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EXHIBIT 10.1
DIGITALTHINK, INC.
RESTATED INVESTOR RIGHTS AGREEMENT
This Restated Investor Rights Agreement (the "Agreement") is effective
as of November 10, 1999 by and among DigitalThink, Inc. (the "Company") and the
investors listed on Schedule A attached hereto (the "Investors").
RECITALS
A. The Company sold and issued to certain of the Investors 3,184,000
shares of the Series A-1 Preferred Stock of the Company on August 5, 1996,
7,726,668 shares of Series B Preferred Stock on June 18, 1997, 5,824,306 shares
of Series C Preferred Stock on November 25, 1998, 1,786,667 shares of Series C
Preferred Stock on March 1, 1999, 80,000 shares of Series C Preferred Stock on
June 11, 1999, 213,334 shares of Series C-1 Preferred Stock sold on March 1,
1999 and up to 4,000,000 shares of Series D Preferred Stock on an even date
herewith. Pursuant to that certain Restated Investor Rights Agreement dated as
of March 1, 1999 (the "Prior Rights Agreement") the Company granted to such
Investors certain rights and the Investors entered into certain covenants
between themselves.
B. Pursuant to that certain Series D Preferred Stock Purchase Agreement
of even date herewith (the "Series D Agreement"), the Company has agreed to sell
to certain Investors (the "Series D Holders") a total of up to 4,000,000 shares
of the Series D Preferred Stock of the Company and, as an inducement for the
Series D Holders to purchase such shares, the Company and the existing Investors
have agreed to enter into this Agreement to supersede, amend and restate the
rights granted to and covenants agreed by the existing Investors in the Prior
Rights Agreement. The shares of Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, the Series C-1 Preferred Stock and the shares
of Series D Preferred Stock sold pursuant to the Series D Agreement are
collectively referred to herein as the "Preferred Shares."
NOW THEREFORE, the parties hereby agree as follows:
1. Registration Rights.
1.1Definitions. For purposes of this Agreement:
(a) The term "register", "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Act, and the
declaration or ordering of effectiveness of such registration statement or
document;
(b) The term "Registrable Securities" means (1) all
shares of Common Stock issued or issuable upon conversion of the Preferred
Shares, and (2) any Common Stock of the Company issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, such Preferred Shares or Common Stock referenced in (1) above,
excluding in all
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cases, however, (i) any Registrable Securities sold by a person in a transaction
in which such person's rights under this Section 1 are not assigned, or (ii) any
Registrable Securities sold to or through a broker or dealer or underwriter in a
public distribution or a public securities transaction;
(c) The number of shares of "Registrable Securities then
outstanding" shall mean the number of shares of Common Stock which are
Registrable Securities and (i) are then issued and outstanding or (ii) are then
issuable pursuant to the exercise or conversion of then outstanding and then
exercisable options, warrants or convertible securities.
(d) The term "Holder" means any Investor or other person
owning or having the right to acquire Registrable Securities or any assignee to
whom rights have been assigned in accordance with Section 1.13 hereof. For
purposes of this Agreement, a record holder of Preferred Shares convertible into
Registrable Securities shall be deemed to be the Holder of such Registrable
Securities;
(e) The term "Form S-3" means such form under the Act as
in effect on the date hereof or any registration form under the Act subsequently
adopted by the Securities and Exchange Commission (the "SEC") which permits
inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC; and
(f) The term "Act" shall mean the Securities Act of
1933, as amended.
1.2 Request for Registration.
(a) If the Company shall receive at any time after the
earlier of (1) December 31, 2000 or (2) the date six months after the effective
date of a registration statement filed pursuant to the Act for the initial
public offering of securities of the Company, a written request from the Holders
of at least thirty percent (30%) of the Registrable Securities then outstanding
(including securities convertible into Registrable Securities) or any lesser
number of shares if the anticipated aggregate offering price of the shares to be
registered would exceed $10,000,000 (before any underwriting discounts and
commissions), that the Company file a registration statement under the Act
covering the registration of Registrable Securities, then the Company shall,
within ten (10) days of the receipt thereof, give written notice of such request
to all Holders (the "Request Notice") and shall, only subject to the limitations
of Section 1.2(b), effect as soon as practicable, and in any event within ninety
(90) days of the receipt of such initial request, the registration under the Act
of all Registrable Securities which the Holders request to be registered within
twenty (20) days of the mailing of such written notice by the Company; provided,
however, that the Company shall not be obligated to take any action to effect
any such registration, qualification or compliance pursuant to this Section
1.2(a):
(i) During the period starting with the date
sixty (60) days prior to the Company's estimated date of filing of, and ending
on the date one hundred twenty (120) days immediately following the effective
date of, any registration statement pertaining to securities of the Company
subject to Section 1.3 hereof (other than a registration of securities in a Rule
145 transaction or with respect to an employee benefit plan), provided that the
Company is actively
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employing in good faith all reasonable efforts to cause such registration
statement to become effective;
(ii) After the Company has effected three (3)
such registrations pursuant to this Section 1.2(a), and such registrations have
been declared or ordered effective; or
(iii) If the Company shall furnish to such
Holders a certificate signed by the Chairman of the Board of the Company stating
that in the good faith judgment of the Board of Directors it would be seriously
detrimental to the Company and its shareholders for a registration statement to
be filed at the time filing would be required and it is therefore essential to
defer the filing of such registration statement, then the Company shall have the
right to defer such filing for a period not to exceed one hundred twenty (120)
days from the date of receipt of written request from the Holders; provided,
however, that the Company may not utilize this right more than once in any
twelve (12) month period.
(b) If the Holders initiating the registration request
hereunder (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 this Section 1.2
and the Company shall include such information in the written notice referred to
in Section 1.2(a). In such event, the right of any Holder to include his
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall (together with the Company as provided in Section
1.4(e)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holders. Notwithstanding any other provision of this
Section 1.2, if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company then owned by each Holder; provided,
however, that the Holders shall have the first right to include all of their
shares in the offering before any shares held by other selling shareholders or
the Company may be included in the offering.
1.3 Company Registration. If (but without any obligation to do
so) the Company proposes to register (including for this purpose a registration
effected by the Company for shareholders other than the Holders) any of its
stock or other securities under the 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 on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Registrable Securities), the Company shall, at such
time, promptly give each Holder written notice of such registration. Upon the
written request of each Holder given within twenty (20) days after receipt of
written notice from the Company provided in
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accordance with Section 7.2, the Company shall, subject to the provisions of
Section 1.8, cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested to be registered. If a Holder
elects not to include all of its Registrable Securities in any registration by
the Company, such Holder shall nevertheless continue to have the right to
include any Registrable Securities in any subsequent registration(s) by the
Company of offerings of its securities, all subject to the terms, conditions and
limitations set forth herein
1.4 Obligations of the Company. Whenever required under this
Section 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, 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.
