
on a pro-rata basis. A Preferred Holders' pro-rata share shall be that number of
shares of stock equal to the product obtained by multiplying the aggregate
number of shares proposed to be sold in such transaction by a fraction, the
numerator of which is the number of shares of Common Stock then owned by such
Preferred Holder (on as as-converted basis), and the denominator of which is the
total number of shares of Common Stock then owned by XxXxxxxxx and the Company
Preferred Holders (on an as-converted basis). Each Company Preferred Holder must
notify XxXxxxxxx in writing that such Company Preferred Holder will participate
in such sale (and sell such Company Preferred Holder's shares of Common Stock in
strict accordance with the terms and conditions of such sale as described in the
notice) on or before ten (10) business days before the anticipated closing of
such sale, or such Company Preferred Holder will have no right to participate in
such sale. This Section 2.6 shall not pertain to any transfers by XxXxxxxxx to
his ancestors, descendants or spouse or to trusts for the benefit of such
persons, or any bona fide gift by XxXxxxxxx to such persons; provided, however,
any shares of XxXxxxxxx Common Stock transferred in a transaction described in
this sentence shall continue to be subject to the same co-sale obligations set
forth in this Section 2.6 as if XxXxxxxxx continued to own such shares.
2.7 Rights of First Offer on Transfers by XxXxxxxxx. XxXxxxxxx
-----------------------------------------------
agrees that during the period ending on the consummation of a Qualifying IPO or
immediately after the closing of the sale or merger of the Company (where the
Company is not the surviving entity or where there otherwise is a change of
control), he will not sell any shares of XxXxxxxxx Common Stock without
notifying the Company Preferred Holders twenty (20) or more days prior to the
closing of such sale and granting such Company Preferred Holders the right to
purchase all (but not less than all) such XxXxxxxxx Common Stock. Each Company
Preferred Holder may purchase his or its pro rata share of such XxXxxxxxx Common
Stock on the same terms and conditions as XxXxxxxxx is offering such XxXxxxxxx
Common Stock to other persons. A Preferred Holders' pro-rata share shall be
that number of shares of stock equal to the product obtained by multiplying the
aggregate number of shares proposed to be sold in such transaction by a
fraction, the numerator of which is the number of shares of Common Stock then
owned by such Preferred Holder (on as as-converted basis), and the denominator
of which is the total number of shares of Common Stock then owned by the Company
Preferred Holders (on an as-converted basis). Prior to any sale by XxXxxxxxx of
any XxXxxxxxx Common Stock subject to this right of first offer, XxXxxxxxx shall
notify the Company Preferred Holders, in writing, of his intention to sell such
XxXxxxxxx Common Stock, setting forth the terms under which he proposes to make
such sale. Within ten (10) days after receipt of such notice, each Company
Preferred Holder shall notify XxXxxxxxx as to whether he or it desires to
purchase any or all of his or its pro rata share of such XxXxxxxxx Common Stock
for the price and on the general terms specified in the notice. In the event
any Company Preferred Holder elects not to purchase his or its pro rata share of
such XxXxxxxxx Common Stock, the remaining Company Preferred Holders shall have
the right to purchase their pro rata share of such available shares on the terms
described above. XxXxxxxxx shall promptly notify the remaining Company
Preferred Holders of the shares available for purchase ("Remaining XxXxxxxxx
Shares"). If, within ten (10) days after XxXxxxxxx gives his aforesaid notice,
the Company Preferred Holders have not notified XxXxxxxxx that they desire to
purchase the Remaining XxXxxxxxx Shares upon the terms and conditions set forth
in such notice
16
(in the event such shares are over subscribed each Company Preferred Holder will
be entitled to purchase on a pro-rata basis), XxXxxxxxx may, during a period of
one hundred twenty (120) days following the end of such ten (10) day period,
sell such XxXxxxxxx Shares at a price and upon terms and conditions no more
favorable to such purchasers than those set forth in such notice, subject to
compliance with the Co-Sale rights of the Company Preferred Holders set forth in
Section 2.6 hereof. If the Company Preferred Holders elect to purchase all of
the XxXxxxxxx Common Stock offered, the Company Preferred Holders so purchasing
