EXHIBIT F
PEOPLEPC INC.
SECOND AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
MAY 30, 2001
TABLE OF CONTENTS
PAGE
SECTION 1 GENERAL..............................................................3
1.1 Definitions..........................................................3
SECTION 2 REGISTRATION; RESTRICTIONS ON TRANSFER...............................6
2.1 Restrictions on Transfer.............................................6
2.2 Demand Registration..................................................7
2.3 Demand Registration for Put Registrable Securities...................8
2.4 Piggyback Registrations.............................................10
2.5 Form S-3 Registration...............................................11
2.6 Expenses of Registration............................................13
2.7 Obligations of the Company..........................................13
2.8 Termination of Registration Rights..................................16
2.9 Delay of Registration; Furnishing Information.......................16
2.10 Indemnification and Contribution....................................16
2.11 Assignment of Registration Rights...................................19
2.12 Amendment of Registration Rights....................................19
2.13 Limitation on Subsequent Registration Rights........................19
2.14 Agreement to Furnish Information....................................19
2.15 Rule 144 Reporting..................................................20
SECTION 3 MISCELLANEOUS.......................................................20
3.1 Governing Law.......................................................20
3.2 Survival............................................................20
3.3 Successors and Assigns..............................................21
3.4 Entire Agreement....................................................21
3.5 Severability........................................................21
3.6 Amendment and Waiver................................................21
3.7 Delays or Omissions.................................................21
3.8 Notices.............................................................22
3.9 Attorneys' Fees.....................................................22
3.10 Titles and Subtitles................................................22
3.11 Counterparts........................................................22
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PEOPLEPC, INC.
SECOND AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
THIS SECOND AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the
"AGREEMENT") is entered into as of the 30th day of May 2001 by and among
PEOPLEPC INC., a Delaware corporation (the "COMPANY"), the holders of the
Company's Series A Preferred Stock ("SERIES A STOCK") set forth on Exhibit A
hereto, the holders of the Company's Series B Preferred Stock ("SERIES B STOCK")
set forth on Exhibit B hereto, the holders of the Company's Series C Preferred
Stock ("SERIES C STOCK") set forth on Exhibit C hereto, and the holders of the
put options granted by the Company pursuant to the Put Option Agreement (as
defined below). The holders of the Series A Stock shall be referred to
hereinafter as the "SERIES A INVESTORS," the holders of the Series B Stock shall
be referred to hereinafter as the "SERIES B INVESTORS" and the holders of the
Series C Stock shall be referred to hereinafter as to "SERIES C INVESTORS"
(collectively as the "INVESTORS" and each individually as an "INVESTOR").
RECITALS
WHEREAS, the Company proposes to enter into the Put Option Agreement;
WHEREAS, as a condition of entering into the Put Option Agreement, the
Company has agreed to grant to each of @viso and SOFTBANK registration rights
for shares issued in accordance with the Put Option Agreement;
WHEREAS, the Series A Investors, the Series B Investors and the Series
C Investors possess registration rights, pursuant to that certain Amended and
Restated Investor Rights Agreement dated as of April 5, 2001, by and among the
Company, the Series A Investors, the Series B Investors, the Series C Investors
and certain stockholders (the "PRIOR AGREEMENT"); and
WHEREAS, the Company's, @viso's and SOFTBANK's obligations under the
Put Option Agreement are conditioned upon the execution and delivery of this
Agreement by such parties, the Company and the holders of at least a majority of
the Series A Stock, Series B Stock and Series C Stock.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and in the Put Option Agreement, the Series A Investors, Series B
Investors and the Series C Investors who are parties to the Prior Agreement,
hereby agree that the Prior Agreement shall be superseded and replaced in its
entirety by this Agreement, and the parties hereto further agree as follows:
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SECTION 1
GENERAL
1.1 DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:
"CHANGE OF CONTROL" means (a) the sale, lease or other disposition of
all or substantially all of the assets of the Company or (b) an acquisition of
the Company by another corporation or entity by consolidation, merger or other
reorganization in which the holders of the Company's outstanding voting stock
immediately prior to such transaction own, immediately after such transaction,
securities representing less than fifty percent (50%) of the voting power of the
corporation or other entity surviving such transaction, or any transaction or
series of related transactions to which the Company is a party in which more
than fifty percent (50%) of the Company's voting power is transferred, provided
that a Change of Control shall not include a merger effected exclusively for the
purpose of changing the domicile of the Company.