(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 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, in conformity with the
requirements of the 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, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement provided that such underwriting agreement
shall not provide for indemnification or contribution obligations on the part of
the Holders greater than the obligations set forth in Section 1.10(b).
(f) Notify each Holder of Registrable Securities covered
by such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
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(g) Furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Section 1, on the date
that such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 1, if such securities
are being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) if such offering is being
underwritten, a letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the participating
holders.
(h) Cause all Registrable Securities registered pursuant
to this Agreement to be listed on each securities exchange on which similar
securities issued by the Company are then listed
1.5 Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 1
with respect to the Registrable Securities of any selling Holder that such
holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
1.6 Expenses of Demand Registration. All expenses, other than
underwriting discounts and commissions, incurred in connection with the
registration, filing or qualification pursuant to Section 1.2, including,
without limitation, all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel for the selling Holders shall
be borne by the Company; provided, however, that the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 1.2 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered (in which case all Participating Holders shall bear such expenses),
unless the Holders of a majority of the Registrable Securities agree to forfeit
their right to one (1) demand registration pursuant to Section 1.2; provided
further, however, that if at the time of such withdrawal, the Holders have
learned of a material 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 of such expenses and shall retain
their rights pursuant to Section 1.2.
1.7 Expenses of Company Registration. The Company shall bear and
pay 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 for the selling Holders
selected by them, but excluding underwriting discounts and commissions relating
to Registrable Securities.
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1.8 Underwriting Requirements. In connection with any offering
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'
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; provided that such
underwriting agreement shall not provide for indemnification or contribution
obligations on the part of the Holders greater than the obligations set forth in
Section 1.10(b). If the total amount of securities, including Registrable
Securities, requested by shareholders to be included in such offering 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
underwriter(s) may exclude such shares (including Registrable Securities) which
the underwriters believe will jeopardize the success of the offering from the
registration and the underwriting, and the number of shares that may be included
in the registration and the underwriting shall be allocated, first, to the
Company, and second, to each of the Holders requesting inclusion of their
Registrable Securities in such registration statement on a pro rata basis based
on the total number of Registrable Securities then held by each such Holder;
provided, however, that the underwriter(s) may not reduce the amount of
securities of the selling Holders included in the registration below twenty-five
(25%) of the total amount of securities included in such registration, unless
such offering is the initial public offering and such registration does not
include shares of any other selling shareholders, in which event any or all of
the Registrable Securities of the selling Holders may be excluded. In no event
will shares of any other selling shareholder be included in such registration
which would reduce the number of shares which may be included by the selling
Holders. If any Holder disapproves of the terms of any such underwriting, such
Holder may elect to withdraw therefrom by written notice to the Company and the
underwriter, delivered at least ten (10) business days prior to the effective
date of the registration statement. If any Holder withdraws from such
underwriting, the Company shall include in such underwriting a number of shares
of Registrable Securities equal to the number of shares which such Holder
withdrew from the underwriting allocated to those Holders participating in the
registration who desire to register additional Registrable Securities on a pro
rata basis based on the number of Registrable Securities then held by each such
Holder. Any Registrable Securities excluded or withdrawn (and not reallocated)
from such underwriting shall be excluded and withdrawn from the registration.
For purposes of apportionment, any Holder of Registrable Securities which is a
partnership or corporation, the partners, retired partners and shareholders 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 "Holder", and any pro rata reduction with respect to such
"Holder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"Holder," as defined in this sentence.
1.9 Delay of Registration. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
1.10 Indemnification. In the event any Registrable Securities
are included in a registration statement under this Section 1:
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(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the officers, directors and partners of
each Holder, any underwriter (as defined in the Act) for such Holder and each
person, if any, who controls such Holder or underwriter within the meaning of
the Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"),
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Act, the 1934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the Act, the 1934 Act
or any state securities law; and the Company will pay to each such Holder,
underwriter or controlling person, as incurred, any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this Section 1.10(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder
will indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement, each of its officers,
directors and partners and any controlling person of any such underwriter or
other Holder, against any losses, claims, damages, or liabilities (joint or
several) to which any of the foregoing persons may become subject, under the
Act, the 1934 Act or other federal or state law, insofar as such losses, claims,
damages, or liabilities (or actions in respect thereto) arise out of or are
based upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written
information furnished by such Holder expressly for use in connection with such
registration; and each such Holder will pay, as incurred, any legal or other
expenses reasonably incurred by any person intended to be indemnified pursuant
to this Section 1.10(b), in connection with investigating or defending any such
loss, claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this Section 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 in no event shall any indemnity under this
Section 1.10(b) exceed the net proceeds from the offering received by such
Holder.
(c) Promptly after receipt by an indemnified party under
this Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified
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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 indemnified and
indemnifying parties; provided, however, that an indemnified party shall have
the right to retain its own counsel, with the fees and expenses to be paid by
the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.10, but the omission to so deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
1.10.
(d) If the indemnification provided for in Section 1.10
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, that in no event shall any contribution by a
Holder hereunder exceed the proceeds from the offering received by such Holder.
(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 Securities Exchange Act of 1934. With a view
to making available to the Holders the benefits of Rule 144 promulgated under
the Act and any other rule or regulation of the SEC that may at any time permit
a Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144, at all times after 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) take such action, including the voluntary
registration of its Common Stock under Section 12 of the 1934 Act, as is
necessary to enable the Holders to utilize Form S-3 for the
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sale of their Registrable Securities, such action to be taken as soon as
practicable after the end of the fiscal year in which the first registration
statement filed by the Company for the offering of its securities to the general
public is declared effective;
(c) file with the SEC in a timely manner all reports and
other documents required of the Company under the Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns
any Registrable Securities, forthwith upon request (i) a written statement by
the Company that it has complied with the reporting requirements of SEC Rule 144
(at any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
1.12 Form S-3 Registration.
(a) In case the Company shall receive from any Holder or
Holders, a written request or requests that the Company effect a registration on
Form S-3 and any related qualification or compliance with respect to all or a
part of the Registrable Securities owned by such Holder or Holders, the Company
will:
(i)promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders;
and
(ii) as soon as practicable, effect such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Holder's or Holders' Registrable Securities as are specified in
such request, together with all or such portion of the Registrable Securities of
any other Holder or Holders joining in such request as are specified in a
written request given within twenty (20) days after receipt of such written
notice from the Company; provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance, pursuant
to this Section 1.12: (1) if Form S-3 is not available for such offering by the
Holders; (2) 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 anticipated
aggregate price to the public (net of any underwriters' discounts or
commissions) of less than $1,000,000; (3) if the Company shall furnish to the
Holders a certificate signed by the Chairman of the Board 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 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,
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that the Company shall not utilize this right more than once in any twelve (12)
month period; (4) if the Company has already effected one registration on Form
S-3 in the six (6) month period preceding the request for the Holders pursuant
to this Section 1.12; or (5) 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.
