EXHIBIT 4.2
PEOPLESUPPORT, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (this
"AGREEMENT") is made and entered into as of the 12th day of April, 2000, by and
among PEOPLESUPPORT, INC., a Delaware corporation (the "COMPANY"), and the
persons identified on Schedule A, Schedule B, Schedule C, and Schedule D
attached hereto (collectively, the "INVESTORS").
RECITALS
WHEREAS, the Company previously entered into that certain Investors'
Rights Agreement dated as of August 14, 1998 by and among the Company and the
parties named therein, which was superceded by that certain Amended and Restated
Investors' Rights Agreement dated May 14, 1999 by and among the parties named
therein, which was superceded by that certain Amended and Restated Investors'
Rights Agreement dated June 30, 1999 by and among the parties named therein,
which was superceded by that certain Amended and Restated Investors' Rights
Agreement dated November 19, 1999 by and among the parties named therein
(collectively, the "PRIOR RIGHTS AGREEMENT").
WHEREAS, the Company and the Investors named in Schedule D (the "SERIES
D INVESTORS") have entered into a Series D Preferred Stock Purchase Agreement
dated as of the date first written above pursuant to which the Company desires
to sell to such Series D Investors, and such Series D Investors desire to
purchase from the Company, shares of the Company's Series D Preferred Stock. A
condition to the Series D Investors' obligations under the Series D Agreement,
as defined below, is that the Company and the Investors enter into this
Agreement.
WHEREAS, the Company and the Investors named in Schedule A, Schedule B
and Schedule C desire to induce the Series D Investors to purchase shares of
Series D Preferred Stock pursuant to the Series D Agreement by agreeing to the
terms and conditions set forth herein.
WHEREAS, the Company and the Investors named in Schedule A, Schedule B
and Schedule C desire to amend and restate the Prior Rights Agreement in full as
set forth below, pursuant to Section 4.3 of the Prior Rights Agreement.
WHEREAS, the Prior Rights Agreement permits such an amendment provided
that (a) the Company and (b) holders of at least a majority of the Registrable
Securities (as such term is defined in the Prior Rights Agreement) approve such
amendment.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereto agree as follows:
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SECTION 1
Registration Rights
1.1 Certain Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:
(a) "ACCEL" shall mean Accel VII L.P., Accel Internet Fund III L.P.,
and Accel Investors '99 L.P.
(b) "BENCHMARK" shall mean Benchmark Capital Partners IV, L.P.
(c) "CLOSING" shall mean the date of the initial sale of shares of the
Company's Series D Preferred Stock.
(d) "COMMISSION" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
(e) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
(f) "HOLDER" shall mean any Investor who holds Registrable Securities
and any holder of Registrable Securities to whom the registration rights
conferred by this Agreement have been transferred in compliance with Section
1.11 hereof.
(g) "ICP" shall mean idealab! Capital Partners I-A, LP and idealab!
Capital Partners I-B, LP.
(h) "INITIATING HOLDERS" shall mean any Holder or Holders who in the
aggregate hold not less than fifty percent (50%) of the outstanding Registrable
Securities.
(i) "IPO" shall mean the effective date of the first registration
statement filed by the Company under the Securities Act covering an offering of
its Common Stock to the general public.
(j) "MAJOR INVESTORS" shall mean ICP, TMCT, Accel, Benchmark, Siebel
and Meritech.
(k) "MERITECH" shall mean Meritech Capital Partners L.P. and Meritech
Capital Affiliates L.P.
(1) "OTHER STOCKHOLDERS" shall mean persons other than Holders who, by
virtue of agreements with the Company, are entitled to include their securities
in certain registrations hereunder.
(m) "QUALIFIED PUBLIC OFFERING" shall mean the effective date of the
registration statement filed by the Company under the Securities Act covering an
offering of its Common Stock to the general public in which the aggregate
proceeds of such offering exceed $40 million
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at a price per share which exceeds $7.137 (as adjusted for stock dividends,
stock splits, recapitalizations and the like).
(n) "REGISTRABLE SECURITIES" shall mean (i) shares of Common Stock
issued or issuable pursuant to the conversion of the Shares sold pursuant to the
Series A Agreement, the Series B Agreement, the Series C Agreement, and the
Series D Agreement, (ii) shares of Common Stock issued or issuable pursuant to
the conversion of the Shares issued upon the exercise of warrants to purchase
Series B Preferred Stock of the Company (the "SERIES B WARRANTS") or upon the
exercise of the Strategic Warrants, and (iii) any Common Stock issued as a
dividend or other distribution with respect to or in exchange for or in
replacement of the shares referenced in (i) and (ii) above, provided, however,
that Registrable Securities shall not include any shares of Common Stock which
have previously been registered or which have been sold to the public.
(o) The terms "REGISTER," "REGISTERED" and "REGISTRATION" shall refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
(p) "REGISTRATION EXPENSES" shall mean all expenses incurred in
effecting any registration pursuant to this Agreement, including, without
limitation, all registration, qualification, and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, and expenses of any regular or special audits incident to or
required by any such registration, but shall not include Selling Expenses and
fees and disbursements of counsel for the Holders (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company).
(q) "RULE 144" shall mean Rule 144 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
(r) "RULE 145" shall mean Rule 145 as promulgated by the Commission
under the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
(s) "SECURITIES Act" shall mean the Securities Act of 1933, as amended,
or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
(t) "SELLING EXPENSES" shall mean all underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and fees
and disbursements of counsel for any Holder (other than the as set forth in
Section 1.4 below).
(u) "SERIES A AGREEMENT" shall mean the Series A Preferred Stock
Purchase Agreement dated as of August 14, 1998 between the Company and the
parties named therein.
(v) "SERIES B AGREEMENT" shall mean that certain Series B Preferred
Stock Purchase Agreement dated May 14, 1999 by and among the Company and the
parties named therein, as
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superceded by that certain Amended and Restated Series B Preferred Stock
Purchase Agreement dated June 28,1999 by and among the Company and the parties
named therein.
(w) "SERIES C AGREEMENT" shall mean that certain Series C Preferred
Stock Purchase Agreement dated November 19,1999 by and among the Company and the
parties named therein.
(x) "SERIES D AGREEMENT" shall mean that certain Series D Preferred
Stock Purchase Agreement dated as of the date hereof by and among the Company
and the parties named therein.
(y) "SHARES" shall mean the Company's Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock.
(z) "SIEBEL" shall mean Siebel Systems, Inc.
(aa) "STRATEGIC WARRANTS" shall mean those certain warrants to purchase
either Common Stock or Series D Preferred Stock issued in connection with
certain strategic, vendor or customer relationships and debt financings.
(bb) "TMCT" shall mean TMCT Ventures, L.P.
1.2 Demand Registration.
(a) Request for Registration. If the Company shall receive from
Initiating Holders at any time or times not earlier than six (6) months after
the effective date of the IPO, a written request that the Company effect any
registration with respect to all or a part of the Registrable Securities with
aggregate proceeds to the Company (after deduction for underwriter's discounts
and expenses related to the issuance) of greater than $5,000,000 the Company
will:
(i) promptly give written notice of the proposed registration
to all other Holders; and
(ii) as soon as practicable, use its best efforts to effect
such registration (including, without limitation, filing post-effective
amendments, appropriate qualifications under applicable blue sky or
other state securities laws, and appropriate compliance with the
Securities Act) and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as
are specified in such request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in such request
as are specified in a written request received by the Company within
twenty (20) days after such written notice from the Company is mailed
or delivered.
