EXHIBIT 4.2
VASTERA, INC.
THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
This THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
(the "Agreement") is entered into as of the ____ day of August, 2000, by and
among the following parties: Vastera, Inc., a Delaware corporation (the
"COMPANY"); Ford Motor Company ("FORD"), TCV IV, L.P. and TCV IV Strategic
Partners, L.P. (together the "NEW INVESTORS") and those entities designated on
the signature pages hereof and SCHEDULE I hereto as "ORIGINAL PARTIES" (Ford,
the New Investors and the Original Parties collectively the "INVESTORS") and any
entity that may become a party hereto as an "INVESTOR" by executing a
counterpart hereof.
WHEREAS, the Company and the Original Parties have previously
executed that certain Second Amended and Restated Investors' Rights Agreement
dated as of November 24, 1998, (the "Second Amended and Restated Investors'
Rights Agreement") in connection with the investment in the Company made by the
Original Parties, which agreement was subsequently amended by Amendment No. 1
dated February 26, 1999 and Amendment No. 2 dated February 4, 2000, each of
which permitted subsequent investors in the Company to become parties to the
Second Amended and Restated Investor's Rights Agreement;
WHEREAS, concurrently with the execution of this Agreement the
Company and Ford are entering into a strategic relationship whereby Ford is
transferring certain assets to the Company and receiving shares of Common Stock
in the Company (the "Ford Stock") pursuant to a Stock Transfer Agreement dated
July 14, 2000 between Ford and the Company;
WHEREAS, in connection with the issuance by the Company to
Ford of the Ford Stock, the Company, the Original Parties and Ford desire that
Ford become a party to this Agreement;
WHEREAS, prior to the date hereof, FedEx Corporation has
entered into a certain Stock and Warrant Purchase Agreement to sell shares of
the Company's Series D Preferred Stock and a warrant to purchase shares of the
Company's Series D-1 Convertible Preferred Stock to the New Investors; and
WHEREAS, the Company, the Original Parties and the New
Investors desire that the New Investors be granted registration and other rights
with respect to such shares of Series D Preferred Stock, Series D-1 Convertible
Preferred Stock and Ford Stock having the same terms and conditions as the
registration and other rights granted to the existing holders of Series D
Preferred Stock and Series D-1 Convertible Preferred Stock.
NOW, THEREFORE, in consideration of the premises and the
mutual promises, representations, warranties, covenants and conditions set forth
in this Agreement, the Second Amended and Restated Investors' Rights Agreement
is hereby amended and restated in its entirety as follows:
1
SECTION 1 GENERAL
1.1 Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"COMMON STOCK" means the Common Stock of the Company, $0.01
par value share.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FORM S-3" means such form under the Securities Act as in
effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the SEC that permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"HOLDER" means any person of record owning Shares or
Registrable Securities that have not been sold to the public or any assignee of
record of such Registrable Securities in accordance with Section 2.11 hereof.
"INITIAL OFFERING" means the date of the closing of the first
sale to the public of Common Stock for the account of the Company in a firm
commitment underwritten offering pursuant to a registration statement filed
with, and declared effective by, the Securities and Exchange Commission under
the Securities Act in which (a) the price per share is at least $14.80 (subject
to adjustments for any stock dividends, combinations, splits, recapitalizations
and the like) and (b) the net proceeds to the Company (after Selling Expenses)
are greater than $15,000,000.
"OPTION(S)" mean the options to purchase shares of Series B
Convertible Preferred Stock held by Battery Ventures III, L. P., the options to
purchase shares of Series C-1 Convertible Preferred Stock held by certain of the
Investors, the Warrants to purchase shares of Series D-1 Convertible Preferred
Stock held by certain of the Investors; and certain bridge warrants held by
Battery Ventures III, L.P. and Lighthouse Capital Partners, II, L.P., each
issued August 7, 1997.
"PRIOR HOLDERS" means collectively the Original Parties and
the New Investors.
"REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.
"REGISTRABLE SECURITIES" means (a) Common Stock issued or
issuable upon conversion of the Shares, including, without limitation, Common
Stock issued upon conversion of any Shares issued upon exercise of any of the
Options, (b) the Ford Stock and (c) any Common Stock 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 above-described securities. Notwithstanding anything
to the contrary contained in the foregoing, Registrable Securities shall not
include any securities that are (i) sold pursuant to a registration statement or
Rule 144 under the Securities Act, or (ii) sold
2
in any manner to a person or entity that, by virtue of the provisions of this
Agreement, is not entitled to the rights provided by this Agreement.
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number
of shares of Common Stock that are both Registrable Securities and either (a)
then issued and outstanding or (b) then issuable upon the conversion, exchange
or exercise of any then outstanding securities that are convertible into,
exercisable for or exchangeable for shares of Common Stock.
"REGISTRATION EXPENSES" mean all expenses incurred by the
Company in complying with Sections 2.2, 2.3 and 2.4 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, reasonable fees and disbursements of a
single special counsel for the Holders, blue sky fees and expenses and the
expense of any special audits or comfort letters incident to or required by any
such registration (but excluding the compensation of regular employees of the
Company which shall be paid in any event by the Company).
"RELATED AGREEMENTS" mean the Preferred Stock Purchase
Agreement and the related Option Agreement, both dated as of July 31, 1996, the
Series C and Series D Preferred Stock Purchase Agreement dated as of August 7,
1997, as amended, the Series D Convertible Preferred Stock and Warrant Purchase
Agreement dated as of November 24, 1998, as amended, the Series E Convertible
Preferred Stock Purchase Agreement dated as of February 4, 2000, the Stock
Issuance Agreement dated as of the date hereof and the Second Amended and
Restated Right of First Refusal and Co-Sale Agreement dated as of November 24,
1998, as amended, (the "Restated Co-Sale Agreement").
"SEC" or "COMMISSION" means the United States Securities and
Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933 as amended.
"SELLING EXPENSES" means all underwriting discounts and
selling commissions and fees applicable to the sale.
"SERIES A CONVERTIBLE PREFERRED STOCK" means the Company's
Series A Convertible Preferred Stock, par value $0.01 per share.
"SERIES B CONVERTIBLE PREFERRED STOCK" means the Company's
Series B Convertible Preferred Stock, par value $0.01 per share.
"SERIES C CONVERTIBLE PREFERRED STOCK" means the Company's
Series C Convertible Preferred Stock, par value $0.01 per share.
"SERIES C-1 CONVERTIBLE PREFERRED STOCK" means the Company's
Series C-1 Convertible Preferred Stock, par value $0.01 per share.
"SERIES D CONVERTIBLE PREFERRED STOCK" means the Company's
Series D Convertible Preferred Stock, par value $0.01 per share.
3
"SERIES D-1 CONVERTIBLE PREFERRED STOCK" means the Company's
Series D-1 Convertible Preferred Stock, par value $0.01 per share.