shall pay for the XxXxxxxxx Common Stock by a wire transfer of immediately
available funds or in accordance with the notice against delivery of the
securities at the executive offices of the Corporation at the time of the
scheduled closing therefore; provided that if the notice provides
--------
for payment of non-cash consideration, then each Company Preferred Holder, at
its option, may pay the consideration in cash equal to the present fair market
value of the non-cash consideration offered, which shall be determined by mutual
agreement between the parties. XxXxxxxxx shall take all such action as may be
reasonably required by any regulatory authority in connection with the exercise
by the Company Preferred Holders of the right to purchase XxXxxxxxx Common Stock
as set forth herein. The right of first refusal contained in this Section 2.7
shall not apply to (i) securities sold by XxXxxxxxx in connection with an
underwritten offering pursuant to a registration statement filed under the
Securities Act or in connection with the sale or merger of the Company, or (ii)
any transfers by XxXxxxxxx to his ancestors, descendants or spouse or to trusts
for the benefit of such persons, or any bona fide gift by XxXxxxxxx to such
persons; provided, however, any shares of XxXxxxxxx Common Stock transferred in
a transaction described in this sentence shall continue to be subject to the
same right of first offer obligations set forth in this Section 2.7 as if
XxXxxxxxx continued to own such shares.
2.8 Qualified Small Business Status. The Company shall use its
-------------------------------
commercially reasonable efforts not to and shall not knowingly, without the
prior written consent or affirmative vote or written consent of the holders of
at least a majority of the total outstanding shares of each series of Company
Preferred Shares, voting separately as a class, take any action affecting, or
permit any action, other than a Permitted Action (as defined below), to affect,
the capital structure (including purchases of its own stock) or operation of its
business which would cause the Company Preferred Shares not to qualify as
"qualified small business stock" under Section 1202 of the Internal Revenue Code
of 1986, as amended (the "Code"). As used in this Agreement, "Permitted Action"
shall mean a merger of the Company with or into any other corporation or
corporations (other than a mere reincorporation transaction), a sale of all or
substantially all of the assets of the Company or a transaction or series of
related transactions in which the Company issues shares representing more than
50% of the voting power of the Company immediately after giving effect to such
transaction.
3. Miscellaneous.
-------------
3.1 Successors and Assigns. The terms and conditions of this
----------------------
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties, including permitted transferees of the
Company Preferred Shares and the Common Stock into which Company Preferred
Shares may be converted. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective
17
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
3.2 Governing Law. This Agreement shall be governed by and construed
-------------
under the internal substantive laws (but not the choice of law rules) of the
State of California. The parties hereto expressly consent to the jurisdiction
of the state and federal courts of Santa Xxxxx County, California.
3.3 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.4 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
3.5 Notices. Except as otherwise expressly provided herein, any
-------
notice required or permitted hereunder shall be given in writing and it or any
certificates or other documents delivered hereunder shall be deemed effectively
given or delivered (as the case may be) upon personal delivery (professional
courier permissible) or when mailed by receipted United States certified mail
delivery, five (5) business days after deposit in the United States mail. Such
certificates, documents or notice may be personally delivered or sent to the
following address: (a) if to a Company Preferred Holder, to the address set
forth with respect to such investor on the signature pages attached hereto, or
to such other address of which such investor shall have given notice pursuant
hereto the Company, or (b) if to the Company, to Internet Commerce Services
Corporation, 000 Xxxxx Xxxxxxxxxx Xxxx., Xxxxx 000 , Xxx Xxxx, Xxxxxxxxxx 00000,
or to such other address of which the Company shall have given notice pursuant
hereto.