(b) Limitations. The Company shall not be obligated to effect, or to
take any action to effect, any such registration pursuant to this Section 1.2:
(i) In any particular jurisdiction in which the Company would
be required to execute a general consent to service of process in
effecting such registration,
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qualification, or compliance, unless the Company is already subject to
service in such jurisdiction and except as may be required by the
Securities Act;
(ii) After the Company has initiated two such registrations
pursuant to this Section 1.2(a) (counting for these purposes only (i)
registrations which have been declared or ordered effective and
pursuant to which the Holders are able to sell at least fifty percent
(50%) of the Registrable Securities sought to be included in such
registration and (ii) registrations which have been withdrawn by the
Holders as to which the Holders have not elected to bear the
Registration Expenses pursuant to Section 1.4 hereof and would, absent
such election, have been required to bear such expenses);
(iii) During the period starting with the date sixty (60) days
prior to the Company's good faith estimate of the date of filing of,
and ending on a date one hundred eighty (180) days (or in the case of a
second or any subsequent Company-initiated registered offering of the
Company's securities to the general public, ninety (90) days) after the
effective date of, a Company-initiated registration; provided that the
Company is actively employing in good faith all reasonable efforts to
cause such registration statement to become effective;
(iv) If the Initiating Holders propose to dispose of shares of
Registrable Securities which may be immediately registered on Form S-3
pursuant to a request made under Section 1.5 hereof;
(v) If the Initiating Holders do not request that such
offering be firmly underwritten by underwriters selected by the
Initiating Holders (subject to the consent of the Company, which
consent will not be unreasonably withheld); or
(vi) If the Company and the Initiating Holders are unable to
obtain the commitment of the underwriter described in clause (v) above
to firmly underwrite the offer.
(c) Deferral Right. Subject to the foregoing clauses (i) through (vi)
of Section l(b) above, the Company shall file a registration statement covering
the Registrable Securities so requested to be registered as soon as practicable
after receipt of the request or requests of the Initiating Holders; provided,
however, that if (i) in the good faith judgment of the Board of Directors of the
Company, such registration would be seriously detrimental to the Company and the
Board of Directors of the Company concludes, as a result, that it is essential
to defer the filing of such registration statement at such time, and (ii) the
Company shall furnish to such Holders a certificate signed by the President of
the Company stating that in the good faith judgment of the Board of Directors of
the Company, it would be seriously detrimental to the Company for such
registration statement to be filed in the near future and that it is, therefore,
essential to defer the filing of such registration statement, then the Company
shall have the right to defer such filing for the period during which such
disclosure would be seriously detrimental, provided that (except as provided in
Section l(b)(iii) above) the Company may not defer the filing for a period of
more than one hundred eighty (180) days after receipt of the request of the
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Initiating Holders and, provided further, that the Company shall not defer its
obligation in this manner more than once in any twelve (12) month period.
(d) Inclusion of Company Securities. The registration statement filed
pursuant to the request of the Initiating Holders may, subject to the provisions
of Sections 1.2(c) and 1.13 hereof, include other securities of the Company,
with respect to which registration rights have been granted; provided, however,
that in the event the Company includes securities being sold for the account of
the Company, such registration shall count as a registration pursuant to Section
1.3 and shall not count as a registration pursuant to this Section 1.2.
(e) Underwriting. The right of any Holder to registration pursuant to
Section 1.2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder with respect to such participation and
inclusion) to the extent provided herein. A Holder may elect to include in such
underwriting all or a part of the Registrable Securities he holds.
(f) Procedures. If other persons shall request inclusion in any
registration pursuant to Section 1.2, the Initiating Holders shall, on behalf of
all Holders, offer to include such securities in the underwriting and may
condition such offer on their acceptance of the further applicable provisions of
this Section 1 (including Section 1.12). The Company shall (together with all
Holders and other persons proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected for such underwriting
by a majority in interest of the Initiating Holders, which underwriters are
reasonably acceptable to the Company. Notwithstanding any other provision of
this Section 1.2, if the representative of the underwriters advises the
Initiating Holders in writing that marketing factors require a limitation on the
number of shares to be underwritten, the number of shares to be included in the
underwriting or registration shall be allocated as set forth in Section 1.13
hereof. If a person who has requested inclusion in such registration as provided
above does not agree to the terms of any such underwriting, such person shall be
excluded therefrom by written notice from the Company, the underwriter or the
Initiating Holders. The securities so excluded shall also be withdrawn from
registration. Any Registrable Securities or other securities excluded shall also
be withdrawn from such registration. If shares are so withdrawn from the
registration and if the number of shares to be included in such registration was
previously reduced as a result of marketing factors pursuant to this Section
1.2(f), then the Company shall offer to all Holders who have retained rights to
include securities in the registration the right to include additional
securities in the registration in an aggregate amount equal to the number of
shares so withdrawn, with such shares to be allocated among such Holders
requesting additional inclusion in accordance with Section 1.13.
1.3 Company Registration.
(a) If the Company shall determine to register any of its securities
either for its own account or the account of a security holder or holders
exercising their respective demand registration rights (other than pursuant to
Section 1.2 or 1.5 hereof), other than a registration relating solely to
employee benefit plans, or a registration relating solely to a Rule 145
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transaction, or a registration on any registration form that does not permit
secondary sales, the Company will:
(i) promptly give to each Holder written notice thereof; and
(ii) use its best efforts to include in such registration (and
any related qualification under blue sky laws or other compliance),
except as set forth in Section 1.3(b) below, and in any underwriting
involved therein, all the Registrable Securities specified in a written
request or requests, made by any Holder and received by the Company
within twenty (20) days after the written notice from the Company
described in clause (i) above is delivered by the Company. Such written
request may specify all or a part of a Holder's Registrable Securities.
(b) UNDERWRITING. If the registration of which the Company gives notice
is for a registered public offering involving an underwriting, the Company shall
so advise the Holders as a part of the written notice given pursuant to Section
1.3(a)(i). In such event, the right of any Holder to registration pursuant to
this Section 1.3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company and
the other holders of securities of the Company with registration rights to
participate therein distributing their securities through such underwriting)
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected by the Company.
(c) UNDERWRITERS CUTBACK. Notwithstanding any other provision of this
Section 1.3, if the representative of the underwriters advises the Company in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the representative may (subject to the limitations set forth
below) exclude all Registrable Securities from, or limit the number of
Registrable Securities to be included in, the registration and underwriting. If
the registration is the first Company-initiated registered offering of the
Company's securities to the general public, the Company may limit, to the extent
so advised by the underwriters, the amount of securities (including Registrable
Securities) to be included in the registration by the Company's stock holders
(including the Holders), or may exclude, to the extent so advised by the
underwriters, such underwritten securities entirely from such registration. If
such registration is the second or any subsequent Company-initiated registered
offering of the Company's securities to the general public, the Company may
limit, to the extent so advised by the underwriters, the amount of securities to
be included in the registration by the Company's stockholders (including the
Holders); provided, however, that the aggregate value of securities (including
Registrable Securities) to be included in such registration by the Company's
stockholders (including the Holders) may not be so reduced to less than twenty
percent (20%) of the total value of all securities included in such
registration. The Company shall so advise all holders of securities requesting
registration, and the number of shares of securities that are entitled to be
included in the registration and underwriting shall be allocated first to the
Company for securities being sold for its own account and thereafter as set
forth in Section 1.13. If any person does not agree to the terms of any such
underwriting, he shall be excluded therefrom by written notice from the Company
or the underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
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If shares are so withdrawn from the registration and if the number of
shares of Registrable Securities to be included in such registration was
previously reduced as a result of marketing factors, the Company shall then
offer to all persons who have retained the right to include securities in the
registration the right to include additional securities in the registration in
an aggregate amount equal to the number of shares so withdrawn, with such shares
to be allocated among the persons requesting additional inclusion in accordance
with Section 1.13 hereof.