"SERIES E CONVERTIBLE PREFERRED STOCK" means the Company's
Series E Convertible Preferred Stock, par value $0.01 per share.
"SHARES" mean shares of any of the Company's Series A
Convertible Preferred Stock, shares of the Company's Series B Convertible
Preferred Stock, shares of the Company's Series C Convertible Preferred stock,
shares of the Company's Series C-1 Convertible Preferred Stock, shares of the
Company's Series D Convertible Preferred Stock, shares of the Company's Series
D-1 Convertible Preferred Stock and shares of the Company's Series E Convertible
Preferred Stock.
SECTION 2 REGISTRATION; RESTRICTIONS ON TRANSFER.
2.1 Restrictions on Transfer.
(a) Each Holder agrees not to make any disposition of all
or any portion of the Shares or Registrable Securities unless and until:
(i) There is then in effect a registration
statement under the Securities Act covering such proposed disposition and such
disposition is made in accordance with such registration statement; or
(ii)(A) The transferee has agreed in writing to be
bound by this Section 2.1, (B) such Holder shall have notified the Company of
the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (C) if
such disposition is being effected other than pursuant to Rule 144 and if
reasonably requested by the Company, such Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the
Securities Act.
Notwithstanding the provisions of paragraphs (i) and (ii)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer which does not require registration under the Securities Act by a
Holder which is (A) a partnership to its partners or former partners in
accordance with their interests in such partnership, (B) a corporation to its
shareholders in accordance with their interests in the corporation, (C) a
limited liability company to its members or former members in accordance with
their interests in the limited liability company, (D) to the Holder's family
members or into a trust for the benefit of such persons; provided in each case
the transferee will be subject to the terms of this Section 2.1 to the same
extent as if he were an original Holder hereunder, or (E) pursuant to Rule 144
of the Securities Act.
(b) In addition to any legend required under applicable
state securities laws or as provided elsewhere in this Agreement, each
certificate representing Shares or Registrable Securities shall (unless
otherwise permitted by the provisions of this Agreement) be stamped or otherwise
imprinted with a legend substantially similar to the following:
4
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT, UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT
SUCH REGISTRATION IS NOT REQUIRED OR SUCH SALE IS EFFECTED PURSUANT TO
RULE 144.
(c) The Company shall be obligated to reissue promptly
unlegended certificates at the request of any holder thereof if the
holder shall have obtained an opinion of counsel (which counsel may be
counsel to the Company) reasonably acceptable to the Company to the
effect that the securities proposed to be disposed of may lawfully be
so disposed of without registration, qualification or legend; provided
however, any legend required to remain by any other agreement shall not
be removed.
(d) Any legend endorsed on an instrument pursuant to
applicable state securities laws and the stop-transfer instructions
with respect to such securities shall be removed upon receipt by the
Company of an order from the appropriate blue sky authority authorizing
such removal.
2.2 Demand Registration.
(a) Subject to the conditions of this Section 2.2, if the
Company receives a written request from the holders of at least 50% of the
shares of Common Stock originally issued to Ford (the "Initiating Ford Holders")
that the Company file a registration statement, on Form S-1, under the
Securities Act covering the registration of such number shares of Registrable
Securities anticipated to have an aggregate offering price of not less than
$5,000,000, then within thirty (30) days of the receipt thereof, the Company
shall give written notice of such request all holders of the shares of Common
Stock originally issued to Ford (the "Ford Holders"), and subject to the
limitations of this Section 2.2, the Company shall use its best efforts to
effect, the registration under the Securities Act of all Registrable Securities
that the Ford Holders request to be registered as soon as practicable.
(b) If the Initiating Ford 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 2.2 and with respect to requests made by the Initiating Ford Holders the
Company shall include such information in the written notice referred to in
Section 2.2(a). In such event, the right of any Ford Holder to include its
Registrable Securities in such registration shall be conditioned upon such Ford
Holder's participation in such underwriting and the inclusion of such Ford
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Ford Holders and such Ford
Holder) to the extent provided herein. All Ford Holders proposing to distribute
their securities through such underwriting shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such underwriting by a majority of the Initiating Ford Holders (which
underwriter or underwriters shall be reasonably acceptable to the Company).
Notwithstanding any other provision of this Section 2.2, if the underwriter
advises
5
the Company that marketing forces require a limitation of the number of
securities to be underwritten, then the Company shall advise all Ford Holders of
Registrable Securities which would otherwise be underwritten pursuant hereto
that the number of shares that may be included in the underwriting shall be
allocated to the Ford Holders of such Registrable Securities on a pro rata basis
based on the number of Registrable Securities requested by each such Ford
Holder, and the Ford Holders to be included in the registration (including the
Initiating Ford Holders). Any Registrable Securities excluded or withdrawn from
such underwriting shall be withdrawn from the registration.
(c) Subject to the conditions of this Section 2.2, if the
Company receives a written request from the Prior Holders of 40% of the Shares
(or any Common Stock issued upon conversion thereof) (the "Initiating Holders")
that the Company file a registration statement, on Form S-1, under the
Securities Act covering the registration of at least 25% of the aggregate
Registrable Securities held by the Prior Holders or such number of shares of
Registrable Securities anticipated to have an aggregate offering price of not
less than $10,000,000, then within thirty (30) days of the receipt thereof, the
Company shall give written notice of such request to all Prior Holders, and
subject to the limitations of this Section 2.2, the Company shall use its best
efforts to effect the registration under the Securities Act of all Registrable
Securities that the Prior Holders request to be registered as soon as
practicable.
(d) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as part of their request made pursuant to this
Section 2.2 and with respect to requests made by the Initiating Holders the
Company shall include such information in the written notice referred to in
Sections 2.2(c). In such event, the right of any Prior Holder to include its
Registrable Securities in such registration shall be conditioned upon such Prior
Holder's participation in such underwriting and the inclusion of such Prior
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Prior
Holder) to the extent provided herein. All Prior Holders proposing to distribute
their securities through such underwriting shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such underwriting by a majority of the Initiating Holders (which underwriter or
underwriters shall be reasonably acceptable to the Company). Notwithstanding any
other provision of this Section 2.2, if the underwriter advises the Company that
marketing forces require a limitation of the number of securities to be
underwritten, then the Company shall advise all Prior Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto that the number
of shares that may be included in the underwriting shall be allocated to the
Prior Holders of such Registrable Securities on a pro rata basis based on the
number of Registrable Securities requested by each such Prior Holder, and the
Prior Holders to be included in the registration (including the Initiating
Holders). Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.