3.6 Finder's Fee. Each Company Preferred Stockholder severally
------------
agrees to indemnify and hold harmless the Company from any liability for any
commission or compensation in the nature of a finder's fee (and the costs and
expenses of defending against such liability or asserted liability) for which
such investor or any of its officers, partners, employees or representatives is
responsible. The Company agrees to indemnify and hold harmless each Company
Preferred Holder from any liability for any commission or compensation in the
nature of a finder's fee (and the costs and expenses of defending against such
liability or asserted liability) for which the Company or any of its officers,
employees or representatives is responsible.
3.7 Amendments and Waivers. Except as specified in Section 1.15, any
----------------------
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the holders of at least 66-2/3% of shares of the Common Stock issued or
issuable upon conversion of the Company Preferred Shares.
3.8 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and
18
the balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
3.9 Aggregation of Stock. The shares of Company Series A, Company
--------------------
Series B, Company Series C, Company Series D and Company Series E (or Common
Stock issued on conversion thereof) held or acquired by affiliated entities or
persons shall be aggregated together with other shares of the same class for the
purpose of determining the availability of any rights, which are subject to a
vote of the holders of such class, by holders of such class of securities under
this Agreement.
3.10 Confidentiality Agreement. Each Company Preferred Holder and
-------------------------
any successor or assign of such Company Preferred Holder who receives from the
Company or its agents, directly or indirectly, any information which the Company
has not made generally available to the public, acknowledges and agrees that
such information is confidential and for its use only in connection with
evaluating its involvement with the Company, and further agrees that it will not
disseminate such information to any person other than its accountant, investment
advisor or attorney and that such dissemination shall be only for the purpose
described above.
3.11 Enforcement.
-----------
(a) Remedies at Law or in Equity. If the Company or any Company
----------------------------
Preferred Holder shall default in any of its obligations under this
Agreement, the Company or such Company Preferred Holder may proceed to
protect and enforce its rights, including by way of suit in equity or
action at law, whether for the specific performance of any term contained
in this Agreement or for an injunction against the breach of any such term
or in furtherance of the exercise of any power granted in this Agreement or
for damages or to enforce any other legal or equitable right of the Company
or such Company Preferred Holder (including Company Preferred Holder rights
to indemnification) or to take any one or more of such actions. In the
event such an action is brought, the prevailing party in such dispute shall
be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to
this Agreement, including without limitation such reasonable fees and
expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
(b) Remedies Cumulative; Waiver. No remedy referred to herein is
---------------------------
intended to be exclusive, but each shall be cumulative and in addition to
any other remedy referred to above or otherwise available to the Company or
any Company Preferred Holder at law or in equity. No express or implied
waiver by the Company or any Company Preferred Holder of any default shall
be a waiver of any future or subsequent default as to such party. The
failure or delay of the Company or any party in exercising any rights
granted it hereunder shall not constitute a waiver of any such right and
any single or partial exercise of any particular right by such party shall
not exhaust the same or constitute a waiver of any other right provided
herein.
19
(c) Entire Agreement. This Agreement and the other documents and
----------------
agreements delivered pursuant hereto constitute the full and entire
understanding and agreement among the parties with regard to the subjects
hereof and thereof and supersedes any prior agreements and understandings
between the parties regarding the subject matter hereof, including, without
limitation, that certain Investors Rights Agreement dated as of March 17,
1998.