1.4 Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to
Sections 1.2,1.3 and 1.5 hereof, and the reasonable fees and expenses of one
counsel for the selling stockholders (up to an aggregate of $15,000 per
registration) in the case of the first two registrations pursuant to Section 1.5
hereof, shall be borne by the Company; provided, however, that if the Holders
bear the Registration Expenses for any registration proceeding begun pursuant to
Section 1.2 and subsequently withdrawn by the Holders registering shares
therein, such registration proceeding shall not be counted as a requested
registration pursuant to Section 1.2 hereof, except in the event that such
withdrawal is based upon material adverse information relating to the Company
that is different from the information known or available (upon request from the
Company or otherwise) to the Holders requesting registration at the time of
their request for registration under Section 1.2, in which event such
registration shall not be treated as a counted registration for purposes of
Section 1.2 hereof, even though the Holders do not bear the Registration
Expenses for such registration. All Selling Expenses relating to securities so
registered shall be borne by the holders of such securities pro rata on the
basis of the number of shares of securities so registered on their behalf.
1.5 Registration on Form S-3.
(a) After its initial public offering, the Company shall use its best
efforts to qualify for registration on Form S-3 or any comparable or successor
form or forms. After the Company has qualified for the use of Form S-3, in
addition to the rights contained in the foregoing provisions of this Section 1,
the Holders of Registrable Securities shall have the right to request
registrations on Form S-3 (such requests shall be in writing and shall state the
number of shares of Registrable Securities to be disposed of and the intended
methods of disposition of such shares by such Holder or Holders); provided,
however, that the Company shall not be obligated to effect any such registration
if (i) 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) on Form S-3 at an aggregate price
to the public of less than $1,000,000, or (ii) in the event that the Company
shall furnish the certification described in para graph 1.2(c) (but subject to
the limitations set forth therein) or (iii) in a given twelve (12) month period,
after the Company has effected one (1) such registration in any such period, or
(iv) it is to be effected more than four (4) years after a Qualified Public
Offering.
(b) If a request complying with the requirements of Section 1.5(a)
hereof is delivered to the Company, the provisions of Sections 1.2(a)(i) and
(ii), 1.2(b) and Section 1.2(c) hereof shall apply to such registration. If the
registration is for an underwritten offering, the provisions of Sections 1.2(e)
and 1.2(f) hereof shall apply to such registration.
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1.6 Registration Procedures. In the case of each registration effected
by the Company pursuant to Section 1, the Company will keep each Holder advised
in writing as to the initiation of each registration and as to the completion
thereof. At its expense, the Company will use its best efforts to:
(a) Keep such registration effective for a period of one hundred twenty
(120) days or until the Holder or Holders have completed the distribution
described in the registration statement relating thereto, whichever first
occurs; provided, however, that (i) such one hundred twenty (120) day period
shall be extended for a period of time equal to the period the Holder refrains
from selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company; and (ii) in
the case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, such one hundred twenty
(120) day period shall be extended, if necessary, to keep the registration
statement effective until all such Registrable Securities are sold, provided
that Rule 415, or any successor rule under the Securities Act, permits an
offering on a continuous or delayed basis, and provided further that applicable
rules under the Securities Act governing the obligation to file a post-effective
amendment permit, in lieu of filing a post-effective amendment that (I) includes
any prospectus required by Section 10(a)(3) of the Securities Act or (II)
reflects facts or events representing a material or fundamental change in the
information set forth in the registration statement, the incorporation by
reference of information required to be included in (I) and (II) above to be
contained in periodic reports filed pursuant to Section 13 or 15(d) of the
Exchange Act in the registration statement;
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
(c) Furnish such number of prospectuses and other documents incident
thereto, including any amendment of or supplement to the prospectus, as a Holder
from time to time may reasonably request;
(d) Notify each seller of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and at the request of any such seller, prepare and
furnish to such seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing;
(e) Cause all such Registrable Securities registered pursuant hereunder
to be listed on each securities exchange on which similar securities issued by
the Company are then listed;
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(f) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such registration statement and a CUSIP number
for all such Registrable Securities, in each case not later than the effective
date of such registration; and
(g) In connection with any underwritten offering pursuant to a
registration statement filed pursuant to Section 1.2 hereof, the Company will
enter into an underwriting agreement reasonably necessary to effect the offer
and sale of Common Stock, provided such underwriting agreement contains
customary underwriting provisions and provided further that if the underwriter
so requests the underwriting agreement will contain customary contribution
provisions.
1.7 Indemnification.
(a) The Company will indemnify each Holder, each of its officers,
directors and partners, legal counsel, and accountants and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
with respect to which registration, qualification, or compliance has been
effected pursuant to this Section 1, and each underwriter, if any, and each
person who controls within the meaning of Section 15 of the Securities Act any
underwriter, against all expenses, claims, losses, damages, and liabilities (or
actions, proceedings, or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus, offering circular, or other document (including any
related registration statement, notification, or the like) incident to any such
registration, qualification, or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and will
reimburse each such Holder, each of its officers, directors, partners, legal
counsel, and accountants and each person controlling such Holder, each such
underwriter, and each person who controls any such underwriter, for any legal
and any other expenses reasonably incurred, as incurred, in connection with
investigating and defending or settling any such claim, loss, damage, liability,
or action, provided that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability, or expense arises out of or
is based on any untrue statement or omission based upon written information
furnished to the Company by such Holder or underwriter and stated to be
specifically for use therein. It is agreed that the indemnity agreement
contained in this Section 1.7(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 has not been
unreasonably withheld).
(b) Each Holder will, if Registrable Securities held by him are
included in the securities as to which such registration, qualification, or
compliance is being effected, indemnify the Company, each of its directors,
officers, partners, legal counsel, and accountants and each underwriter, if any,
of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, each other such Holder and Other Stockholder,
and each of their officers, directors, and partners, and each person controlling
such Holder or Other Stockholder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on
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any untrue statement (or alleged untrue statement) of a material fact contained
in any such registration statement, prospectus, offering circular, or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and such Holders, Other Stockholders,
directors, officers, partners, legal counsel, and accountants, persons,
underwriters, or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability, or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular, or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder and stated to be
specifically for use therein provided, however, that the obligations of such
Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld). Notwithstanding the foregoing, in no event shall
the liability of a Holder hereunder exceed the aggregate amount of proceeds
received by such Holder in the offering to which such registration statement
relates.