(e) The Company shall not be required to effect a
registration pursuant to Section 2.2:
(i) with respect to Section 2.2(a) after the
Company has effected two (2) registrations pursuant to Section 2.2(a) and other
than in accordance with the exceptions set
6
forth in Section 2.6 such registrations have been declared or ordered effective
or withdrawn by the Ford Holders, and with respect to Section 2.2(c) after the
Company has effected two (2) registrations pursuant to Section 2.2(c), and such
registrations have been declared or ordered effective or withdrawn by the Prior
Holders;
(ii) during the period starting with the date of
filing of, and ending on the date ninety (90) days following the effective date
of, any registration statement on Form S-1;
(iii) if within thirty (30) days of receipt of a
written request from the Initiating Ford Holders pursuant to Section 2.2(a) or
the Initiating Holders pursuant to Section 2.2(c), as the case may be, the
Company gives notice to the Ford Holders or the Prior Holders of the Company's
intention to make its Initial Offering within ninety (90) days;
(iv) if (A) at the time the Company receives a
request for registration in accordance with Sections 2.2(a) or (c) the Company
shall then be engaged in any material transaction (such as, by way of example
only, negotiating a merger, acquisition, joint-venture or introduction of a
major new product) the disclosure of which in a Registration Statement, in the
reasonable judgment of a majority of the Board of Directors, exercised in good
faith, would be adverse to the Company's best interests, or (B) if the Company
shall furnish to the Ford Holders requesting a registration pursuant to Section
2.2(a) or the Prior Holders requesting a registration pursuant to Section
2.2(c), as the case may be, a certificate signed by a majority of the Board of
Directors stating that in the Board of Director's reasonable judgment, exercised
in good faith, the Company's earnings or the occurrence of some other material
event are not at such time appropriate for disclosure, or, that it would be
seriously detrimental to the Company and its stockholders for such registration
statement to be effected at such time, then, in either of such events, the
Company shall have the right to defer such filing for a period of not more than
ninety (90) days after receipt of the request of the Initiating Ford Holders or
the Initiating Holders; provided that such rights to delay a request shall be
exercised by the Company in the aggregate not more than once in any twelve (12)
month period; or
(v) prior to the earlier to occur of (a) one
year from the date hereof or (b) six months after the Closing of the Initial
Offering.
2.3 Piggyback Registration.
(a) The Company shall notify all Holders in writing at
least ninety (90) days prior to the filing of any registration statement under
the Securities Act for purposes of a public offering of securities of the
Company (including, but not limited to, registration statements relating to
secondary offerings of securities of the Company, but excluding registration
statements relating to employee benefit plans or with respect to corporate
reorganizations or other transactions under Rule 145 of the Securities Act) and
will afford an opportunity to include in such registration statement all or part
of such Registrable Securities held by such Holder. Each Holder desiring to
include in any such registration statement all or any part of the Registrable
Securities held by it shall, within fifteen (15) days after the above-described
notice from the Company, so notify the Company in writing. Such notice shall
state the intended method of disposition of the Registrable Securities by such
Holder. If a Holder decides not to include all of its Registrable Securities in
any registration statement thereafter filed by the
7
Company, such Holder shall nevertheless continue to have the right to include
any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth herein.
(b) If the registration statement under which the Company
gives notice under this Section 2.3 is for an underwritten offering, the Company
shall so advise the Holders of Registrable Securities. In such event, the right
of any such Holder to be included in a registration pursuant to this Section 2.3
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities (and, if applicable, any and all other selling shareholders who may
be permitted to register shares) through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of the Agreement to the contrary, if the underwriter determines in
good faith that marketing factors require a limitation of the number of shares
to be underwritten, the number of shares that may be included in the
underwriting shall be allocated: (A) if such registration is initiated by the
Company with respect to the issuance and sale of new shares by the Company then,
first, to the Company; second, to the Holders on a PRO RATA basis based on the
total number of Registrable Securities requested by each Holder to be
registered; third, to any stockholder of the Company (other than a Holder) on a
PRO RATA basis and (B) if such registration is initiated by any person other
than the Company, then first to the person initiating such registration; second,
to the Company; third, to the Holders on a PRO RATA basis based on the total
number of Registrable Securities requested by each Holder to be registered. No
such reduction shall reduce the securities being offered by the initiating
persons to be included in the registration and underwriting; PROVIDED, HOWEVER,
that in no event shall the amount of securities of the selling Holders included
in the registration be reduced below thirty percent (30%) of the total amount of
securities included in such registration, unless such offering is the Initial
Offering and such registration does not include shares of any other selling
stockholders, in which event any or all of the Registrable Securities of the
Holders may be excluded in accordance with the immediately preceding sentence.
In no event shall shares of any other selling stockholder be included in such
registration which would reduce the number of shares which may be included by
Holders without the written consent of Holders of not less than two-thirds of
the Registrable Securities proposed to be sold in the offering.
(c) Right to Terminate Registration. The Company shall have
the right to terminate or withdraw any registration initiated by it under this
Section 2.3 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 2.6 hereof.
2.4 Form S-3 Registration
In case the Company shall receive from (i) any Holder or
Holders of (A) a majority of the Registrable Securities relating to the
Company's Series A Convertible Preferred Stock (the "Series A Registrable
Securities"), (B) a majority of the Registrable Securities relating to the
Company's Series C Convertible Preferred Stock (the "Series C Registrable
Securities"),
9
(C) a majority of the Registrable Securities relating to the Company's Series D
Convertible Preferred Stock (the "Series D Registrable Securities"), (D) a
majority of the Registrable Securities relating to the Company's Series E
Convertible Preferred Stock (the "Series E Registrable Securities") or (ii) the
Ford Holders holding in interest a majority of the Registrable Securities
relating to the Company's Common Stock originally issued to Ford (the "Ford
Registrable Securities") (such Holders under (i) and (ii) being referred to as
the "Initiating S-3 Holders") a written request or requests that the Company
effect a registration on Form S-3 (or any successor to Form S-3) or any similar
short-form registration statement 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 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 with fifteen (15) days after receipt of such written notice from the
Company; provided, however, that the Company shall not be obligated to effect
any such registration, qualification or compliance pursuant to this Section 2.4:
(i) if Form S-3 (or any successor or similar
form) is not available for such offering by the Holder;
(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 $500,000;
(iii) if (A) at the time the Company receives a
request for registration in accordance with this Section 2.4 the Company shall
then be engaged in any material transaction (such as, by way of example only,
negotiating a merger, acquisition, joint-venture or introduction of a major new
product) the disclosure of which in a Registration Statement, in the reasonable
judgment of a majority of the Board of Directors, exercised in good faith, would
be adverse to the Company's best interests, or (B) if the Company shall furnish
to the Holders requesting a registration pursuant to this Section 2.4 a
certificate signed by a majority of the Board of Directors of the Company
stating in the Board of Directors' reasonable judgment, exercised in good faith,
the Company's earnings or the occurrence of some other material event are not at
such time appropriate for disclosure, or that it would be seriously detrimental
to the Company and its stockholders for such Form S-3 Registration to be
effected at such time, then, in either of such events, the Company shall have
the right to defer the filing of the Form S-3 registration statement for a
period of not more than ninety (90) days after receipt of the request of the
Holder or Holders under this Section 2.4; provided that such rights to delay a
request shall be exercised by the Company in the aggregate not more than once in
any twelve (12) month period; or
9
(iv) 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 will file a
Form S-3 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.