(b) If the Holders initiating the registration request
hereunder (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 part of their request made pursuant to this Section 1.12
and the Company shall include such information in the written notice referred to
in Section 1.12(a)(i). In such event, the right of any Holder to include his
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall (together with the Company as provided in Section
1.4(e)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holders. Notwithstanding any other provision of this
Section 1.12, if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder; provided, however,
that the Holders shall have the first right to include all of their shares in
the offering before any shares held by other selling shareholders or the Company
may be included in the offering.
(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 and shall remain effective until the
registered shares are sold or three months have expired, whichever comes first.
All expenses incurred in connection with a registration requested pursuant to
Section 1.12, including, without limitation, all registration, filing,
qualification, printer's and accounting fees and the reasonable fees and
disbursements of one counsel for the selling Holders selected by them, but
excluding any underwriters' discounts or commissions associated with Registrable
Securities, shall be borne by the Company. Registrations effected pursuant to
this Section 1.12 shall not be counted as demands for registration or
registrations effected pursuant to Section 1.2 or 1.3, respectively.
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 that is an affiliate of the
Holder or who acquires at least 250,000 shares of Registrable Securities,
provided the Company is, within a reasonable time after such transfer, furnished
with written notice of the name and address of such transferee or assignee and
the securities with respect to which such registration rights are being
assigned; and provided, further, that such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the
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transferee or assignee is restricted under the Act. Notwithstanding the above,
such rights may be assigned by a Holder to a limited partner, general partner,
former partner or other affiliate of a Holder, and in the case of a Regulated
Shareholder, such rights may also be assigned to any Affiliate (as hereafter
defined) or other transferee or assignee, regardless of the number of shares
acquired.
1.14 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 50% of the outstanding Registrable
Securities, the prior written consent of the holders of at least 50% of the
Series B Preferred Stock, the prior written consent of the holders of at least
50% of the Series C Preferred Stock and the prior written consent of the holders
of at least 50% of the Series D Preferred Stock, enter into any agreement with
any holder or prospective holder of any securities of the Company which would
grant such holder or prospective holder pari passu or superior registration
rights.
1.15 "Market Stand-Off" Agreement. Each holder of securities
which are or at one time were Registrable Securities (or which are or were
convertible into Registrable Securities) hereby agrees that, during a period not
to exceed one hundred eighty (180) days, following the effective date of a
registration statement of the Company filed under the Act in connection with the
initial public offering of the Company's securities, it shall not, to the extent
requested by the Company and such underwriter, sell or otherwise transfer or
dispose of (other than to a donee who agrees to be similarly bound) any Common
Stock of the Company held by it at any time during such period except Common
Stock included in such registration; provided, however, that:
(a) such agreement shall be applicable only to the first
such registration statement of the Company which covers Common Stock (or other
securities) to be sold on its behalf to the public in an underwritten initial
public offering; and
(b) all officers and directors of the Company enter into
similar agreements.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Investor (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
1.16 Termination of Registration Rights. No shareholder shall be
entitled to exercise any right provided for in this Section 1 after five (5)
years following the consummation of the sale of securities pursuant to a
registration statement filed by the Company under the Act in connection with the
initial firm commitment underwritten offering of its securities to the general
public, provided that the aggregate proceeds of such registration exceed
$15,000,000 at a per share issuance price of at least $8.00 per share.
2. Right of First Offer.
2.1 Grant of Right. Subject to the terms and conditions
specified in this Section 2, the Company hereby grants to each Investor a right
of first offer with respect to future sales by the Company of its Future Shares
(as hereinafter defined) and each Investor grants to the Company a
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right of first offer with respect to all future sales of the shares listed
opposite each Investor's name on Schedule A attached hereto ("Investor Shares").
2.2 Future Shares. "Future Shares" shall mean shares of any
capital stock of the Company, whether now authorized or not, and any rights,
options or warrants to purchase such capital stock, and securities of any type
that are, or may become, convertible into such capital stock; provided however,
that "Future Shares" do not include (i) the Preferred Shares, the Common Stock
issued or issuable upon the conversion of Preferred Shares, any Class A Common
Stock issued or issuable upon the conversion of Class B Common Stock, any Class
B Common Stock issued or issuable upon the conversion of Class A Common Stock,
any Series C-1 Preferred Stock issued or issuable upon conversion of the Series
C Preferred Stock, and any Series C Preferred Stock issued or issuable upon
conversion of the Series C-1 Preferred Stock; (ii) securities offered pursuant
to a registration statement filed under the Act, (iii) securities issued
pursuant to the acquisition of another corporation by the Company by merger of,
purchase of substantially all of the assets of or other reorganization, and (iv)
securities issued or issuable to officers, directors, employees, consultants or
lessors of the Company pursuant to any plan or arrangement approved by the Board
of Directors of the Company, and (v) securities issued or issuable to strategic
partners or licensors pursuant to any plan or arrangement approved by the Board
of Directors of the Company, provided that, in addition to the purchase of
securities, such strategic partners or licensors also enter into a material
business relationship with the Company.
2.3 Notice. In the event the Company or an Investor proposes to
offer any of its Future Shares or Investor Shares, the Company or the Investor,
as applicable, shall first make an offering of such shares to each Investor or
the Company in accordance with the following provisions:
In the case of a proposed sale by the Company:
(a) The Company shall deliver a notice by certified mail
(the "Notice") to the Investors, or an assignee or transferee to whom such
rights have been assigned in accordance with Section 2.5 stating (i) its bona
fide intention to offer such Future Shares, (ii) the number of such Future
Shares to be offered, (iii) the price, if any, for which it proposes to offer
such Future Shares, and (iv) a statement as to the number of days from receipt
of such Notice within which the Investor must respond to such Notice.
(b) Within twenty (20) calendar days after receipt of
the Notice, the Investor may elect to purchase or obtain, at the price and on
the terms specified in the Notice, up to that portion of such Future Shares
which equals the proportion that the number of shares of Common Stock issued and
held, or issuable upon conversion of the Investor Shares then held, by such
Investor bears to the total number of shares of Common Stock issued and
outstanding, including shares issuable upon conversion of convertible securities
issued and outstanding. The Company shall promptly, in writing, inform each
Investor which purchases of all the Future Shares available to it (the
"Fully-Exercising Investor") of any other Investor's failure to do likewise.