(c) Each party entitled to indemnification under this Section 1.7 (the
"INDEMNIFIED PARTY") shall give notice to the party required to provide
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 1, to the extent such
failure is not prejudicial. 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 that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 1.7 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage, or expense referred to therein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied
11
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. Notwithstanding the foregoing, in no event shall the
liability of a Holder hereunder exceed the aggregate amount of proceeds received
by such Holder in the offering to which such registration statement relates.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control.
1.8 Information by Holder. Each Holder of Registrable Securities shall
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification, or compliance referred to in this Section 1.
1.9 Limitations on Registration of Issues of Securities. From and after
the date of this Agreement, the Company shall not, without the prior written
consent of a majority in interest of the Holders, enter into any agreement with
any holder or prospective holder of any securities of the Company giving such
holder or prospective holder any registration rights the terms of which are more
favorable than the registration rights granted to the Holders hereunder.
1.10 Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission that may permit the sale of
the Restricted Securities to the public without registration, the Company agrees
to use its best efforts to:
(a) Make and keep public information regarding the Company available as
those terms are understood and defined in Rule 144 under the Securities Act, at
all times from and after ninety (90) days following the effective date of the
first registration under the Securities Act filed by the Company for an offering
of its securities to the general public;
(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
at any time after it has become subject to such reporting requirements;
(c) So long as a Holder owns any Restricted Securities, furnish to the
Holder forthwith upon written request a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 (at any time from and
after ninety (90) days following the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
so filed as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration.
1.11 Transfer or Assignment of Registration Rights. The rights to cause
the Company to register securities granted to a Holder by the Company under this
Section 1 may be transferred or assigned by a Holder only to a transferee or
assignee (a "QUALIFIED TRANSFEREE") who
12
acquires at least twenty-five percent (25%) of any Investor's initial
Registrable Securities (as presently constituted and subject to subsequent
adjustments for stock splits, stock dividends, reverse stock splits, and the
like), provided that the Company is given written notice at the time of or
within a reasonable time after such transfer or assignment, stating the name and
address of the Qualified Transferee and identifying the securities with respect
to which such registration rights are being transferred or assigned, and,
provided further, that the Qualified Transferee of such rights assumes the
obligations of such Holder under this Section 1.
1.12 "Market Stand-Off" Agreement. If requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, a Holder shall
not sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company held by such Holder (other than those included in the
registration) during the one hundred eighty (180) day period following the
effective date of a registration statement of the Company filed under the
Securities Act, provided that such agreement shall only apply to the first such
registration statement of the Company, including securities to be sold on its
behalf to the public in an underwritten offering. In any such offering, the
Company shall use its best efforts to ensure that each officer, director, and
holder of one percent (1%) or more of the outstanding shares of Common Stock of
the Company agrees to comply with the obligations described in this Section
1.12. Any discretionary waiver or termination by the underwriters and the
Company of the restrictions of this Section 1.12 or of any similar agreement
shall apply to all Investors, and the aggregate amount of securities with
respect to which such restrictions are waived or terminated shall be apportioned
among all such persons and the Investors in a pro-rata manner based on the
amount of securities subject to such agreements.
The obligations described in this Section 1.12 shall not apply to a
registration relating solely to employee benefit plans on Form S-l 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 (or securities) subject to
the foregoing restriction until the end of such one hundred eighty (180) day
period.
1.13 Allocation of Registration Opportunities. In any circumstance in
which all of the Registrable Securities and other shares of Common Stock of the
Company (including shares of Common Stock issued or issuable upon conversion of
shares of any currently unissued series of Preferred Stock of the Company) with
registration rights (the "Other Shares") requested to be included in a
registration on behalf of the Holders or other selling stockholders cannot be so
included as a result of limitations of the aggregate number of shares of
Registrable Securities and Other Shares that may be so included, the number of
shares of Registrable Securities and Other Shares that may be so included shall
be allocated, first, among the Holders requesting inclusion of Registrable
Securities pro rata on the basis of the number of shares of Registrable
Securities that would be held by such Holders, assuming conversion, and, second,
among the other selling stockholders requesting inclusion of Other Shares pro
rata on the basis of the number of Other Shares that would be held by such other
selling stockholders, assuming conversion; provided, however, so that such
allocation shall not operate to reduce the aggregate number of Registrable
Securities and Other Shares to be included in such registration, if any Holder
or other selling stockholder does not request inclusion of the maximum number of
shares of Registrable Securities and Other Shares allocated to him pursuant to
the above-described procedure, the
13
remaining portion of his allocation shall be reallocated among those requesting
Holders and other selling stockholders whose allocations did not satisfy their
requests pro rata on the basis of the number of shares of Registrable Securities
and Other Shares which would be held by such Holders and other selling
stockholders, assuming conversion, and this procedure shall be repeated until
all of the shares of Registrable Securities and Other Shares which may be
included in the registration on behalf of the Holders and other selling
stockholders have been so allocated. The Company shall not limit the number of
Registrable Securities to be included in a registration pursuant to this
Agreement in order to include shares held by stockholders with no registration
rights or to include founder's stock or any other shares of stock issued to
employees, officers, directors, or consultants pursuant to the Company's 1998
Incentive Stock Plan, or with respect to registrations under Sections 1.2 or 1.5
hereof, in order to include in such registration securities registered for the
Company's own account.
1.14 Delay of Registration. No Holder shall have any right to take any
action to restrain, enjoin, or otherwise delay any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Section 1.
1.15 Termination of Registration Rights. The right of any Holder to
request registration or inclusion in any registration pursuant to Section 1.2,
1.3 or 1.5 shall be suspended upon such date after the closing of the IPO as all
shares of Registrable Securities held or entitled to be held upon conversion by
such Holder may immediately be sold under Rule 144 during any ninety (90) day
period, and shall terminate in their entirety four (4) years after the closing
of the Qualified Public Offering.
SECTION 2
Covenants of the Company
2.1 Basic Financial Information.
(a) Subject to Section 2.1 (b) below, the Company will furnish the
following reports to each Holder:
(i) As soon as practicable after the end of each fiscal year
of the Company, and in any event within ninety (90) days thereafter, an
audited consolidated balance sheet of the Company and its subsidiaries,
if any, as at the end of such fiscal year, and audited consolidated
statements of income and cash flows of the Company and its
subsidiaries, if any, for such year, prepared in accordance with
generally accepted accounting principles consistently applied and
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail.
(ii) 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 and its subsidiaries, if any,
as of the end of each such quarterly period, and consolidated
statements of income and cash flows of the Company and its
14
subsidiaries for such period and for the current fiscal year to date,
prepared in accordance with generally accepted accounting principles
consistently applied and setting forth in comparative form the figures
for the corresponding periods of the previous fiscal year, all in
reasonable detail, except that such financial statements need not
contain the notes required by generally accepted accounting principles.
(iii) As soon as practicable before the beginning of each
fiscal year, and in any event no later than thirty (30) days prior to
each fiscal year, a plan of the Company's annual operating budget for
the approaching fiscal year.
(iv) To the extent available, monthly unaudited financial
statements (including income statements, balance sheets, cash flow
statements and summaries of bookings), annual and long-term budgets and
other customary information such as reports of adverse developments,
management letters, communications with stockholders, press releases
and registration statements.