[Remainder of page intentionally left blank]
20
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
"COMPANY" VULCAN VENTURES INCORPORATED
Holder of 925,926 shares of Series B Preferred
Stock
CYBERSOURCE CORPORATION, Holder of 716,666 shares of Series C Preferred
a Delaware corporation Stock
Holder of 735,231 shares of Series D Preferred
Stock
Holder of _______ shares of Series E Preferred
Stock
By: __________________________ By: ______________________________
Name: ________________________ Name: ____________________________
Title: _______________________ Title: ___________________________
"XXXXXXXXX", solely with GLOBAL RETAIL PARTNERS, L.P.
respect to the agreements Holder of 942,865 shares of Series C Preferred
made in Section 1.1-17, Stock
2.6 and 2.7 hereof Holder of 471,390 shares of Series D Preferred
Stock
Holder of _______ shares of Series E Preferred
Stock
_____________________________ By: GLOBAL RETAIL PARTNERS, INC.
Xxxxxxx X. XxXxxxxxx General Partner
By: _______________________________
Name: _____________________________
Title: ____________________________
GLOBAL RETAIL PARTNERS FUNDING, INC.
Holder of 64,912 shares of Series C Preferred
Stock
Holder of 32,456 shares of Series D Preferred
Stock
Holder of ______ shares of Series E Preferred
Stock
By: _______________________________
Name: _____________________________
Title: _____________________________
21
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
"COMPANY" VULCAN VENTURES INCORPORATED
Holder of 925,926 shares of Series B Preferred
CYBERSOURCE CORPORATION, Stock
a Delaware corporation Holder of 716,666 shares of Series C Preferred
Stock
Holder of 735,231 shares of Series D Preferred
Stock
Holder of _______ shares of Series E Preferred
Stock
By: __________________________ By: ______________________________
Name: ________________________ Name: Xxxxxxx X. Xxxxx
Title: _______________________ Title: Vice President
"XXXXXXXXX", solely with GLOBAL RETAIL PARTNERS, L.P.
respect to the agreements Holder of 942,865 shares of Series C Preferred
made in Section 1.1-17, Stock
2.6 and 2.7 hereof Holder of 471,390 shares of Series D Preferred
Stock
Holder of _______ shares of Series E Preferred
Stock
_______________________________ By: GLOBAL RETAIL PARTNERS, INC.
Xxxxxxx X. XxXxxxxxx General Partner
By: ______________________________
Name _____________________________
Title: ___________________________
GLOBAL RETAIL PARTNERS FUNDING, INC.
Holder of 64,912 shares of Series C Preferred
Stock
Holder of 32,456 shares of Series D Preferred
Stock
Holder of _____ shares of Series E Preferred
Stock
By: _______________________________
Name ______________________________
Title: ____________________________
22
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
"COMPANY" VULCAN VENTURES INCORPORATED
Holder of 925,926 shares of Series B Preferred
CYBERSOURCE CORPORATION, Stock
a Delaware corporation Holder of 716,666 shares of Series C Preferred
Stock
Holder of 735,231 shares of Series D Preferred
Stock
Holder of _______ shares of Series E Preferred
Stock
By: __________________________ By: ______________________________
Name: ________________________ Name: ____________________________
Title: _______________________ Title: ___________________________
"XXXXXXXXX", solely with GLOBAL RETAIL PARTNERS, L.P.
respect to the agreements Holder of 942,865 shares of Series C Preferred
made in Section 1.1-17, Stock
2.6 and 2.7 hereof Holder of 471,390 shares of Series D Preferred
Stock
Holder of _______ shares of Series E Preferred
Stock
_______________________________ By: GLOBAL RETAIL PARTNERS, INC.
Xxxxxxx X. XxXxxxxxx General Partner
By: ______________________________
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
GLOBAL RETAIL PARTNERS FUNDING, INC.
Holder of 64,912 shares of Series C Preferred
Stock
Holder of 32,456 shares of Series D Preferred
Stock
Holder of ______ shares of Series E Preferred
Stock
By: _______________________________
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
23
GRP PARTNERS, L.P.
Holder of 61,292 shares of Series C Preferred
Stock
Holder of 30,643 shares of Series D Preferred
Stock
Holder of ______ shares of Series E Preferred
Stock
By: GLOBAL RETAIL PARTNERS, INC.
General Partner
By: ______________________________
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
DLJ DIVERSIFIED PARTNERS, L.P.