During the ten-day period commencing after receipt of such information, each
Fully-Exercising Investor shall be entitled to obtain that portion of the Future
Shares offered to the Investors which was not subscribed for, which is equal to
the proportion that the number of shares of Common Stock issued and held, or
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issuable upon conversion of the Shares then held, held by such Fully-Exercising
Investor bears to the total number of shares of Common Stock issued and
outstanding, including shares issuable upon conversion of convertible securities
issued and outstanding, then held by all Fully-Exercising Investors who wish to
purchase some of the unsubscribed shares.
In the case of a proposed sale by an Investor:
(a) The Investor shall deliver a notice by certified
mail (the "Investor's Notice") to the Company stating (i) the existence of a
bona fide offer to purchase Investor Shares, (ii) the number of such Investor
Shares to be offered, (iii) the price for which it proposes to offer such
Investor Shares, and (iv) a statement as to the number of days from receipt of
such Investor's Notice within which the Company must respond to such Investor's
Notice.
(b) Within twenty (20) calendar days after receipt of
the Investor's Notice, the Company may elect to purchase or obtain, at the price
and on the terms specified in the Investor's Notice, all or a portion of the
Investor Shares so offered.
2.4 Sale after Notice. If all such Future Shares referred to in
the Notice are not elected to be obtained as provided in Section 2.3 hereof, the
Company may, during the 90-day period following the expiration of the period
provided in Section 2.3 hereof, offer the remaining unsubscribed Future Shares
to any person or persons at a price per share not less than, and upon terms no
more favorable to the offeree than those specified in the Notice. If the Company
does not enter into an agreement for the sale of the Future Shares within such
period, or if such agreement is not consummated within ninety (90) days of the
execution thereof, the right provided hereunder shall be deemed to be revived
and such Future Shares shall not be offered unless first reoffered to the
Investors in accordance herewith. If all such Investor Shares referred to in the
Investor's Notice are not elected to be purchased as provided in Section 2.3
hereof, the Investor may, during the ninety (90) day period following the
expiration of the period provided in Section 2.3 hereof, offer the remaining
unsubscribed Investor Shares to any person or persons at a price per share not
less than, and upon terms no more favorable to the offeree than those specified
in the Investor's Notice. If the Investor does not enter into an agreement for
the sale of the Investor Shares within such period, or if such agreement is not
consummated within ninety (90) days of the execution thereof, the right provided
hereunder shall be deemed to be revived and such Investor Shares shall not be
offered unless first reoffered to the Company in accordance herewith.
2.5 Assignment. The right of first offer granted under this
Section 2 is assignable by the Investors to any transferee of a minimum of
250,000 shares of Common Stock (including any shares of Common Stock into which
shares of Preferred Stock are convertible) or to any affiliate of any Investor,
including in the case of a Regulated Shareholder, to an Affiliate or any
transferee in a transfer required as a result of a Regulatory Problem.
2.6 Termination of Rights. Neither an Investor nor the Company
shall be entitled to exercise any right provided for in this Section 2 (i) upon
the consummation of the sale of securities pursuant to a registration statement
filed by the Company under the Act in connection with the initial firm
commitment underwritten offering of its securities to the general public, at a
price per
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share of at least $8.00 and aggregate offering proceeds of at least $15,000,000
or (ii) when the Company first becomes subject to the periodic reporting
requirements of Section 12(g) or 15(d) of the Securities Exchange Act of 1934,
whichever event shall first occur.
2.7 Exceptions. An Investor shall have no obligation to comply
with the provisions set forth in Section 2.1 hereof with respect to sales to
affiliates (including, in the case of a Regulated Shareholder, Affiliates).
3. Information Rights.
3.1 Delivery of Financial Statements. The Company shall deliver
to each Investor which holds, together with its affiliates (including Affiliates
and transferees in a transfer required as a result of a Regulatory Problem, an
aggregate of 500,000 shares of Registrable Securities (a "Major Investor"):
(a) as soon as practicable, but in any event within
ninety (90) days after the end of each fiscal year of the Company, statements of
operations and income and cash flow for such fiscal year, a balance sheet of the
Company as of the end of such year, and a schedule as to the sources and
applications of funds for such year, such year-end financial reports to be in
reasonable detail, prepared in accordance with generally accepted accounting
principles ("GAAP"), and audited and certified by independent public accountants
selected by the Company;
(b) within forty five (45) days of the end of each
fiscal quarter, and until a public offering of Common Stock of the Company, an
unaudited statement of operations and balance sheet for and as of the end of
such quarter, in reasonable detail and prepared in accordance with GAAP, subject
to year end audit adjustments and the absence of footnotes;
(c) within fifteen (15) days of the end of each month,
and until a public offering of Common Stock of the Company, an unaudited
statement of operations and balance sheet for and as of the end of such month,
in reasonable detail and prepared in accordance with GAAP, subject to year end
audit adjustments and the absence of footnotes;
(d) at least thirty (30) days prior to the beginning of
each fiscal year, and until a public offering of Common Stock of the Company, an
annual budget and operating plans for such fiscal year (and as soon as
available, any subsequent revisions thereto);
(e) with respect to the financial statements called for
in subsection (b) and (c) of this Section 3.1, an instrument executed by the
Chief Financial Officer or President of the Company and certifying that such
financials were prepared in accordance with GAAP consistently applied with prior
practice for earlier periods and fairly present the financial condition of the
Company and its results of operation for the period specified, subject to
year-end audit adjustments and the absence of footnotes.
3.2 Inspection Rights. In addition to any rights which any Holder may
have under applicable law, each Major Investor shall have the right to visit and
inspect any of the properties of the Company or any of its subsidiaries, and to
discuss the affairs, finances and accounts of the
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Company or any of its subsidiaries with its officers, and to review such
information as is reasonably requested all at such reasonable times and as often
as may be reasonably requested; provided, however, that the Company shall not be
obligated under this Section 3.2 with respect to a competitor of the Company or
with respect to information which the Board of Directors determines in good
faith is confidential and should not, therefore, be disclosed.
3.3 Additional Information. For a period of three years after
the Company first becomes subject to the periodic reporting requirements of
Sections 12(g) or 15(d) of the Securities Exchange Act of 1934, the Company
shall deliver to each Major Investor a copy of all reports filed with the
Securities and Exchange Commission under such provisions.
3.4 Board Visitation Rights. A representative from Torstar
Corporation, a representative from BT Investment Partners, Inc., a
representative from Service Master Venture Fund, L.L.C., a representative from
Cambridge Technology Capital Fund I, L.P. and a representative of Worldview
Technology Partners shall each have the right to attend the Company's Board of
Directors meetings and to receive, at the same time such information as is
provided to its directors and notice and copies of all information furnished to
directors in connection with all meetings of the Board of Directors.