2.5 IPO Allocation.
In the event of a bona fide, underwritten initial public
offering of the capital stock of the Company (the "IPO"), the Company shall use
commercially reasonable efforts to require that the managing underwriters of the
IPO establish a directed share program (the "PROGRAM") in connection with the
IPO. The Program shall consist of that number of shares of capital stock (the
"PROGRAM SHARES") determined by dividing $3,000,000 by the initial price to the
public set forth on the cover page of the final prospectus distributed in
connection with the IPO (the "IPO PRICE"), provided that, if necessary to
complete the IPO, the number of Program Shares may be reduced to the maximum
number permitted under the rules and requirements of the NASD. The Company shall
cause the managing underwriters (subject to the consent of the underwriters) to
give priority to the holders of the Company's Series C Convertible Preferred
Stock (or Common Stock issuable upon conversion thereof) (the "SERIES C
HOLDERS"), PRO RATA in accordance with their relative holdings of Series C
Convertible Preferred Stock (or Common Stock issued upon conversion thereof)
with respect to the Program Shares in allocating the shares available for
purchase in the Program. The Series C Holders, PRO RATA as aforesaid, shall have
the option, but not the obligation, to purchase all or any portion of the
Program Shares at the IPO Price. Notwithstanding the foregoing, in no event
shall the Investors designated on the signature pages hereto as the "TCV
Investors" have the rights under this Section 2.5 with respect to less than such
number of Program Shares that, when multiplied by the IPO Price, equals
$1,500,000, (such product being referred to as the "Program Value"), and if the
Program Value shall be less than $1,500,000 then the TCV Investors shall have
the rights under this Section 2.5 with respect to all of the Program Shares (the
number of Program Shares as to which the TCV Investors are to have the rights
under this Section 2.5 in accordance with this sentence are referred to as the
"TCV Minimum Shares"). If, in order to give effect to the operation of the
preceding sentence, the Investors other than the TCV Investors obtain rights
under this Section 2.5 with respect to less than their respective PRO rata share
of the Program Shares, then (i) such other Investors shall have the rights under
this Section 2.5 with respect to all of the Program Shares other than the TCV
Minimum Shares, if there shall be any Program Shares in addition to the TCV
Minimum Shares, and (ii) such other Investors shall share such rights PRO RATA
in accordance with their relative holdings of Series C Convertible Preferred
Stock (or Common Stock issued upon the conversion thereof.
2.6 Expenses of Registration.
Except as specifically provided herein, all Registration
Expenses incurred in connection with any registration, qualification or
compliance pursuant to Section 2.2 or any registration under Section 2.3 or
Section 2.4 herein shall be borne by the Company. All Selling Expenses incurred
in connection with any registrations hereunder shall be borne by the holders
10
of the securities so registered pro rata on the basis of the number of shares so
registered. The Company shall not, however, be required to pay for expenses of
any registration proceeding begun pursuant to Section 2.2 or 2.4, the request of
which has been subsequently withdrawn by the Initiating Ford Holders, with
respect only to a request made pursuant to Section 2.2(a), the Initiating
Holders or the Initiating S-3 Holders, as the case may be, unless (a) the
withdrawal is based upon material adverse information concerning the Company of
which the Initiating Ford Holders, the Initiating Holders or the Initiating S-3
Holders, as the case may be were not aware at the time of such request, (b) the
Ford Holders agree to forfeit its right to one requested registration pursuant
to Section 2.2(a) or (c) the Prior Holders of a majority of Registrable
Securities agree to forfeit their right to one requested registration pursuant
to Section 2.2(c), in which event such right shall be forfeited by all Prior
Holders. If the Holders are required to pay the Registration Expenses, such
expenses shall be borne by the holders of securities (including Registrable
Securities) requesting such registration in proportion to the number of shares
for which registration was requested. If the Company is required to pay the
Registration Expenses of withdrawn offering pursuant to clause (a) above, then
the Holders shall not forfeit their rights pursuant to Section 2.2 or
Section 2.4 to a demand registration.
2.7 Obligations of the Company.
Whenever required 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 all reasonable
efforts to cause such registration statement to become effective, and upon the
request of Ford with respect to registrations pursuant to Section 2.2(a), the
Initiating Holders or the Initiating S-3 Holders, as the case may be, keep such
registration statement effective for up to one hundred and eighty (180) days or,
if earlier, until the Holder or Holders have completed the distribution related
thereto.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and 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 number of copies of the
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them.
(d) Use all reasonable efforts to register and qualify
the securities covered by such registration under such other securities laws and
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
11
underwriter(s) of such offering. Each Holder participating in such underwriting
shall also enter into and perform its obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered
by such registration statement that a prospectus relating thereto is required to
be delivered under the Securities Act of any event that would cause the
prospectus included in such registration statement, as then in effect, to
include an untrue statement of a material fact or to omit 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.
(g) Furnish, at the request of Ford with respect to
offerings made pursuant to Section 2.2(a), the Initiating Holders holding a
majority of the shares participating in the offering or the Initiating S-3
Holders holding a majority of the shares participating in the offering, as the
case may be, on the date that such Registrable Securities are delivered to the
underwriters for sale, 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 as of such date, from the counsel representing the Company
for the purposes of such registration, in the form and substance as is
customarily given to underwriters in an underwritten public offering and
reasonably satisfactory to a majority of the Holders requesting registration,
addressed to the underwriters, if any, and to the Holders requesting the
registration of their Registrable Securities and (ii) a letter dated as of 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 and reasonably
satisfactory to a majority of the Holders requesting registration, addressed to
the underwriters, if any, and if permitted by applicable accounting standards,
to the Holders requesting the registration of their Registrable Securities.
2.8 Termination of Registration Rights.
All registration rights granted to a Holder under this
Article II (other than under Section 2.3 with respect to underwritten offerings)
shall terminate and be of no further force and effect upon the earlier of
(i) the fifth anniversary of the consummation of the Initial Offering and
(ii) such date as all Registrable Securities held by and issuable to such Holder
may be sold in the manner described in Rule 144 during any ninety (90) day
period.
2.9 Delay of Registration; Furnishing Information.
(a) 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 2.
(b) It shall be a condition precedent to the obligations
of the Company to take any action pursuant to Sections 2.2, 2.3 or 2.4 that the
selling Holders 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 their Registrable Securities.