(v) From the date the Company becomes subject to the reporting
requirements of the Exchange Act (which shall include any successor
federal statute), and in lieu of the financial information required
pursuant to Section 2.1 (a) hereof, copies of its annual reports on
Form 10-K and its quarterly reports on Form 10-Q.
(b) The rights of any Holder pursuant to Section 2.1 (a) above shall
terminate on the date such Holder owns less than thirty-three percent (33%) of
such Holder's initial Registrable Securities (as presently constituted and
subject to subsequent adjustments for stock splits, stock dividends, reverse
stock splits and the like).
2.2 Board of Directors. The Board of Directors of the Company shall
consist of seven (7) members and shall meet a minimum of eight (8) times per
year. Three (3) directors shall be nominated by the holders of Common Stock, one
(1) director shall be nominated by the holders of the Series A Preferred Stock,
two (2) directors shall be nominated by the holders of the Series B Preferred
Stock, and one (1) director shall be nominated by the holders of the Series C
Preferred Stock. The covenants set forth in this Section 2.2 shall terminate
upon the closing of a Qualified Public Offering or, with respect to the rights
hereunder of holders of the Series A Preferred Stock, Series B Preferred Stock
or Series C Preferred Stock, upon the prior conversion of all shares of such
Series into Common Stock.
2.3 Right of First Refusal. The Company hereby grants to each Major
Investor who owns any Shares or shares of Common Stock issued upon conversion of
such Shares the right of first refusal to purchase a pro rata share of New
Securities (as defined in this Section 2.3) which the Company may, from time to
time, propose to sell and issue. A Major Investor's pro rata share, for purposes
of this right of first refusal, is the ratio of the number of shares of Common
Stock owned by such Major Investor immediately following the effective date of
this Agreement and the closing of the Series D Agreement, assuming full
conversion of the Shares then owned by such Major Investor, to the total number
of shares of Common Stock outstanding immediately following the effective date
of this Agreement and the closing of the Series D Agreement, assuming full
conversion of the Shares and exercise of all outstanding rights, options and
15
warrants to acquire Common Stock of the Company. This right of first refusal
shall be subject to the following provisions:
(a) "NEW SECURITIES" shall mean any capital stock (including Common
Stock and/or Preferred Stock) of the Company whether now authorized or not, and
rights, options or warrants to purchase such capital stock, and securities of
any type whatsoever that are, or may become, convertible into capital stock;
provided that the term "New Securities" does not include (i) securities
purchased under the Series A Agreement, the Series B Agreement, the Series C
Agreement, and the Series D Agreement; (ii) securities issued upon conversion of
the Shares or exercise of the Series B Warrants or the Strategic Warrants; (iii)
securities issued pursuant to the acquisition of another business entity or
business segment of any such entity by the Company by merger, purchase of
substantially all the assets or other reorganization whereby the Company will
own more than fifty percent (50%) of the voting power of such business entity or
business segment of any such entity; (iv) any borrowings, direct or indirect,
from financial institutions or other persons by the Company, whether or not
presently authorized, including any type of loan or payment evidenced by any
type of debt instrument, provided such borrowings do not have any equity
features including warrants, options or other rights to purchase capital stock
and are not convertible into capital stock of the Company; (v) securities issued
to employees, consultants, officers or directors of the Company pursuant to any
stock option, stock purchase or stock bonus plan, agreement or arrangement
approved by the Board of Directors; (vi) securities issued to vendors or
customers or to other persons in similar commercial situations with the Company
if such issuance is approved by the Board of Directors and Meritech; (vii)
securities issued in connection with obtaining lease financing, whether issued
to a lessor, guarantor or other person; (viii) securities issued in a public
offering pursuant to a registration under the Securities Act; (ix) securities
issued in connection with any stock split, stock dividend or recapitalization of
the Company; and (x) any right, option or warrant to acquire any security
convertible into the securities excluded from the definition of New Securities
pursuant to subsections (i) through (ix) above.
(b) In the event the Company proposes to undertake an issuance of New
Securities, it shall give each Major Investor written notice of its intention,
describing the type of New Securities, and their price and the general terms
upon which the Company proposes to issue the same. Each Major Investor shall
have ten (10) days after any such notice is delivered to agree to purchase such
Major Investor's pro rata share of such New Securities for the price and upon
the terms specified in the notice by giving written notice to the Company and
stating therein the quantity of New Securities to be purchased.
(c) In the event that a Major Investor does not subscribe for the
entirety of its pro rata share of New Securities, the Company shall give each
Major Investor who subscribed for its full pro rata share of the New Securities
(the "SUBSCRIBING INVESTOR") written notice of the quantity of the remaining New
Securities available for reallocation among the Subscribing Investors and the
number of the remaining New Securities that are purchasable by each Subscribing
Investor participating in the reallocation. The reallocation of the remaining
New Securities shall take place at the same price and upon the same terms as
those stated in the initial notice of the Company's intention to issue the New
Securities. Each Subscribing Investor shall have five (5) days after such notice
is delivered to agree to purchase up to such Subscribing Investor's pro rata
share of the remaining New Securities. For the purposes of this reallocation,
pro rata share is to
16
be determined only amongst those Subscribing Investors participating in the
reallocation. The Company shall only be required to effect one (1) reallocation
of the remaining New Securities.
(d) In the event the Major Investors fail to exercise fully the right
of first refusal within such ten (10) day period, the Company shall have sixty
(60) days thereafter to sell or enter into an agreement (pursuant to which the
sale of New Securities covered thereby shall be closed, if at all, within one
hundred twenty (120) days from the date of such agreement) to sell the New
Securities respecting which the Major Investors' right of first refusal option
set forth in this Section 2.3 was not exercised, at a price and upon terms no
more favorable to the purchasers thereof than specified in the Company's notice
to Major Investors pursuant to Section 2.3(b). In the event the Company has not
sold within such one hundred twenty (120) day period or entered into an
agreement to sell the New Securities in accordance with the foregoing within one
hundred twenty (120) days from the date of such agreement, the Company shall not
thereafter issue or sell any New Securities, without first again offering such
securities to the Major Investors in the manner provided in Section 2.3(b)
above.
(e) The right of first refusal granted under this Agreement shall
expire upon, and shall not be applicable to, the first sale of Common Stock of
the Company pursuant to a Qualified Public Offering.
(f) The right of first refusal set forth in this Section 2.3 may not be
assigned or transferred, except that (i) such right is assignable by each Major
Investor to any wholly owned subsidiary or parent of, or to any corporation or
entity that is, within the meaning of the Securities Act, controlling,
controlled by or under common control with, any such Major Investor, and (ii)
such right is assignable between the Major Investors and any entities controlled
by such Major Investors.
2.4 Compensation Committee. The Company shall create and maintain a
Compensation Committee of the Board of Directors, a majority of the members of
which shall be outside directors of the Company, which shall, among other
duties, review and approve the annual compensation paid to the executive
officers of the Company.
2.5 Location of Business. The Company shall maintain its corporate
headquarters in the Los Angeles metropolitan area.