3.5 Assignment. The information rights granted under this
Section 3 are assignable by the Investors to any transferee of a minimum of
500,000 shares of Common Stock (including any shares of Common Stock into which
shares of Preferred Stock are convertible) or to any affiliate, including in the
case of a Regulated Shareholder, to an Affiliate or any transferee in a transfer
required as a result of a Regulatory Problem.
3.6 Termination of Covenants. The covenants set forth in Section
3.1 and 3.2 shall terminate as to Investors and be of no further force or effect
when the first sale of securities pursuant to a registration statement filed by
the Company under the Act in connection with the firm commitment underwritten
offering of its securities to the general public is consummated or when the
Company first becomes subject to the periodic reporting requirements of Sections
12(g) or 15(d) of the 1934 Act, whichever event shall first occur.
4. Regulatory Compliance Cooperation.
4.1 Definitions.
"Affiliate" means, with respect to any Person, (i) a director or
executive officer of such Person or any Person identified in clause (iii) below,
(ii) a spouse, parent, sibling or descendant of such Person (or a spouse,
parent, sibling or descendant of any director or executive officer of such
Person), (iii) any other Person that, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with such
Person, and (iv) a limited partner, general partner or former partner of a
Person that is a partnership. As used in this definition, the term "control"
means the possession, directly or indirectly, of the power to direct the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
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When such term is used in the context of a Regulatory Problem, it also has the
meaning ascribed to it in any Applicable Law.
"Applicable Law," with respect to any Person, means all
provisions of all laws, statutes, ordinances, rules, regulations, permits,
certificates or orders of any Governmental Authority applicable to such Person
or any of its assets or property or to which such Person or any of its assets or
property is subject, and all judgments, injunctions, orders and decrees of all
courts and arbitrators in proceedings or actions in which such Person is a party
or by which it or any of its assets or properties is or may be bound or subject.
"Board" means The Board of Governors of the United States
Federal Reserve System.
"Person" shall be construed as broadly as possible and shall
include an individual or natural person, a partnership (including a limited
liability partnership), a corporation, an association, a joint stock company, a
limited liability company, a trust, a joint venture, an unincorporated
organization and a governmental authority.
"Regulated Shareholder" shall mean BT Investment Partners, Inc.
and any other shareholder (i) that is subject to the provisions of Regulation Y
of the Board of Governors of the United States Federal Reserve System, 12 C.F.R.
Part 225 (or any successor to such regulations); (ii) that holds Securities of
the Company; and (iii) that has provided written notice to the Company of its
status as a "Regulated Shareholder" hereunder.
"Regulatory Problem" means any set of facts or circumstance
wherein it has been asserted by any governmental regulatory agency (or a
Regulated Shareholder reasonably believes that there is a risk of such
assertion) that such Regulated Shareholder is not entitled to acquire, own, hold
or control or exercise any significant right (including the right to vote) with
respect to, any Securities of the Company or any subsidiary of the Company.
"Securities" means, with respect to any Person, such Person's
"securities" as defined in Section 2(l) of the Securities Act of 1933, as
amended, and includes such Person's capital stock or other equity interests or
any options, warrants or other securities that are directly or indirectly
convertible into, or exercisable or exchangeable for, such Person's capital
stock or other equity or equity-linked interests, including phantom stock and
stock appreciation rights. Whenever a reference herein to Securities is
referring to any derivative Securities, the rights of a Shareholder shall apply
to such derivative Securities and all underlying Securities directly or
indirectly issuable upon conversion, exchange or exercise of such derivative
securities.
4.2 Regulatory Matters Generally.
If a Regulated Shareholder determines that it has a Regulatory
Problem, the Company agrees to take all such actions, subject to Applicable Law,
as are reasonably requested by such Regulated Shareholder (i) to effectuate and
facilitate any transfer by such Regulated Shareholder of any Securities of the
Company then held by such Regulated Shareholder to any Person designated by such
Regulated Shareholder (in which event such Regulated Shareholder shall have no
obligation to
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comply with the provisions of Section 2 hereof), (ii) to permit such Regulated
Shareholder (or any Affiliate of such Regulated Shareholder) to exchange all or
any portion of the voting Securities then held by such Person on a
share-for-share basis for shares of a class of non-voting Securities of the
Company, which non-voting Securities shall be identical in all respects to such
voting Securities, except that such new Securities shall be non-voting and shall
be convertible into voting Securities on such terms as are requested by such
Regulated Shareholder in light of regulatory considerations then prevailing, and
(iii) to continue and preserve the respective allocation of the voting interests
with respect to the Company provided for in the Series C Preferred Stock
Purchase Agreement and all exhibits thereto and with respect to such Regulated
Shareholder's ownership of the Company's voting Securities. Such actions may
include, without limitation, (a) entering into such additional agreements as are
reasonably requested by such Regulated Shareholder to permit any Person(s)
designated by such Regulated Shareholder to exercise any voting power which is
relinquished by such Regulated Shareholder upon any exchange of voting
Securities for non-voting Securities of the Company, and (b) entering into such
additional agreements, adopting such amendments to the charter documents of the
Company and taking such additional actions as are reasonably requested by such
Regulated Shareholder in order to effectuate the intent of the foregoing.
If a Regulated Shareholder has the right or opportunity to
acquire any of the Company's Securities from the Company, any shareholder or any
other Person (as the result of a preemptive offer, pro rata offer or otherwise),
at such Regulated Shareholder's request the Company will offer to sell (or if
the Company is not the seller, to cooperate with the seller and such Regulated
Shareholder to permit such seller to sell) such non-voting Securities on the
same terms as would have existed had such Regulated Shareholder acquired the
Securities so offered and immediately requested their exchange for non-voting
Securities pursuant to clause (2) above.
Each Investor agrees to cooperate with the Company in complying
with this Section 4.2, including without limitation, voting to approve amending
the Company's Articles of Incorporation in a manner reasonably requested by the
Regulated Shareholder requesting such amendment.
The Company agrees not to amend or waive the voting or other
provisions of this Agreement or the Company's Articles of Incorporation if such
amendment or waiver would cause any Regulated Shareholder to have a Regulatory
Problem, provided that any such Regulated Shareholder notifies the Company that
it would have a Regulatory Problem promptly after it has notice of such
amendment or waiver.
If the exercise by a Regulated Shareholder of any right
hereunder shall, in the reasonable judgment of such Regulated Shareholder, cause
a Regulatory Problem, such Regulatory Shareholder may, upon notice to the
Company, relinquish such right at any time.