12
2.10 Indemnification.
In the event any Registrable Securities are included in a
registration statement under Sections 2.2, 2.3 or 2.4:
(a) To the extent permitted by law, the Company shall
indemnify and hold harmless each Holder, the partners, officers, directors and
legal counsel of each Holder, any underwriter (as defined in the Securities Act)
for such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Exchange Act, 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, 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") by the Company: (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospects or final
prospectus contained therein and any amendments or supplements thereto, (ii) the
omission or alleged omission to state a material fact required to be stated
therein, or necessary to make the statements therein not misleading, or (iii)
any violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities laws or any rule or regulation promulgated
under the Securities Act, the Exchange Act, any state securities laws in
connection with the offering covered by such registration statement; and the
Company shall reimburse each such Holder, partner, officer or director,
underwriter or controlling person on a current basis for any legal or other
expense 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 2.10(a) shall not apply
to amounts paid in settlement of any such loss, claims, 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 such Holder, partner, officer,
director, underwriter or controlling person of such Holder.
(b) To the extent permitted by law, each Holder shall, if
Registrable Securities held by such Holder are included in the securities as to
which such registration qualifications or compliance is being effected,
indemnify and hold harmless the Company, each of its directors, its officers,
and legal counsel and each person, if any, who controls the Company within the
meaning of the Securities Act, any underwriter and any other Holder selling
securities under such registration statement or any of such other Holder's
partners, directors or officer or any person who controls such Holder, against
any losses, claims, damages or liabilities (joint or several) to which the
Company or any such director, officer, controlling person, underwriter or other
such Holder, or partner, director, officer 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) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs due
to the Company's reliance upon written information furnished by such Holder
under an instrument duly executed by such Holder and stated to be specifically
for use in connection with such registration; and each such Holder shall
reimburse any legal or other expenses
13
reasonably incurred by the Company or any such director, officer, controlling
person, underwriter or other Holder, or partner, officer, director or
controlling person of such other Holder in connection with investigating or
defending any such loss, claim, damage, liability or action if it is judicially
determined that there was such a Violation; provided, however, that the
indemnity agreement contained in this Section 2.10(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; provided further, that in no event shall any
indemnity under this Section 2.10 exceed the net proceeds from the offering
received by such Holder.
(c) Promptly after receipt by an indemnified party under
this Section 2.10 of notice of the commencement of any action (including any
governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against any indemnifying party under this Section 2.10,
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 indemnifying party
similarly notified, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel and own separate local 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 materially
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
2.10 to the extent prejudiced, but the omission so to deliver written notice to
the indemnifying party will not relieve it of any liability that it may have to
any indemnified party otherwise than under this Section 2.10.
(d) If the indemnification provided for in this Section 2.10
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 net proceeds from the offering received by such
Holder.
(e) The obligations of the Company and Holders under this
Section 2.10 shall survive completion of any offering of Registrable Securities
in a registration statement and the
14
termination of this Agreement. No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of each indemnified party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party a release from all liability in respect to such claim
or litigation.
2.11 Assignment of Registration Rights.
The rights to cause the Company to register Registrable
Securities pursuant to this Article II may be assigned by a Holder to a
transferee or assignee of Shares or Registrable Securities, provided such
transferee or assignee (i) is a subsidiary, parent, general partner, limited
partner or retired partner of a Holder, (ii) is a Holder's family member or
trust for the benefit of an individual Holder, or (iii) acquires at least one
hundred thousand (100,000 Shares or Registrable Securities (as adjusted for
stock splits and combinations) and is not a competitor of the Company (as
reasonably determined by the Board of Directors); provided, however, (A) the
transferor shall, within ten (10) days after such transfer, furnish to the
Company 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 (B) such transferee shall agree to be subject to all restrictions
set forth in this Agreement and the Restated Co-Sale Agreement.
2.12 Amendment of Registration Rights.
Any provision of this Section 2 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
holders of a majority of the Series A Registrable Securities, voting or acting
separately as a class, a majority of the Series C Registrable Securities, voting
or acting separately as a class, and a majority of the Series D Registrable
Securities, voting or acting separately as a class, and a majority of the Series
E Registrable Securities, voting or acting separately as a class, and the Ford
Holders holding in interest a majority of the Ford Registrable Securities,
voting as a separate class, provided that all Holders are affected by such
amendment or waiver in a substantially similar fashion. If any amendment treats
any class of holders differently than any other class, the affected class must
approve or waive the amendment or modification by a majority vote of the
affected class. Any amendment or waiver effected in accordance with this Section
2.12 shall be binding upon each Holder and the Company. By acceptance of any
benefits under this Section 2, Holders hereby agree to be bound by the
provisions hereunder.
2.13 Limitation on Subsequent Registration Rights
After the date of this Agreement, the Company shall not,
without the prior written consent of the holders of a majority of the Series A
Registrable Securities, voting or acting separately as a class, a majority of
the Series C Registrable Securities, voting or acting separately as a class, a
majority of the Series D Registrable Securities, voting or acting separately as
a class, and a majority of the Series E Registrable Securities, voting or acting
separately as a class, and the Ford Holders holding in interest a majority of
the Ford Registrable Securities, voting as a separate class, enter into any
agreement with any holder or prospective holder of any securities
15
of the Company that would grant such holder any registration rights with respect
to such securities.
2.14 "Market Stand-Off" Agreement.
If requested by the Company or the representative of the
underwriters of the Common Stock (or other securities), each Holder and a
transferee of a Holder, regardless of whether such transferee has registration
rights hereunder, shall not sell or otherwise transfer or dispose of any
Registrable Securities held by such Holder (other than those included in the
registration) for a period specified by the representative of the underwriters
not to exceed one hundred eighty (180) days following the effective date of a
registration statement of the Company filed under the Securities Act, provided
that:
(a) such agreement shall apply only to the Initial
Offering;
(b) all officers and directors of the Company and holders
of at least one percent (1%) of the Company's voting securities enter into
similar agreement; and
(c) such agreement shall provide that any discretionary
waiver or termination of the restrictions of such agreements by the Company or
the representatives of the underwriters shall apply to all persons subject to
such agreements pro rata based on the number of Registrable Securities held.
The obligations described in this Section 2.14 shall not apply
to a registration relating solely to employee benefit plans on Form S-1 or Form
S-8 or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period.
2.15 Rule 144 Reporting.
With a view to making available to the Holders the benefits of
certain rules and regulations of the SEC which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to
use its best efforts to:
(a) Make and keep public information available, as those
terms are understood and defined in SEC Rule 144 or any similar or analogous
rule promulgated under the Securities Act, at all times that the Company is
subject to the reporting requirements of the Exchange Act, as amended;
(b) File with the SEC, in a timely manner, all reports
and other documents required of the Company under the Exchange Act; and
(c) So long as a Holder owns any Shares or Registrable
Securities, furnish to such Holder forthwith upon request a written statement by
the Company as to its compliance with the reporting requirements of said Rule
144 of the Securities Act, and of the Exchange Act (at any time after it has
become subject to such reporting requirements), a copy of the most
16
recent annual or quarterly report of the Company, and such other reports and
documents as a Holder may reasonably request in availing itself of any rule or
regulation of the SEC allowing it to sell any such securities without
registration.