"COMMISSION" means the Securities and Exchange Commission
"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 successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"HOLDER" means any person owning of record Registrable Securities or
Put Registrable Securities that have not been sold to the public or any assignee
of record of such Registrable Securities or Put Registrable Securities in
accordance with Section 2.11 hereof.
"INITIAL OFFERING" means the Company's first firm commitment
underwritten public offering of its Common Stock registered under the Securities
Act.
"PUT OPTION AGREEMENT" shall mean the Put Option Agreement, dated May [
], 2001, by and among the Company, @viso Limited, a company organized under the
laws of the United Kingdom ("@VISO"), SOFTBANK Capital Partners LP, Softbank
Capital Advisors Fund LP, SOFTBANK Capital LP, each a Delaware limited
partnership (together, "SOFTBANK") and PeoplePC Europe N.V., a Dutch Company.
"PUT REGISTRABLE SECURITIES" means any common stock, par value $0.0001
per share (the "COMMON STOCK") of the Company issued or issuable upon the
exercise of the Primary Put Option or the Secondary Put Option pursuant to the
Put Option Agreement. Notwithstanding the foregoing, Put Registrable Securities
shall not include any securities sold by a person to the public pursuant to an
effective registration statement or available for sale under Rule 144(k)
pursuant to the Securities Act (or any successor provision).
"PUT REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number of
shares determined by calculating the total number of shares of the Company's
Common Stock
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that are Put Registrable Securities and either (a) are then issued and
outstanding or (b) are issuable pursuant to then exercisable or convertible
securities.
"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 of the Company issued
or issuable upon conversion of the Shares; (b) any Common Stock of the Company
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security) which is issued as a dividend or other distribution with respect
to, or in exchange for or in replacement of, such above-described securities;
(c) any Private Placement Shares (as that term is defined in the Letter
Agreement dated as of April 5, 2000 between the Company and Ford Motor Company
(the "LETTER AGREEMENT")) of the Company purchased by Ford Motor Company and its
affiliates ("FORD"); (d) any Common Stock issued or issuable upon the exercise
of the warrant issued to Ford pursuant to the Letter Agreement. Notwithstanding
the foregoing, Registrable Securities shall not include any securities sold by a
person to the public pursuant to an effective registration statement or
available for sale under Rule 144(k) pursuant to the Securities Act (or any
successor provision), and (e) the Company's Common Stock held by Xxxx Xxxxx, Xxx
Xxxxxx and Xxxxx Xxxxxx listed on Exhibit D hereto and their permitted assigns.
"REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number of shares
determined by calculating the total number of shares of the Company's Common
Stock that are Registrable Securities and either (a) are then issued and
outstanding or (b) are issuable pursuant to then exercisable or convertible
securities.
"REGISTRATION EXPENSES" shall mean any and all expenses incurred by the
Company in complying with Sections 2.2, 2.3, 2.4 and 2.5 hereof, including,
without limitation, all registration and filing fees, printing expenses, all
transfer agents and registrars' expenses and fees in connection with any
offering or disposition of Registrable Securities, all messenger and delivery
expenses and fees, accounting fees, fees and disbursements of counsel for the
Company, reasonable fees and disbursements of a single special counsel for the
Holders, which special counsel shall be selected by Holders owning a majority of
Registrable Securities then being registered and reasonably acceptable to all
other Holders owning Registrable Securities then being registered, blue sky fees
and expenses, the expense of any special audits 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) and any other
reasonable out-of-pocket expenses incurred by the Company or any Holder pursuant
to any provision of this Agreement.
"SEC" OR "COMMISSION" means the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale and stock transfer taxes.
"SHARES" shall mean (i) the Company's Series A Stock held by the Series
A Investors listed on Exhibit A hereto and their permitted assigns, (ii) the
Company's
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Series B Stock held by the Series B Investors listed on Exhibit B hereto and
their permitted assigns, and (iii) the Company's Series C Stock, and held by the
Series C Investors listed on Exhibit C hereto and their permitted assigns.