SECTION
Restrictions on Transferability
3.1 Restrictions on Transferability. The Registrable Securities and any
other securities issued in respect of the Registrable Securities upon any stock
split, stock dividend, recapitalization, merger, consolidation or similar event
shall not be sold, assigned, transferred or pledged except upon the conditions
specified in this Agreement, which conditions are intended to ensure compliance
with the provisions of the Securities Act. Each Investor shall cause any
proposed purchaser, assignee, transferee, or pledgee of any such shares held by
the Investors (the "TRANSFEREE") that is not a party to this Agreement to
execute and deliver to the Secretary of the Company an agreement (the
"ASSUMPTION AGREEMENT") or similar obligation, pursuant to which
17
such Transferee shall agree to take and hold such securities subject to the
provisions and upon the conditions specified in this Agreement.
3.2 RESTRICTIVE LEGENDS. Each certificate representing the Registrable
Securities and any other securities issued in respect of the Registrable
Securities upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall (unless otherwise permitted by the
provisions of Section 3.3 below) be stamped or otherwise imprinted with
appropriate restrictive legends. Each Investor and/or Holder consents to the
Company making a notation on its records and giving instructions to any transfer
agent of the Preferred Stock or the Common Stock in order to implement the
restrictions on transfer established in this Agreement.
3.3 NOTICE OF PROPOSED TRANSFERS. The holder of each certificate
representing Registrable Securities by acceptance thereof agrees to comply in
all respects with the provisions of this Section 3.3. Prior to any proposed
sale, assignment, transfer or pledge (each, a "TRANSFER") of any such
Registrable Securities (other than (a) a transfer not involving a change in
beneficial ownership, (b) in transactions involving the distribution without
consideration of Registrable Securities by the Investor to any of its direct or
indirect members, partners, retired members or retired partners, to a
partnership of which such Investor is a genera] partner, or to the estate of any
of its direct or indirect members, partners, retired members or retired
partners, (c) in transactions involving the transfer without consideration of
Registrable Securities by the Investor during his lifetime by way of gift or on
death by will or intestacy, (d) in transactions involving the transfer or
distribution of Registrable Securities by a corporation, limited partnership or
limited liability company to any subsidiary, parent or affiliated corporation,
limited partnership or limited liability company of such corporation, limited
partnership or limited liability company, or (e) in transactions in compliance
with Rule 144), unless there is in effect a registration statement under the
Securities Act covering the proposed Transfer, the holder thereof shall give
written notice to the Company of such holder's intention to effect such
Transfer. Each such notice shall describe the manner and circumstances of the
proposed Transfer in sufficient detail, and shall be accompanied, at such
Holder's expense by either (i) an unqualified written opinion of legal counsel
who shall be, and whose legal opinion shall be, reasonably satisfactory to the
Company addressed to the Company, to the effect that the proposed Transfer of
the Registrable Securities may be effected without registration under the
Securities Act, or (ii) a "no action" letter from the Commission to the effect
that the Transfer of such securities without registration will not result in a
recommendation by the staff of the Commission that action be taken with respect
thereto, whereupon the holder of such Registrable Securities shall be entitled
to transfer such Registrable Securities in accordance with the terms of the
notice delivered by the Holder to the Company.
Not later than fifteen (15) days following the date of any Transfer as
to which prior notice is not required pursuant to this Section 3, the transferor
of the Registrable Securities shall deliver to the Secretary of the Company
written notification of such Transfer setting forth the name of the transferor,
name and address of the transferee and the number of Registrable Securities
which have been so transferred.
Each certificate evidencing the Registrable Securities transferred as
above provided shall bear, except if such Transfer is made pursuant to Rule 144,
the appropriate restrictive legends, except that such certificate shall not bear
such restrictive legend if, in the opinion of counsel for
18
such holder and the Company, such legends are not required in order to establish
compliance with any provision of the Securities Act.
SECTION 4
Miscellaneous
4.1 Governing law. This Agreement shall be governed in all respects by
the laws of the State of California, as if entered into by and between
California residents exclusively for performance entirely within California.
4.2 Successors and Assigns. 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.
4.3 Entire Agreement; Amendment; Waiver. This Agreement (including the
Exhibits hereto) constitutes the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof and
supercedes in their entirety the Prior Rights Agreements. Neither this Agreement
nor any term hereof may be amended, waived, discharged or terminated, except by
a written instrument signed by the Company and the holders of at least a
majority of the Registrable Securities and any such amendment, waiver, discharge
or termination shall be binding on all the Holders, but in no event shall the
obligation of any Holder hereunder be materially increased or the rights of any
Holder hereunder be materially decreased, except upon the written consent of
such Holder.
4.4 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by United States
first-class mail, postage prepaid, or delivered personally by hand or nationally
recognized courier addressed (a) if to a Holder, as indicated on the signature
page to this Agreement, or at such other address as such holder or permitted
assignee shall have furnished to the Company in writing, or (b) if to the
Company, to Legal Department, PeopleSupport, Inc., 0000 Xxxxxxxx Xxxx., Xxx
Xxxxxxx, XX 00000 with a copy to Xxxxxx Xxxxxx, Esq., O'Melveny & Xxxxx, LLP,
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx, 00000, or at such
other address as the Company shall have furnished to each holder in writing. All
such notices and other written communications shall be effective (i) if mailed,
five (5) days after mailing and (ii) if delivered, upon delivery.
4.5 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any Holder, upon any breach or default of the
Company under this Agreement shall impair any such right, power or remedy of
such Holder nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default therefore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any Holder of any breach or default under this Agreement or any
waiver on the part of any Holder of any provisions or conditions of this
Agreement must be made in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any Holder, shall be cumulative and
not alternative.
19
4.6 Rights; Separability. Unless otherwise expressly provided herein, a
Holder's rights hereunder are several rights, not rights jointly held with any
of the other Holders. 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.
4.7 Information Confidential. Each Holder acknowledges that the
information received by them pursuant hereto may be confidential and for its use
only, and it will not use such confidential information in violation of the
Exchange Act or reproduce, disclose or disseminate such information to any other
person (other than its employees or agents having a need to know the contents of
such information, and its attorneys and other professional advisors), except in
connection with the exercise of rights under this Agreement, unless the Company
has made such information available to the public generally or such Holder is
required to disclose such information by a governmental body.
4.8 Termination. Notwithstanding anything in this Agreement to the
contrary, this Agreement shall terminate in its entirety upon the occurrence of
(a) any acquisition of the Company by means of merger or other form of corporate
reorganization in which the stockholders of the Company prior to such merger or
reorganization own less than fifty percent (50%) of the outstanding voting power
of the surviving corporation or acquiring entity or (b) a sale of all or
substantially all of the assets of the Company.
4.9 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
4.10 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.
20
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Investors' Rights Agreement effective as of the day and year first
above written.
THE COMPANY
PEOPLESUPPORT, INC.
By: /s/ Xxxxx Xxxxxxxxxx
---------------------------
Title:
-------------------------
[Signature Page to Investors Rights Agreement]
INVESTORS
MERITECH CAPITAL PARTNERS L.P.
By: Meritech Capital Associates L.L.C.
Its: General Partner
By: Meritech Management Associates L.L.C.
Its: Managing Member
By: /s/ Xxxx X. Xxxxxx
---------------------------------------------
Printed Name: Xxxx X. Xxxxxx
Title: Managing Member
Address: 00 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxx,XX 00000
MERITECH CAPITAL AFFILIATES L.P.
By: Meritech Capital Associates L.L.C.
Its: General Partner
By: Meritech Management Associates L.L.C.