SECTION 3 COVENANTS OF THE COMPANY.
3.1 Basic Financial Information and Reporting.
(a) The Company will maintain true books and records of
account in which full and correct entries will be made of all its business
transactions pursuant to a system of accounting established and administered in
accordance with generally accepted accounting principles consistently applied,
and will set aside on its books all such proper accruals and reserves as shall
be required under generally accepted accounting principles consistently applied.
In addition to the information described in Section 3.1(b), (c) and (d), the
Company shall provide in a timely manner any other information concerning the
Company and its business and affairs as any of the Investors may from time to
time reasonably request.
(b) As soon as practicable after the end of each fiscal
year of the Company and so long as any of the Shares are outstanding, and in any
event within one hundred twenty (12) days thereafter, the Company will furnish
to each Investor a consolidated balance sheet of the Company, as at the end of
such fiscal year, and an audited consolidated income statement and an audited
consolidated cash flow statement of the Company, for such year, all prepared in
accordance with generally accepted accounting principles consistently applied
and setting forth in each case in comparative form the figures from the previous
fiscal year, with an explanation of any material differences between them, all
in reasonable detail. Such financial statements shall be accompanied by a report
and opinion thereon by independent public accountants of national standing
selected by the Company's Board of Directors and a report by management with a
discussion of the Company's business, including any changes in the Company's
financial condition and any significant business developments.
(c) As long as any of the Shares are outstanding, the
Company will furnish each Investor, as soon as practicable after the end of the
first, second and third quarterly accounting periods in each fiscal year of the
Company, and in any event within forty-five (45) days thereafter, a consolidated
balance sheet of the Company as of the end of each such quarterly period, and a
consolidated income statement and a consolidated cash flow statement of the
Company for such period and for the current fiscal year to date, prepared in
accordance with generally accepted accounting principles, with the exception
that no notes need to be attached to such statements and year-end audit
adjustments may not have been made, and setting forth in each case in
comparative form the figures from the previous fiscal year, with an explanation
of any material differences between them. Such financial statements shall be
accompanied by a report by management with a discussion of the Company's
business, including any changes in the Company's financial condition and any
significant business developments.
(d) As long as any of the Shares are outstanding, the
Company will furnish each Investor (i) at least thirty (30) days prior to the
beginning of each fiscal year an annual budget and operating plans for such
fiscal year (and, as soon as available, any subsequent revisions thereto); and
(ii) as soon as practicable after the end of each month, and in any event
17
within thirty (30) days thereafter, a consolidated balance sheet of the Company
as of the end of each such month, and a consolidated income statement and a
consolidated cash flow statement of the Company for such month and for the
current fiscal year to date, including a comparison to plan figures for such
period, prepared in accordance with generally accepted accounting principles
consistently applied, with the exception that no notes need be attached to such
statements and year-end audit adjustments may have been made.
3.2 Inspection Rights.
Each Investor or its authorized representatives shall have the
right to visit and inspect any of the properties of the Company or any of its
subsidiaries, including its corporate and financial records, and to discuss the
affairs, finances and accounts of the Company or any of its subsidiaries with
its officers, and to review such information as it may reasonably request 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 Confidentiality of Records.
Each Investor agrees to use, and to use its diligent efforts
to ensure that its authorized representatives use, the same degree of care as
such Investor uses to protect its own confidential information to keep
confidential any information furnished to it which the Company identifies as
being confidential or proprietary (so long as such information is not in the
public domain), except that such Investor may disclose such proprietary or
confidential information to any partner, subsidiary or parent of such Investor
for the purpose of evaluating its investment in the Company as long as such
partner, subsidiary or parent agrees to be bound by the confidentiality
provisions of this Section 3.3. Notwithstanding the foregoing, each Investor
shall be free to distribute to its partners or shareholders summary information
describing the Company's performance.
3.4 Reservation of Common Stock.
The Company will at all times reserve and keep available,
solely for issuance and delivery upon the conversion of Shares, all Common Stock
issuable from time to time upon conversion of all the Shares.
3.5 Stock Vesting.
Unless otherwise approved by the Board of Directors, all stock
options and other stock equivalents issued after the date of this Agreement to
employees, directors, consultants and other service providers shall be subject
to vesting over a minimum of four year period and with respect to any shares of
stock purchased by any such person, the Company's repurchase option shall
provide that upon such person's termination of employment or service with the
Company, with or without cause, the Company or its assignee (to the extent
permissible under applicable securities laws and other laws) shall have the
option to purchase at cost any unvested shares of stock held by such person.
18
3.6 Termination of Covenants.
The provisions of 3.1, 3.2, 3.3 and 3.4 of this Agreement
shall expire, terminate and be of no further force of effect on the date the
Initial Offering is consummated.
SECTION 4 RIGHTS OF FIRST REFUSAL.
4.1 Subsequent Offerings.
The Prior Holders and the Ford Holders shall have a right of
first refusal to purchase their PRO RATA portion of the Equity Securities, as
defined below, that the Company may, from time to time, propose to sell and
issue after the date of this Agreement, other than the Equity Securities
excluded by Section 4.6 hereof. The term "Equity Securities" shall mean (i) any
Common Stock, Preferred Stock or other security of the Company (other than debt
securities which are not convertible into and do not carry rights to acquire any
capital stock of the Company), (ii) any security convertible, with or without
consideration, into any Common Stock, Preferred Stock or other security
(including any option to purchase such a convertible security), (iii) any
security carrying any warrant or right to subscribe to or purchase any Common
Stock, Preferred Stock or other security or (iv) any such warrant or right.
Notwithstanding anything to the contrary contained elsewhere in this subsection
4.1, Ford's initial pro-rata portion shall be deemed to be 27.5% of any such
issuance and Ford's rights under this subsection 4.1 shall be subject to the
terms of the Stock Transfer Agreement between the Company, Vastera Solution
Services Corporation and Ford dated July 14, 2000.
4.2 Exercise of Rights.
If the Company proposes to issue any Equity Securities, it
shall give the Prior Holders and the Ford Holders written notice of its
intention, describing the Equity Securities, the price and the terms and
conditions upon which the Company proposes to issue the same. The Prior Holders
and the Ford Holders shall have fifteen (15) days from the giving of such notice
to agree to purchase the Equity Securities for the price and upon the terms and
conditions specified in the notice by giving written notice to the Company and
stating therein the quantity of Equity Securities to be purchased.
Notwithstanding the foregoing, the Company shall not be required to offer or
sell such Equity Securities to any such Prior Holder or Ford Holder if it would
cause the Company to be in violation of applicable federal securities laws by
virtue of such offer or sale.