Holder of 280,954 shares of Series C Preferred
Stock
Holder of 140,465 shares of Series D Preferred
Stock
Holder of _______ shares of Series E Preferred
Stock
By: DLJ DIVERSIFIED PARTNERS, INC.
General Partner
By: ______________________________
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
DLJ DIVERSIFIED PARTNERS, L.P.
Holder of 104,337 shares of Series C Preferred
Stock
Holder of 52,164 shares of Series D Preferred
Stock
Holder of ______ shares of Series E Preferred
Stock
By: DLJ DIVERSIFIED PARTNERS, INC.
General Partner
By: ______________________________
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
24
DLJ FIRST ESC, L.P.
Holder of 16,228 shares of Series C Preferred
Stock
By: DLJ LBO PLANS MANAGEMENT
CORPORATION, General Partner
By: ______________________________
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
DLJ ESC II, L.P.
Holder of 8,113 shares of Series D Preferred
Stock
Holder of _____ shares of Series E Preferred
Stock
By: DLJ LBO PLANS MANAGEMENT
CORPORATION, General Partner
By: ______________________________
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
X.X. XXXXXXXXX TOWBIN CAPITAL PARTNERS I, L.P.
Holder of 753,131 shares of Series A Preferred
Stock
By: ______________________________
Name Xxxxxx X. Xxxxx
Member of its General Partner, UTCM, LLC
25
DLJ FIRST ESC, L.P.
Holder of 16,228 shares of Series C Preferred
Stock
By: DLJ LBO PLANS MANAGEMENT
CORPORATION, General Partner
By: ______________________________
Name ______________________________
Title: ______________________________
DLJ ESC II, L.P.
Holder of 8,113 shares of Series D Preferred
Stock
Holder of 18,289 shares of Series E Preferred
Stock
By: DLJ LBO PLANS MANAGEMENT
CORPORATION, General Partner
By: ______________________________
Name ______________________________
Title: ______________________________
X.X. XXXXXXXXX TOWBIN CAPITAL
PARTNERS I, L.P.
Holder of 753,131 shares of Series A Preferred
Stock
Holder of 176,796 shares of Series E Preferred
Stock
By: ______________________________
Name ______________________________
Member of its General Partner, UTCM, LLC
26
UT TECHNOLOGY PARTNERS, LDC
Holder of 185,184 shares of Series C Preferred
Stock
Holder of 294,092 shares of Series D Preferred
Stock
Holder of 276,243 shares of Series E Preferred
Stock
By: ______________________________
Name ______________________________
General Partner of its Investment Manager, X.X.
Xxxxxxxxx Towbin Advisors, LP
UT CAPITAL PARTNERS INTERNATIONAL, LDC
Holder of 59,914 shares of Series C Preferred
Stock
Holder of 55,249 shares of Series E Preferred
Stock
By: ______________________________
Name ______________________________
General Partner of its Investment Manager, X.X.
Xxxxxxxxx Towbin Advisors, XX
XXXXXXXXX XXXXXX PRIVATE EQUITY PARTNERS, LP
Holder of 201,961 shares of Series C Preferred
Stock
Holder of 60,583 shares of Series D Preferred
Stock
Holder of 91,050 shares of Series E Preferred
Stock
By: ______________________________
Name ______________________________
Member of its Investment General Partner, X.X.
Xxxxxxxxx Towbin, LLC
27
UNTERBERG HARRIS PRIVATE EQUITY PARTNERS, CV
Holder of 43,137 shares of Series C Preferred
Stock
Holder of 12,940 shares of Series D Preferred
Stock
Holder of 19,448 shares of Series E Preferred
Stock
By: ______________________________
Name ______________________________
Member of its Investment General Partner, X.X.
Xxxxxxxxx Towbin, LLC
VISA INTERNATIONAL SERVICE ASSOCIATION
Holder of 828,729 shares of Series E Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
RAINBOW TRADING PARTNERS, LTD.