5. Termination of Prior Rights Agreements. The Prior Rights Agreement is
hereby terminated and superseded by this Agreement. This termination is
effective upon the execution of this Agreement by Investors who are holders of a
majority of the Registrable Securities under the Prior Rights Agreement.
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6. Waiver of Right of First Offer. To the extent that an Investor under
the Prior Rights Agreement is not purchasing its pro rata share of Series D
Preferred Stock sold pursuant to the Series D Agreement, all rights under the
Right of First Offer set forth in Section 2 of the Prior Rights Agreement to
purchase such securities is hereby waived. This waiver is effective upon the
execution of this Agreement by the holders of the majority of the Registrable
Securities under the Prior Rights Agreement.
7. Miscellaneous Provisions.
7.1 Waivers and Amendments. 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 50% of the shares of Registrable Securities then outstanding. In no
event shall any term of this Agreement be amended whereby such amendment would
adversely impact BT Investment Partners, Inc., without the prior written consent
of BT Investment Partners, Inc. In no event shall any term of this Agreement be
amended whereby such amendment would adversely impact the rights of the holders
of Series D Preferred Stock without the prior written consent of the holders of
at least 50% of the Series D Preferred Stock. Any amendment or waiver effected
in accordance with this Section 7.1 shall be binding upon each person or entity
which are granted certain rights under this Agreement and the Company.
7.2 Notices. Any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively given (i)
upon personal delivery to the party notified, (ii) when sent by confirmed telex
or facsimile if sent during normal business hours of the recipient, if not, then
on the next business day, (iii) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, or (iv) five (5)
days after being deposited in the United States mail, postage prepaid, and
addressed to each holder of record at his address appearing on the books of the
corporation.
7.3 Descriptive Headings. The descriptive headings herein have
been inserted for convenience only and shall not be deemed to limit or otherwise
affect the construction of any provisions hereof.
7.4 Governing Law. This Agreement shall be governed by and
interpreted under the laws of the State of California as applied to agreements
among California residents, made and to be performed entirely within the State
of California.
7.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument, but only one of which
need be produced. If shares of Series D Preferred Stock are sold to Investors
subsequent to the date of this Agreement, such Investors may become parties to
this Agreement by delivering a counterpart signature page to the Company.
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7.6 Expenses. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
7.7 Successors and Assigns. Except as otherwise expressly
provided in this Agreement, this Agreement shall benefit and bind the
successors, assigns, heirs, executors and administrators of the parties to this
Agreement.
7.8 Entire Agreement; Superseding Prior Rights Agreement. This
Agreement constitutes the entire agreement among the parties hereto with respect
to the specific subject matter hereof. Without in any manner limiting the
foregoing, the parties hereto agree that this Agreement supersedes and replaces
the Prior Rights Agreement, and that the Prior Rights Agreement shall hereafter
have no further force or effect.
7.9 Separability; Severability. Unless expressly provided in
this Agreement, the rights of each Investor under this Agreement are several
rights, not rights jointly held with any other Investors. Any invalidity,
illegality or limitation on the enforceability of this Agreement with respect to
any Investor shall not affect the validity, legality or enforceability of this
Agreement with respect to the other Investors. If any provision of this
Agreement is judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not be
affected or impaired.
7.10 Stock Splits.All references to numbers of shares or prices
per share in this Agreement shall be appropriately adjusted to reflect any stock
dividend, split, combination or other recapitalization of shares by the Company
occurring after the date of this Agreement.
7.11 Public Announcements Neither the Company nor any Investor
(other than Intel Corporation) shall use Intel Corporation's or its affiliates'
names or refer to Intel Corporation or its affiliates directly or indirectly in
connection with Intel Corporation's or its affiliates' relationship with the
Company in any advertisement, news release or professional or trade publication
or in any other manner, unless otherwise required by law or with Intel
Corporation's prior written consent, which consent will generally not be
granted. The parties agree that there will be no press release or other public
statement issued by any party relating to this Agreement or the transactions
contemplated hereby unless required by law or mutually agreed to, and further
agree to keep the terms and conditions of this Agreement (including its
existence) and the Schedule hereto in the strictest confidence, it being
understood that this restriction shall not prohibit disclosure to the parties'
counsel, accountants and professional advisors. If the Company determines that
it is required by law to disclose the terms and conditions of this Agreement or
the Exhibits hereto or to file this Agreement or the Schedule with the
Securities and Exchange Commission, it shall, a reasonable time before making
such disclosure or filing, consult with Intel Corporation regarding such a
filing and seek confidential treatment for such portions of those agreements as
may be reasonably requested by Intel Corporation. Notwithstanding the above, the
Company may disclose the existence of this Agreement to bona fide potential
investors who are under obligations of non-disclosure similar to those contained
herein and which the Company believes in good faith are seriously considering
investing in the Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first set forth above.
COMPANY:
DIGITALTHINK, INC.
By: /s/ XXXXX XXXXXXXX
---------------------------------
Title: President & CEO
---------------------------------
NEW INVESTORS:
/s/ XXXX XXXXXXX
---------------------------------
Xxxx Xxxxxxx
/s/ XXXX XXXXX
---------------------------------
Xxxx Xxxxx
DHM ARCADIA PARTNERS, L.P.
By: /s/ [signature illegible]
------------------------------
Title: Partner
---------------------------
GE CAPITAL EQUITY INVESTMENTS, INC.
By:
------------------------------
Title:
---------------------------
/s/ XXXXXX X. XXXXXXXX
---------------------------------
Xxxxxx X. Xxxxxxxx, Trustee of The Xxxxxx
X. Xxxxxxxx and Xxxxxx X. Xxxxxxxx
Revocable Trust U/A 8/5/98
21
XXXXXXXXX & XXXXX EMPLOYEE
VENTURE FUND, XX XX
By: H&Q Venture Management LLC
Its: General Partner
By:
------------------------------
Title:
---------------------------
/s/ XXXX XXXX
---------------------------------
Xxxx Xxxx
The Xxxxxx Family Trust
By: /s/ XXXXXXX X. XXXXXX
------------------------------
Title:
---------------------------
---------------------------------
Xxx XxXxxxx
---------------------------------
Xxxxx Xxxxxx
/s/ XXXX XXXX
---------------------------------
Xxxx Xxxx
Xxxxxx Xxxxxx Xxxxxxx and Xxxxxxx Xxxxx
Xxxxxxx, Trustees of the Xxxxxx Xxxxxx
Xxxxxxx, III and Xxxxxxx Xxxxx Xxxxxxx
Trust U/D/T dated June 26, 1980 as amended
By: /s/ [signature illegible]
------------------------------
Title: Member
---------------------------
QUAD CAPITAL PARTNERS, LLC
By:
------------------------------
Title:
---------------------------
22
/s/ XXXXX XXXXX
---------------------------------
Xxxxx Xxxxx
XXXXX HEALTHCARE CORPORATION
By:
------------------------------
Xxxx Xxxxxxxx
Title: Vice President Corporate Strategy & Ventures
TORSTAR CORPORATION
By: /s/ XXXXX XXXXXXXXX
------------------------------
Title: General Counsel
---------------------------
WORLDVIEW TECHNOLOGY PARTNERS II, L.P.