4.3 Issuance of Equity Securities to Other Persons.
If any Prior Holder or Ford Holder fails to exercise in full
the rights of first refusal, the Company shall have ninety (90) days thereafter
to sell the Equity Securities in respect of which the Prior Holder's rights or
Ford Holder's rights were not exercised, at a price and upon general terms and
conditions materially no more favorable to the purchasers thereof than specified
in the Company's notice to the Prior Holder or Ford Holder pursuant to Section
4.2 hereof. If the Company has not sold such Equity Securities within 90 days of
the notice provided pursuant to Section 4.2, the Company shall not thereafter
issue or sell such Equity Securities, without first offering such securities to
the Prior Holder or the Ford Holder in the manner provided above.
19
4.4 Termination of Rights of First Refusal.
The rights of first refusal established by this Section 4
shall terminate upon either (a) the date of the Initial Offering or (b) with
respect to Prior Holders holding Series A Convertible Preferred Stock or Series
B Convertible Preferred Stock, if fewer than 30% of the number of such Shares
that are outstanding (or in the case of Series B Convertible Preferred Stock,
that are issuable upon the exercise of an option therefor that is outstanding)
as of the date of this Agreement remain outstanding or (c) with respect to Prior
Holders holding Series C Convertible Preferred Stock or Series C-1 Convertible
Preferred Stock, if fewer than 20% of the number of such shares that are
outstanding (or, in the case of Series C-1 Convertible Preferred Stock, that are
issuable upon the exercise of options therefor that are outstanding) as of the
date of this Agreement remain outstanding or (d) with respect to Prior Holders
holding Series D Convertible Preferred Stock or Series D-1 Convertible Preferred
Stock, if fewer than 30% of the number of such shares that are outstanding (or,
in the case of Series D-1 Convertible Preferred Stock that are issuable upon the
exercise of Warrants therefor that are outstanding) as of the date of this
Agreement remain outstanding or (e) with respect to Prior Holders holding Series
E Convertible Preferred Stock, if fewer than 30% of the number of such shares
that are outstanding as of the date of this Agreement remain outstanding or (f)
with respect to Ford Holders holding shares of Common Stock originally issued to
Ford, if fewer than 30% of the number of such shares that are outstanding as of
the date of this Agreement remain outstanding.
4.5 Transfer of Rights of First Refusal.
The rights of first refusal of the Prior Holders and the Ford
Holders under this Section 4 may be transferred to the same parties, subject to
the same restrictions as any transfer of registration rights pursuant to Section
2.11.
4.6 Excluded Securities
The rights of first refusal established by this Section 4
shall have no application to any of the following Equity Securities:
(a) up to an aggregate amount of 5,500,000 shares of
Common Stock (and/or options, warrants or other Common Stock purchase rights
issued pursuant to such options, warrants or other rights) issued or to be
issued to employees, officers or directors of, or consultants or advisors to the
Company or any subsidiary, pursuant to stock purchase or stock option plans or
other similar arrangements that are approved by the Board of Directors.
(b) Stock issued pursuant to any rights or agreements
outstanding as of the date of this Agreement, options and warrants outstanding
as of the date of this Agreement, and stock issued pursuant to any such rights
or agreements granted after the date of this Agreement, provided that the rights
of first refusal established by this Article IV applied with respect to the
initial sale or grant by the Company of such rights or agreements;
(c) any Equity Securities issued for consideration other
than cash pursuant to a merger, consolidation, acquisition or similar business
combination;
20
(d) shares of Common stock issued in connection with any
stock split, stock dividend or recapitalization by the Company;
(e) shares of Common Stock issued upon conversion of the
Shares;
(f) any Equity Securities issued pursuant to a public
offering; or
(g) any Equity Securities issued by the Company to an
operating company with compatible or complimentary products to effect a
strategic alliance with that company which is anticipated to provide to the
Company a well-defined economic benefit, provided that in no event shall the
number of shares of such Equity Securities so issued exceed in the aggregate
fifteen percent (15%) of the number of shares of Equity Securities outstanding
at the time of such issuance.
SECTION 5 MISCELLANEOUS
5.1 Governing Law.
This Agreement shall be construed and governed in accordance
with, and the rights of the parties shall be governed by, the laws of the State
of Delaware (without giving effect to any conflicts or choice of law provisions
that would cause the application of the domestic substantive laws of any other
jurisdiction).
5.2 Survival.
The covenants and agreements made herein shall survive any
investigation made by any Holder and the closing of the transactions
contemplated hereby. All statements as to factual matters contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant hereto in connection with the transactions contemplated hereby shall be
deemed to be representations and warranties by the Company hereunder solely as
of the date of such certificate or instrument.
5.3 Successors and Assigns; Binding Nature.
Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors, and administrators of the parties hereto and shall
inure to the benefit of and be enforceable by each person who shall be a holder
of Registrable Securities from time to time; provided, however, that prior to
the receipt by the Company of adequate written notice of the transfer of any
Registrable Securities specifying the full name and address of the transferee,
the Company may deem and treat the person listed as the holder of such
Registrable Securities in its records as the absolute owner and holder thereof
for all purposes, including the payment of dividends or any redemption price.
5.4 Severability.
In case any provision of the Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
21
5.5 Amendment and Waiver.
(a) Except as otherwise expressly provided, this
Agreement may be amended or modified only upon the written consent of the
Company, the holders of a majority of the Series A Registrable Securities,
voting as a separate class, the holders of a majority of the Series C
Registrable Securities, voting as a separate class, the holders of two-thirds of
the Series D Registrable Securities, voting as a separate class, and the holders
of two-thirds of the Series E Registrable Securities, voting as a separate
class, and the Ford Holders holding in interest a majority of the Ford
Registrable Securities, voting as a separate class, provided in such case, that
all such Holders are affected by such amendment in a substantially similar
fashion.
(b) Except as otherwise expressly provided herein, the
obligations of the Company and the rights of the Holders under this Agreement
may be waived only with the written consent of the holders of at least a
majority of the Series A Registrable Securities , voting as a separate class,
the holders of a majority of the Series C Registrable Securities, voting as a
separate class, the holders of two-thirds of the Series D Registrable
Securities, voting as a separate class and the holders of two-thirds of the
Series E Registrable Securities, voting as a separate class, and the Ford
Holders holding in interest a majority of the Ford Registrable Securities,
voting as a separate class, provided in such case, that all such Holders are
affected by such waiver in a substantially similar fashion.
(c) Notwithstanding the foregoing, this Agreement may be
amended with only the written consent of the Company to include additional
purchasers of Shares as "Investors," "Holders" and parties hereto.