Holder of 37,037 shares of Series B Preferred
Stock
Holder of 12,745 shares of Series C Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
RAINBOW TRADING PARTNERS, LTD.
Holder of 37,037 shares of Series B Preferred
Stock
Holder of 12,745 shares of Series C Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
28
UNTERBERG HARRIS PRIVATE EQUITY PARTNERS, CV
Holder of 43,137 shares of Series C Preferred
Stock
Holder of 12,940 shares of Series D Preferred
Stock
Holder of 19,448 shares of Series E Preferred
Stock
By: ______________________________
Xxxxxx X. Xxxxx
Member of its Investment General Partner, X.X.
Xxxxxxxxx Towbin, LLC
VISA INTERNATIONAL SERVICE ASSOCIATION
Holder of _______ shares of Series E Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
RAINBOW TRADING PARTNERS, LTD.
Holder of 37,037 shares of Series B Preferred
Stock
Holder of 12,745 shares of Series C Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
RAINBOW TRADING PARTNERS, LTD.
Holder of 37,037 shares of Series B Preferred
Stock
Holder of 12,745 shares of Series C Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
29
XXXXX X. XXXXXXXXXX AS TRUSTEE FOR THE XXXXX X.
XXXXXXXXXX TRUST
Holder of 46,296 shares of Series B Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
XXXXXXX X. XXXXXXXXXX AS TRUSTEE FOR THE XXXXXXX
X. XXXXXXXXXX REVOCABLE TRUST
Holder of 46,296 shares of Series B Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
RAINBOW TRADING PARTNERS, LTD.
Holder of 503,131 shares of Series A Preferred
Stock
Holder of 147,059 shares of Series C Preferred
Stock
By: Xxxxxxx, Xxxxxx & Xxxxxxxxx Group, L.L.C.
its managing member
By: ______________________________
Name: ______________________________
Title: ______________________________
WILBLAIRCO ASSOCIATES, L.P.
Holder of 231,482 shares of Series B Preferred
Stock
Holder of 58,824 shares of Series C Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
30
XXXXXXX XXXX XXXXXX PUBLIC RELATIONS, INC.
Holder of 166,758 shares of Series A Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
GUILLAUME FRERES, An Investment Partnership
Holder of 125,000 shares of Series A Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
XXXXXX INDUSTRIES, INC.
Holder of 92,593 shares of Series B Preferred
Stock
Holder of 31,863 shares of Series C Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
XXXXXX INC.
Holder of 92,593 shares of Series B Preferred
Stock
Holder of 31,863 shares of Series C Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
31
PACIFIC ASSET PARTNERS
Holder of 55,556 shares of Series B Preferred
Stock
Holder of 14,706 shares of Series C Preferred
Stock
Holder of 13,773 shares of Series D Preferred
Stock
Holder of 71,602 shares of Series E Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
BVP INVESTORS I, LLC
Holder of 435,185 shares of Series B Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
---------------------------------------------
XXXXXX X. XXXXXX, XX.
Holder of 12,500 shares of Series A Preferred
Stock
---------------------------------------------
W. DANA LA FORGE
Holder of 125,000 shares of Series A Preferred
Stock
---------------------------------------------
XXXXX XXXXXXXXX
Holder of 25,000 shares of Series A Preferred
Stock
---------------------------------------------
XXXXXX XXXXXXX
Holder of 25,000 shares of Series A Preferred
Stock
32
X.X. XXXXXXXXX TOWBIN 401k PROFIT SHARING PLAN
FBO XXXXX XXXXXXX
Holder of 5,525 shares of Series E Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
LINDEN PARTNERS LLC
Holder of 19,337 shares of Series E Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
------------------------------------------------
XXXXXXX XXXXXXXXX
Holder of 13,812 shares of Series E Preferred
Stock
------------------------------------------------
XXXXXX X. XXXXXXXXX
Holder of 55,249 shares of Series E Preferred
Stock
------------------------------------------------
XXXXXX XXXX
Holder of 8,287 shares of Series E Preferred
Stock
33
------------------------------------------------
XXXXX X. XXXXXXXXX
Holder of 125,000 shares of Series A Preferred
Stock
------------------------------------------------
XXXXXX X. XXXXXXX
Holder of 125,000 shares of Series A Preferred
Stock
------------------------------------------------
XXXXXXXX X. XXXXXX, XX.