Its: Managing Member
By: /s/ Xxxx X. Xxxxxx
---------------------------------------------
Printed Name: Xxxx X. Xxxxxx
Title: Managing Member
Address: 00 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
CDB WEB TECH INTERNATIONAL S.A.
By: _____________________________________________
Printed name: ___________________________________
Title: __________________________________________
Address: 0 Xxxxx Xxxxxxx
Xxxxxxxxxx X.X. 000
X 0000 Xxxxxxxxxx
[Signature Page to Investors Rights Agreement]
INVESTORS
MERITECH CAPITAL PARTNERS L.P.
By: Meritech Capital Associates L.L.C.
Its: General Partner
By: Meritech Management Associates L.L.C.
Its: Managing Member
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 00 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxx,XX 00000
MERITECH CAPITAL AFFILIATES L.P.
By: Meritech Capital Associates L.L.C.
Its: General Partner
By: Meritech Management Associates L.L.C.
Its: Managing Member
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 00 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
CDB WEB TECH INTERNATIONAL S.A.
By: /s/ XXXXX XX XXXXXXXXX
----------------------------------------------
Printed name: XXXXX XX XXXXXXXXX
Title: CHAIRMAN
Address: 0 Xxxxx Xxxxxxx
Xxxxxxxxxx X.X. 000
X 0000 Xxxxxxxxxx
[Signature Page to Investors Rights Agreement]
CAMBRIDGE TECHNOLOGY CAPITAL FUND I, L.P.
By: Cambridge Technology GPLP, L.P.
By: Cambridge Technology CGP, Inc.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------------------
Printed Name: Xxxxx Xxxxxxxxx
Title: Managing Director
Address: 00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
CAMBRIDGE TECHNOLOGY PARTNERS
(MASSACHUSETTS), INC.
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 0 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
CAMELOT VENTURES, LLC
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 000 Xxxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
[Signature Page to Investors Rights Agreement]
CAMBRIDGE TECHNOLOGY CAPITAL FUND I, L.P.
By: Cambridge Technology GPLP, L.P.
By: Cambridge Technology CGP, Inc.
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 0 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
CAMBRIDGE TECHNOLOGY PARTNERS
(MASSACHUSETTS), INC.
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Printed Name: Xxxxx X. Xxxxxxxx
Title: Executive VP
Address: 0 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
CAMELOT VENTURES, LLC
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 000 Xxxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
[Signature Page to Investors Rights Agreement]
CAMBRIDGE TECHNOLOGY CAPITAL FUND I, L.P.
By: Cambridge Technology GPLP, L.P.
By: Cambridge Technology CGP, Inc.
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 0 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
CAMBRIDGE TECHNOLOGY PARTNERS
(MASSACHUSETTS), INC.
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 0 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
CAMELOT VENTURES, LLC
By: /s/ Xxxxx Xxxxxxx
---------------------------------------------
Printed Name: Xxxxx Xxxxxxx
Title: VP
Address: 000 Xxxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
[Signature Page to Investors Rights Agreement]
OCTANE CAPITAL FUND I, L.P.
By: Octane Capital Management, LLC,
Its: General Partner
By: /s/ Xxxxxx X XxXxxxxx
---------------------------------------------
Printed Name: Xxxxxx X XxXxxxxx
Title: Manager
Address: Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
[Signature Page to Investors Rights Agreement]
EVO CAPITAL FUND I, L.P.
By: EVO Capital, LLC,
Its: General Partner
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
ACON VENTURE PARTNERS L.P.
By: ACON Venture Partners L.L.C.
Its: General Partner
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------------------
Printed Name: Xxxxxxxx X. Xxxxx
Title: __________________________________________
Address: 000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
LANSDOWNE CAPITAL PARTNERS L.L.C.
By: Lansdowne Capital Partners L.L.C.
Its: Nominee
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 0000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
[Signature Page to Investors Rights Agreement]
EVO CAPITAL FUND I, L.P.
By: EVO Capital, LLC,
Its: General Partner
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
ACON VENTURE PARTNERS L.P.
By: ACON Venture Partners L.L.C.
Its: General Partner
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, XX 00000
LANSDOWNE CAPITAL PARTNERS L.L.C.
By: Lansdowne Capital Partners L.L.C.
Its: Nominee
By: /s/ Xxxxxxx Xxxx
---------------------------------------------
Printed Name: Xxxxxxx Xxxx
Title: Senior Partner
Address: 0000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
[Signature Page to Investors Rights Agreement]
THE EXTRAPRISE GROUP
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------------
Printed Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman & CEO.
Address: 00 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
HEWLETT PACKARD
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 0000 X. Xxxxxxxxx Xxxxxx
XX 00
Xxxxxxxxx, XX 00000
RARE MEDIUM GROUP, INC.
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
[Signature Page to Investors Rights Agreement]
HEWLETT-PACKARD COMPANY
By: /s/ Xxxxx Xxxxx
---------------------------------------------
Printed Name: Xxxxx Xxxxx
Title: Sr. Vice President - Finance & Complements
Address: 000 Xxxxx Xxxxxx
XX 00
Xxxxxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxx
[Signature Page to Investors Rights Agreement]
SIEBEL SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------
Printed Name: Xxxxxx X. Xxxxxx
Title: Sr. Vice President, Finance and
Administration, and Chief Financial Officer
Address: 0000 Xxxxx Xxxxx Xx.
Xxx Xxxx, XX 00000-0000
VIANT CORPORATION
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 00 Xxxxx Xxxxxx, 0xx xxxxx
Xxxxxx, XX 00000
GC&H INVESTMENTS
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 0000 Xx Xxxxxx Xxxx
Five Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
[Signature Page to Investors Rights Agreement]
SIEBEL SYSTEMS, INC.
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 0000 Xxxxx Xxxxx Xx.
Xxx Xxxx, XX 00000-0000
VIANT CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
Printed Name: Xxxxxxx X. Xxxxxxx
Title: Vice President Finance
Address: 00 Xxxxx Xxxxxx, 0xx xxxxx
Xxxxxx, XX 00000
GC&H INVESTMENTS
By: _____________________________________________
Printed Name: __________________________________
Title: __________________________________________
Address: 0000 Xx Xxxxxx Xxxx
Five Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000
[Signature Page to Investors Rights Agreement]
SIEBEL SYSTEMS, INC.
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 0000 Xxxxx Xxxxx Xx.
Xxx Xxxx, XX 00000-0000
VIANT CORPORATION
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 00 Xxxxx Xxxxxx, 0xx xxxxx
Xxxxxx, XX 00000
GC&H INVESTMENTS
By: /s/ Xxxx X. Xxxxxxx
---------------------------------------------
Printed Name: Xxxx X. Xxxxxxx
Title: Executive Partner
Address: Xxx Xxxxxxxx Xxxxx, #0000
Xxx Xxxxxxxxx, XX 00000
[Signature Page to Investors Rights Agreement]
O'MELVENY & XXXXX LLP
By: /s/ Xxxxxx Xxxxxx
---------------------------------------------
Printed Name: Xxxxxx Xxxxxx
Title: Partner
Address: 0000 Xxxxxx xx xxx Xxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
IDEALAB! CAPITAL PARTNERS I-A, L.P.
By: idealab! Capital Management I, LLC,
Its: General Partner
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
IDEALAB! CAPITAL PARTNERS I-B, L.P.