5.6 Delays or Omissions.
It is agreed that no delay or omission to exercise any right,
power, or remedy occurring to any Holder, upon any breach, default or
noncompliance of the Company under this Agreement shall impair any such right,
power or remedy, nor shall it be construed to be a waiver of any such breach,
default or noncompliance, or any acquiescence therein, or of any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character on any Holder's
part of any breach, default or noncompliance under the Agreement or any waiver
on such Holder's part of any provisions or conditions of this Agreement must be
in writing and shall be effective only to the extent specifically set forth in
such writing. All remedies, either under this Agreement, by law, or otherwise
afforded to Holders, shall be cumulative and not alternative.
5.7 Notices.
All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be 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) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery
with written verification of receipt. All communications shall be sent to the
party to be notified at the address as set forth on the
22
signature pages hereof or EXHIBIT A hereto or at such other address as such
party may designate by ten (10) days advance written notice to the other parties
hereto.
5.8 Attorneys' Fees.
In the event that any dispute among the parties to this
Agreement should result in litigation, 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.
5.9 Titles and Subtitles.
The titles of the sections and subsections of this Agreement
are for convenience of reference only and are not to be considered in construing
this Agreement.
5.10 Pronouns.
All pronouns contained herein and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the parties hereto may require.
5.11 Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
5.12 Entire Agreement.
(a) This Agreement, the Exhibits and Schedules hereto,
the Related Agreements and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and neither party shall be liable or
bound to the other party except as specifically set forth herein and therein.
(b) This Agreement amends, restates and supersedes in its
entirety the terms and conditions set forth in the Second Amended and Restated
Investors' Rights Agreement, dated as of November 24, 1998, as amended and such
agreement shall be of no further force or effect.
{SIGNATURES ON FOLLOWING PAGES.}
23
In witness Whereof, the parties hereto have executed this
Third Amended and Restated Investors' Rights Agreement as of the date set forth
in the first paragraph hereof.
VASTERA, INC.
By: /s/ ARJUN RISHI
----------------------------------------------
Arjun Rishi
President
FORD MOTOR COMPANY
By: /s/ FORD MOTOR COMPANY
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
24
{SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT}
NEW INVESTORS:
TCV IV, L.P.
By: /s/ TCV IV, L.P.
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
TCV IV STRATEGIC PARTNERS, L.P.
By: /s/ TCV IV STRATEGIC PARTNERS, L.P.
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
25
{SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT}
ORIGINAL PARTIES:
TCV II, V.O.F.
a Netherlands Antilles General Partnership
By: Technology Crossover Management II, L.L.C.
Its: Investment General Partner
By: /s/ XXXXX X. XXXXXX
----------------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------------
Title: Attorney-in-fact
--------------------------------------------
TECHNOLOGY CROSSOVER VENTURES II, L.P.
a Delaware Limited Partnership
By: Technology Crossover Management II, L.L.C.
Its: General Partner
By: /s/ XXXXX X. XXXXXX
----------------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------------
Title: Attorney-in-fact
--------------------------------------------
TCV II (Q), L.P.
a Delaware Limited Partnership
By: Technology Crossover Management II, L.L.C.
Its: General Partner
By: /s/ XXXXX X. XXXXXX
----------------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------------
Title: Attorney-in-fact
--------------------------------------------
TCV II STRATEGIC PARTNERS, L.P.
a Delaware Limited Partnership
By: Technology Crossover Management II, L.L.C.
Its: General Partner
By: /s/ XXXXX X. XXXXXX
----------------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------------
Title: Attorney-in-fact
--------------------------------------------
26
{SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT}
TECHNOLOGY CROSSOVER VENTURES II, C.V.
a Netherlands Antilles Limited Partnership
By: Technology Crossover Management II, L.L.C.
Its: Investment General Partner
By: /s/ XXXXX X. XXXXXX
----------------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------------
Title: Attorney-in-fact
--------------------------------------------
RRE INVESTORS, L.P.
By: /s/ XXXXXX XXXXXXX
----------------------------------------------
Name: Xxxxxx Xxxxxxx
--------------------------------------------
Title: General Partner
--------------------------------------------
RRE INVESTORS FUND, L.P.
By: /s/ XXXXXX XXXXXXX
----------------------------------------------
Name: Xxxxxx Xxxxxxx
--------------------------------------------
Title: General Partner
--------------------------------------------
MSD PORTFOLIO CAPITAL, L.P. PRIVATE NEW EQUITY
By: /s/ MSD PORTFOLIO CAPITAL, L.P.
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
RPKS INVESTMENTS, L.L.C.
By: /s/ RPKS INVESTMENTS, L.L.C.
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
27
{SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT}
TRIPLE XXXXXX INVESTMENTS, L.L.C.
By: /s/ TRIPLE XXXXXX INVESTMENTS, L.L.C.
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
TEACHERS INSURANCE AND ANNUITY ASSOCIATION
OF AMERICA
By: /s/ XXXXXX X. XXXXXX
----------------------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------------------
Title: Managing Director
--------------------------------------------
DEHLI & DUBLIN VENTURES, L.L.C.
By: /s/ X. XXXXXXXX
----------------------------------------------
Name: X. Xxxxxxxx
--------------------------------------------
Title:
--------------------------------------------
XXXXX X XXXXXXXX TRUST
By: /s/ XXXX XXXXXXXX
----------------------------------------------
Name: Xxxx Xxxxxxxx
--------------------------------------------
Title: Trustee
--------------------------------------------
VERTEX TECHNOLOGY FUND PTE, LTD.
By: /s/ VERTEX TECHNOLOGY FUND PTE, LTD.
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
BATTERY VENTURES III, L.P.
By: /s/ XXXXXX XXXXXXX
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
XXXXXXXX X. XXXXXX
/s/ XXXXXXXX X. XXXXXX
--------------------------------------------------
28
{SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT}
XXXXXX & XXXX REVOCABLE TRUST
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
REVOCABLE TRUST OF TADHY CANNIFFE AND
XXXXXXXXXX XXXXXXXX
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
XXXXXXXXX & XXXXX CALIFORNIA
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
29
{SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT}
H&Q EMPLOYEE VENTURE FUND 2000, L.P.
By: H&Q VENTURE MANAGEMENT , L.L.C.
Its: General Partner
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
ACCESS TECHNOLOGY PARTNERS, L.P.
By: ACCESS TECHNOLOGY MANAGEMENT, L.L.C.
Its: General Partner
By: H&Q VENTURE MANAGEMENT, L.L.C.
Its: Managing Member
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
ACCESS TECHNOLOGY PARTNERS BROKERS FUND, L.P.
By: H&Q VENTURE MANAGEMENT, L.L.C.
Its: General Partner
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
BT INVESTMENT PARTNERS, INC.
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
30
{SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT}
MARUBENI CORPORATION
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
MARUBENI AMERICA CORPORATION
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
31
{SIGNATURE PAGE TO THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT}