Holder of 34,568 shares of Series B Preferred
Stock
Holder of 12,745 shares of Series C Preferred
Stock
------------------------------------------------
XXXXXXX XXXXX XXXXXX
Xxxxxx of 2,469 shares of Series B Preferred
Stock
X.X. XXXXXXXXX TOWBIN LLC
Holder of 88,397 shares of Series E Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
X.X. XXXXXXXXX TOWBIN 401k PROFIT SHARING PLAN
FBO XXXXXX XXXXXXX
Holder of 13,812 shares of Series E Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
34
XXXXX X. XXXXXXXXXX AS TRUSTEE FOR THE XXXXX X.
XXXXXXXXXX TRUST
Holder of 46,296 shares of Series BPreferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
XXXXXXX X. XXXXXXXXXX AS TRUSTEE FOR THE XXXXXXX
X. XXXXXXXXXX REVOCABLE TRUST
Holder of 46,296 shares of Series BPreferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
RAINBOW TRADING PARTNERS, LTD.
Holder of 503,131 shares of Series B Preferred
Stock
Holder of 147,059 shares of Series C Preferred
Stock
By: Xxxxxxx, Xxxxxx & Xxxxxxxxx Group, L.L.C.
its managing member
By: ______________________________
Name: ______________________________
Title: ______________________________
WILBLAIRCO ASSOCIATES, L.P.
Holder of 231,482 shares of Series B Preferred
Stock
Holder of 58,824 shares of Series C Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
35
XXXXX X. XXXXXXXXXX AS TRUSTEE FOR THE XXXXX X.
XXXXXXXXXX TRUST
Holder of 46,296 shares of Series BPreferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
XXXXXXX X. XXXXXXXXXX AS TRUSTEE FOR THE XXXXXXX
X. XXXXXXXXXX REVOCABLE TRUST
Holder of 46,296 shares of Series BPreferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
RAINBOW TRADING PARTNERS, LTD.
Holder of 503,131 shares of Series B Preferred
Stock
Holder of 147,059 shares of Series C Preferred
Stock
By: Xxxxxxx, Xxxxxx & Xxxxxxxxx Group, L.L.C.
its managing member
By: ______________________________
Name: ______________________________
Title: ______________________________
WILBLAIRCO ASSOCIATES, L.P.
Holder of 231,482 shares of Series B Preferred
Stock
Holder of 58,824 shares of Series C Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
36
XXXXX X. XXXXXXXXXX AS TRUSTEE FOR THE XXXXX X.
XXXXXXXXXX TRUST
Holder of 46,296 shares of Series BPreferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
XXXXXXX X. XXXXXXXXXX AS TRUSTEE FOR THE XXXXXXX
X. XXXXXXXXXX REVOCABLE TRUST
Holder of 46,296 shares of Series BPreferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
RAINBOW TRADING PARTNERS, LTD.
Holder of 503,131 shares of Series B Preferred
Stock
Holder of 147,059 shares of Series C Preferred
Stock
By: Xxxxxxx, Xxxxxx & Xxxxxxxxx Group, L.L.C.
its managing member
By: ______________________________
Name: ______________________________
Title: ______________________________
WILBLAIRCO ASSOCIATES, L.P.
Holder of 231,482 shares of Series B Preferred
Stock
Holder of 58,824 shares of Series C Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
37
GENERAL ELECTRIC CAPITAL CORPORATION
Holder of 2,762,431 shares of Series E Preferred
Stock
By: ______________________________
Name: ______________________________
Title: ______________________________
38