By: idealab! Capital Management I, LLC,
Its: General Partner
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
[Signature Page to Investors Rights Agreement]
O'MELVENY & XXXXX LLP
By: _____________________________________________
Printed Name: ___________________________________
Title: __________________________________________
Address: 0000 Xxxxxx xx xxx Xxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
IDEALAB! CAPITAL PARTNERS I-A, L.P.
By: idealab! Capital Management I, LLC,
Its: General Partner
By: /s/ Xxxxxxx S Elkuf
---------------------------------------------
Printed Name: ___________________________________
Title: __________________________________________
Address: 000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
IDEALAB! CAPITAL PARTNERS I-B, L.P.
By: idealab! Capital Management I, LLC,
Its: General Partner
By: /s/ Xxxxxxx S Elkuf
---------------------------------------------
Printed Name: ___________________________________
Title: __________________________________________
Address: 000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
TMCT VENTURES, L.P.
Under management by Rustic Canyon Partners,
LLC
By: /s/ Xxxxxxx Song
----------------------------
Printed Name: Xxxxxxx Song
Title: Partner
Address: c/o Xxxxxxx Song
0000 Xxxxxxx Xxxxxxxxx
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, XX 00000
ACCEL VII L.P.
By: Accel VII Associates L.L.C.
Its: General Partner
By:
-----------------------------
Printed Name:
-------------------
Title:
--------------------------
Address: 000 Xxxxxxxxxx Xxx.
Xxxx Xxxx, XX 00000
Attn: Xxxxxxxx Xxxx Ranzella
000-000-0000
000-000-0000 (fax)
and
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: X. Xxxxxx Sednaoui
000-000-0000
000-000-0000 (fax)
TMCT VENTURES, L.P.
Under management by Rustic Canyon Partners,
LLC
By:
-----------------------------
Printed Name:
-------------------
Title:
--------------------------
Address: c/o Xxxxxxx Song
Times Mirror Company
000 Xxxx 0xx Xxxxxx
Xxx Xxxxxxx, XX 00000
ACCEL VII L.P.
By: Accel VII Associates L.L.C.
Its: General Partner
By: /s/ [ILLEGIBLE]
---------------------------------
Managing Member
Address: 000 Xxxxxxxxxx Xxx.
Xxxx Xxxx, XX 00000
Attn: Xxxxxxxx Xxxx Ranzetta
000-000-0000
000-000-0000 (fax)
and
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: X. Xxxxxx Sednaoui
000-000-0000
000-000-0000 (fax)
[Signature Page to Investors Rights Agreement]
ACCEL INTERNET FUND III L.P.
By: Accel Internet Fund III
Associates L.L.C.
Its: General Partner
By: /s/ [ILLEGIBLE]
---------------------------------
Managing Member
Address: 000 Xxxxxxxxxx Xxx.
Xxxx Xxxx, XX 00000
Attn: Xxxxxxxx Xxxx Ranzetta
000-000-0000
000-000-0000 (fax)
and
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: X. Xxxxxx Sednaoui
000-000-0000
000-000-0000 (fax)
ACCEL INVESTORS '99 L.P.
By: /s/ [ILLEGIBLE]
---------------------------------
General Partner
Address: 000 Xxxxxxxxxx Xxx.
Xxxx Xxxx, XX 00000
Attn: Xxxxxxxx Xxxx Ranzetta
000-000-0000
000-000-0000 (fax)
and
Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: X. Xxxxxx Sednaoui
000-000-0000
000-000-0000 (fax)
[Signature Page to Investors Rights Agreement]
BENCHMARK CAPITAL PARTNERS IV, L.P.
as nominee for
Benchmark Capital Partners IV, L.P.
Benchmark Founders' Fund IV, L.P.
Benchmark Founders' Fund IV-A, L.P.
and related individuals
By: Benchmark Capital Management
Co., IV, L.L.C.
Its: general partner
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Printed Name: Xxxxxx X. Xxxxxxxx
Title: Managing Member
Address: 0000 Xxxx Xxxx Xxxx, Xxxxx
000 Xxxxx Xxxx, XX 00000
[Signature Page to Investors Rights Agreement]
/s/ Xxxxx Xxxxxx
----------------------------------------
Xxxxx Xxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
----------------------------------------
Xx Xxxxx
JUMP INVESTORS II, LLC
By: PBK Management Company, Inc.
Its: Manager
----------------------------------------
Xxxxxxx Xxxxxx, President
----------------------------------------
----------------------------------------
Xxxx and Xxxx Xxxxxx
----------------------------------------
Xxxxx Xxxxx
[Signature Page to Investors Rights Agreement]
----------------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
----------------------------------------
Xx Xxxxx
JUMP INVESTORS II, LLC
By: PBK Management Company, Inc.
Its: Manager
----------------------------------------
Xxxxxxx Xxxxxx, President
----------------------------------------
----------------------------------------
Xxxx and Xxxx Xxxxxx
----------------------------------------
Xxxxx Xxxxx
[Signature Page to Investors Rights Agreement]
----------------------------------------
Xxxxx Xxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
----------------------------------------
Xx Xxxxx
JUMP INVESTORS II, LLC
By: PBK Management Company, Inc.
Its: Manager
----------------------------------------
Xxxxxxx Xxxxxx, President
----------------------------------------
----------------------------------------
Xxxx and Xxxx Xxxxxx
----------------------------------------
Xxxxx Xxxxx
[Signature Page to Investors Rights Agreement]
----------------------------------------
Xxxxx Xxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
/s/ Xx Xxxxx
----------------------------------------
Xx Xxxxx
JUMP INVESTORS II, LLC
By: PBK Management Company, Inc.
Its: Manager
----------------------------------------
Xxxxxxx Xxxxxx, President
----------------------------------------
----------------------------------------
Xxxx and Xxxx Xxxxxx
----------------------------------------
Xxxxx Xxxxx
----------------------------------------
Xxxxx Xxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
----------------------------------------
Xx Xxxxx
JUMP INVESTORS II, LLC
By: PBK Management Company, Inc.
Its: Manager
/s/ Xxxxxxx Xxxxxx
----------------------------------------
Xxxxxxx Xxxxxx, President
----------------------------------------
----------------------------------------
Xxxx and Xxxx Xxxxxx
----------------------------------------
Xxxxx Xxxxx
[Signature Page to Investors Rights Agreement]
XXXX AND XXXX XXXXXX, not in their
individual capacities but solely as
Trustees of The Xxxxxx Living Trust,
dated February 11,1988
/s/ Xxxx Xxxxxx
----------------------------------------
Xxxx Xxxxxx, Trustee
/s/ Xxxx Xxxxxx
----------------------------------------
Xxxx Xxxxxx, Trustee
[Signature Page to Investors Rights Agreement]
----------------------------------------
Xxxxx Xxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
----------------------------------------
Xx Xxxxx
JUMP INVESTORS II, LLC
By: PBK Management Company, Inc.
Its: Manager
----------------------------------------
Xxxxxxx Xxxxxx, President
----------------------------------------
----------------------------------------
Xxxx and Xxxx Xxxxxx
/s/ Xxxxx Xxxxx
----------------------------------------
Xxxxx Xxxxx
AS AN INDIVIDUAL INVESTOR
[Signature Page to Investors Rights Agreement]