By: Worldview Capital II, L.P., its General Partner
Title: Worldview Equity I, L.L.C., its General Partner
By: /s/ XXXXXXX XXXXX
------------------------------
Xxxxxxx Xxxxx - Member
WORLDVIEW TECHNOLOGY INTERNATIONAL II, L.P.
By: Worldview Capital II, L.P., its General Partner
Title: Worldview Equity I, L.L.C., its General Partner
By: /s/ XXXXXXX XXXXX
------------------------------
Xxxxxxx Xxxxx - Member
WORLDVIEW STRATEGIC PARTNERS II, L.P.
By: Worldview Capital II, L.P., its General Partner
Title: Worldview Equity I, L.L.C., its General Partner
By: /s/ XXXXXXX XXXXX
------------------------------
Xxxxxxx Xxxxx - Member
23
XXXXXX EDB PARTNERS II, L.P.
By: Xxxxxx Management, L.P.
By: /s/ LIP-BU-TAN
-----------------------
Lip-Bu Tan
Title: General Partner
/s/ XXXXX XXXXXX
---------------------------------
Xxxxx Xxxxxx
EXISTING INVESTORS:
---------------------------------
Xxxxxx Xxxxxxx
ADOBE VENTURES I, L.P.
By: its General Partner,
H&Q Adobe Ventures Management L.L.C.
By: /s/ XXXXXX XXXXXXXXXXXX
------------------------------
Xxxxxx Xxxxxxxxxxxx
Title: Attorney-in-Fact
BISON GROUP LLC
By: /s/ [signature illegible]
------------------------------
Title: Managing Member
---------------------------
BT INVESTMENT PARTNERS, INC.
By:
------------------------------
Title:
---------------------------
CAMBRIDGE TECHNOLOGY CAPITAL FUND I, L.P.
24
By: /s/ XXXXX XXXXXXXXX
------------------------------
Title: Managing Director
---------------------------
/s/ XXXXX XXXXXXXX III
---------------------------------
Xxxxx Xxxxxxxx III
/s/ XXXXX X. XXXXXXXX
---------------------------------
Xxxxx X. Xxxxxxxx
/s/ XXXXX XXXXXXXX
---------------------------------
Xxxxx Xxxxxxxx
H&Q DIGITAL THINK INVESTORS, L.P.
By: /s/ XXXXXX XXXXXXXXXXXX
------------------------------
Title: Attorney-in-Fact
---------------------------
INTEL CORPORATION
By:
------------------------------
Title:
---------------------------
/s/ XXXXXXX XXXX
---------------------------------
Xxxxxxx & Xxxxxxxx Xxxx
/s/ XXXXXXX XXXX
---------------------------------
Xxxxxxx X. Xxxx & Xxxxxxxx Xxxx Trust DTD December
26, 1995
---------------------------------
Xxxxxx Xxxxxxxxx
---------------------------------
Xxxx Xxxxxxxxx
---------------------------------
Xxxxxx Xxxxxxxxx
25
/s/ XXXXX X. XXXXXX
---------------------------------
Xxxxx Xxxxx Xxxxxx
---------------------------------
Xxxxxxxx Xxxx Xxxxxx
---------------------------------
Xxxxx Xxxxxxx Xxxxxx
/s/ XXXXXXX X. XXXXXX
---------------------------------
Xxxxxxx X. Xxxxxx TTEE of the Survivor Trust of the
Xxx & Xxxx Xxxxxx Family Trust
MDLC PARTNERS, a California
Limited Partnership
By: /s/ XXXX X. XXXXXX
------------------------------
Title: General Partner
---------------------------
---------------------------------
Xxxxxx Xxxxxxxxx Milletti
---------------------------------
Xxxxxxx Xxxxxxxx
/s/ XXX XXXXXXXXX
---------------------------------
Xxx Xxxxxxxxx
---------------------------------
Xxxx Xxxxxxx
---------------------------------
Xxx Xxxx
---------------------------------
Xxxxxxxxx X. Xxxxxx
26
/s/ XXXXX XXXXXX
---------------------------------
Xxxxx X. Xxxxxx
SERVICE MASTER VENTURE FUND L.L.C.
By: /s/ [signature illegible]
------------------------------
Title: Director
---------------------------
/s/ XXXXXX XXXXXXX
---------------------------------
Xxxxxx Xxxxxxx
---------------------------------
Xxxxxx X. St. Geme Co-Trustee of the St. Geme
Living Trust
---------------------------------
Xxxxx Xxxxx St. Geme
TI VENTURES, L.P.
By: its General Partner,
H&Q TI Ventures Management L.L.C.
By: /s/ XXXXXX XXXXXXXXXXXX
------------------------------
Xxxxxx Xxxxxxxxxxxx
Title: Attorney-in-Fact
TORSTAR CORPORATION
By: /s/ XXXXX XXXXXXXXX
------------------------------
Title: General Counsel
---------------------------
/s/ XXXXXX XXXXXX
---------------------------------
Xxxxxx Xxx Xxxxxx
XXXXXX-SBIC, L.P.
By: /s/ XXXXXX XXXXX
------------------------------
Xxxxxx Xxxxx
27
Title: General Partner
XXXXXX TECHNOLOGY VENTURES II, L.P.
By: Xxxxxx Technology Partners, L.P.
By: /s/ XXXXXX XXXXX
----------------------
Xxxxxx Xxxxx
Title: General Partner
XXXXXX EDB PARTNERS, L.P.
By: Xxxxxx Management, L.P.
By: /s/ LIP-BU TAN
----------------------
Lip-Bu Tan
Title: General Partner
XXXXXX MEDIA INFORMATION TECHNOLOGY, L.P.
By: /s/ XXXXXX XXXXXXXX
------------------------------
Title: Manager
---------------------------
/s/ XXX XXXXXX
---------------------------------
Xxx Xxxxxx
/s/ XXXX XXXXXX
---------------------------------
Xxxx Xxxxxx
WS INVESTMENTS
By: /s/ XXXXX XXXXXX
------------------------------
Title:
---------------------------
---------------------------------
Xxxxxxx X. Xxxx
/s/ XXXXXX X. XXXX
---------------------------------
Xxxxxx X. Xxxx
28
Xxxxxx X. Xxxx
29
SCHEDULE A
LIST OF INVESTORS
Number of Number of Number of Number of Number of
Series A Series B Series C Series C-1 Series D
Name Shares Shares Shares Shares Shares
---- ------ ------ ------ ------ ------
Xxxxxx Xxxxxxx 10,000 10,000 -0- -0- -0-
Adobe Ventures, L.P. 666,666 1,333,334 777,778 -0- 307,692
Xxxx Xxxxxxx -0- -0- -0- -0- 3,846
Bison Group, LLC 100,000 100,000 200,000 -0- -0-
Xxxx X. Xxxxx -0- -0- -0- -0- -0-
Xxx Xxxx -0- -0- -0- -0- -0-
BT Investment Partners -0- -0- 1,120,000 213,334 -0-
Wiley X. Xxxxxxxx III 50,000 33,333 -0- -0- -0-
Cambridge Technology Capital Fund I, L.P. -0- -0- 666,667 -0- 76,923
Xxxxxxx Xxxxxx -0- -0- 80,000 -0- -0-
Xxxx Xxxxx -0- -0- -0- -0- 15,385
DHM Arcadia Partners, L.P. -0- -0- -0- -0- 11,538
GE Capital Equity Investments, Inc. -0- -0- -0- -0- 769,231
Xxxx Xxxxxxxx 30,000 -0- -0- -0- -0-
Xxxxx X. Xxxxxxxx 20,000 -0- -0- -0- -0-
Xxxxxx X. Xxxxxxxx, Trustee of The Xxxxxx -0- -0- -0- -0- 15,385
X. Xxxxxxxx and Xxxxxx X. Xxxxxxxx
Revocable Trust U/A 8/5/98
H & Q Digital Think Investors, L.P. 666,667 1,333,334 598,748 -0- 261,432
Xxxxxxxxx & Xxxxx Employee Venture Fund, -0- -0- -0- -0- 12,799
XX XX
Intel Corporation -0- 1,333,334 -0- -0- -0-
Xxxxxxx & Xxxxxxxx Xxxx Trust DTD December
26, 1995 50,000 20,000 -0- -0- 3,077
Xxxx Xxxx -0- -0- -0- -0- 7,692
30
Number of Number of Number of Number of Number of
Series A Series B Series C Series C-1 Series D
Name Shares Shares Shares Shares Shares
---- ------ ------ ------ ------ ------
-0- -0- -0- -0- 15,385
The Xxxxxx Family Trust
Xxxxxx Xxxxxxxxx 70,000 20,000 -0- -0- -0-
Xxxx Xxxxxxxxx 70,000 20,000 -0- -0- -0-
Xxxxxx Xxxxxxxxx 70,000 20,000 -0- -0- -0-
Xxxxx Xxxxx Xxxxxx 5,000 -0- -0- -0- -0-
Xxxxxxxx Xxxx Xxxxxx 10,000 -0- -0- -0- -0-
Xxxxx Xxxxxxx Xxxxxx 5,000 -0- -0- -0- -0-
Xxxxxxx X. Xxxxxx TTEE of the Survivor 10,000 20,000 -0- -0- -0-
Trust of the Xxx & Xxxx Xxxxxx Family
Trust Dated May 20, 1985
Xxx XxXxxxx -0- -0- -0- -0- 7,692
MDLC Partners, a California Limited 150,000 50,000 -0- -0- -0-
Partnership
Xxx Xxxxxxxxx -0- -0- 36,667 -0- 15,385
Xxxxxx Xxxxxxxxx Milletti 30,000 -0- -0- -0- -0-
Xxxxxxx Xxxxxxxx 30,000 -0- -0- -0- -0-
Xxxx Xxxxxxx 14,000 -0- -0- -0- -0-
Xxx Xxxx 10,000 -0- -0- -0- -0-
Xxxxx Xxxxxx -0- -0- -0- -0- 3,846
Xxxx Xxxx -0- -0- -0- -0- 15,385
Xxxxxxxxx X. Xxxxxx 20,000 -0- -0- -0- -0-
Xxxxxx Xxxxxx Xxxxxxx and Xxxxxxx Xxxxx
Xxxxxxx, Trustees of the Xxxxxx Xxxxxx -0- -0- -0- -0- 7,692
Xxxxxxx, III and Xxxxxxx Xxxxx Xxxxxxx
Trust U/D/T dated June 26, 1980 as amended
Quad Capital Partners, LLC -0- -0- -0- -0- 3,846
Xxxxx X. Xxxxxx 3,000 -0- -0- -0- -0-
Xxxxx Xxxxx -0- -0- -0- -0- 4,615
31
Number of Number of Number of Number of Number of
Series A Series B Series C Series C-1 Series D
Name Shares Shares Shares Shares Shares
---- ------ ------ ------ ------ ------
-0- -0- 666,667 -0- -0-
Service Master Venture Fund L.L.C
Xxxxxx Xxxxxxx 20,000 -0- -0- -0- -0-
Xxxxxx X. St. Geme Co-Trustee of the St -0- 66,666 -0- -0- -0-
Geme Living Trust
Xxxxx Xxxxx Xx. Xxxx 000,000 -0- -0- -0- -0-
Xxxxx Healthcare Corporation -0- -0- -0- -0- 307,693
TI Ventures, LP 666,667 1,333,334 777,778 -0- 307,692
Torstar Corporation -0- -0- 2,000,000 -0- 76,923
Xxxxxx Xxx Xxxxxx 80,000 33,333 -0- -0- -0-
Xxxxxx EDB Partners, L.P. -0- 200,000 20,000 -0- -0-
Xxxxxx EDB Partners II, L.P. -0- -0- -0- -0- 17,600
Xxxxxx-SBIC, L.P. -0- 666,667 66,660 -0- 32,400
Xxxxxx Media Information Technology, L.P. -0- 1,000,000 400,000 -0- 150,000
Xxxxxx Technology Ventures II, L.P. -0- 133,333 13,340 -0- -0-
Xxx Xxxxxx -0- -0- 266,668 -0- -0-
Xxxx Xxxxxx 20,000 -0- -0- -0- -0-
Worldview Technology Partners II, L.P. -0- -0- -0- -0- 1,140,809
Worldview Technology International II, L.P. -0- -0- -0- -0- 349,227
Worldview Strategic Partners II, L.P. -0- -0- -0- -0- 48,426
WS Investments 27,000 -0- -0- -0- -0-
Xxxxx Xxxxxx -0- -0- -0- -0- 10,000
Xxxxxxx X. Xxxx 00,000 -0- -0- -0- -0-
Xxxxxx X. Xxxx 30,000 -0- -0- -0- -0-
TOTAL 3,184,000 7,726,668 7,690,973 213,334