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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 Registrable Securities or Put 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;
(ii) (A) the transferee has agreed in writing to be bound by
the terms of this Agreement, (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
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. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144; or
(iii) notwithstanding the provisions of paragraphs (i) and
(ii) above, no such registration statement or opinion of counsel shall be
necessary for a transfer by a Holder which is (A) a partnership to its partners
or former partners in accordance with partnership interests, (B) a corporation
to its stockholders in accordance with their interest in the corporation, (C) a
limited liability company to its members or former members in accordance with
their interest in the limited liability company, (D) to the Holder's family
member or trust for the benefit of an individual Holder or (E) an affiliate (as
defined in Rule 405 pursuant to the Securities Act) or donee of a Holder,
provided that in each case the transferee will be subject to the terms of this
Agreement to the same extent as if he were an original Holder hereunder.
(b) Each certificate representing Registrable Securities or Put
Registrable Securities shall (unless otherwise permitted by the provisions of
the Agreement) be stamped or otherwise imprinted with a legend substantially
similar to the following (in addition to any legend required under applicable
state securities laws):
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 OR
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
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(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.
(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 of 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
shall receive a written request from the Holders of thirty percent (30%) of the
Registrable Securities then outstanding (the "INITIATING HOLDERS") that the
Company file a registration statement under the Securities Act covering the
registration of at least twenty percent (20%) of the Registrable Securities then
outstanding (or any lesser percent if the anticipated aggregate offering price,
net of underwriting discounts and commissions, would exceed $50,000,000 (a
"QUALIFIED PUBLIC OFFERING")), then the Company shall, within thirty (30) days
of the receipt thereof, give written notice of such request to all Holders, and
subject to the limitations of this Section 2.2, use its best efforts to effect,
as soon as practicable, and in any event within 60 days of the receipt of such
request, file with the Commission a registration statement with respect to such
Registrable Securities and thereafter use its best efforts to cause such
registration statement to be declared effective under the 0000 Xxx.
(b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2.2
or any request pursuant to Section 2.4 and the Company shall include such
information in the written notice referred to in Section 2.2 (a) or Section
2.4(a), as applicable. In such event, the right of any Holder to include its
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
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 in interest of the
Initiating Holders (which underwriter or underwriters shall be reasonably
acceptable to the Company). Notwithstanding any other provision of this Section
2.2 or Section 2.5, if the underwriter advises the Company that marketing
factors require a limitation of the number of securities to be underwritten
(including Registrable Securities) then the Company shall so advise all Holders
of Registrable Securities that would otherwise be underwritten pursuant hereto,
and the number of shares that may be included in the underwriting shall be
allocated to the Holders of such Registrable Securities on a pro rata basis
based on the relative number of Registrable Securities held by all such Holders
(including the Initiating Holders); provided, however, that the number of shares
of Registrable Securities to be included in such underwriting and registration
shall not be reduced unless all other securities of the Company are first
entirely excluded from the underwriting and
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registration. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.
(c) The Company shall not be required to effect a registration
pursuant to this Section 2.2:
(i) after the Company has effected three (3) registrations
pursuant to this Section 2.2, and such registrations have been declared or
ordered effective;
(ii) if the Company shall furnish to each Holder requesting a
registration statement pursuant to this Section 2.2 a certificate signed by the
Chief Executive Officer of the Company stating that the Board of Directors of
the Company has determined in its reasonable and good faith business judgment,
that it would be materially detrimental to the Company and its stockholders for
such registration statement to be effected at such time because the sale of
Registrable Securities covered by such registration statement or the disclosure
of information therein or in any related prospectus or prospectus supplement
would materially interfere with or otherwise adversely affect in any material
respect any acquisition, financing, corporate reorganization or other material
transaction or development involving the Company for sales of Registrable
Securities thereunder to then be permitted, and setting forth in general terms
the reasons for such determination, then 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 Holders; provided that such right to delay a
request shall be exercised by the Company not more than once in any twelve (12)
month period and provided further the Company shall not register any other
capital stock during such ninety (90) day period;
(iii) if the Company is eligible to register the Registrable
Securities on Form S-3 under the Securities Act of 1933; or
(iv) if the Initiating Holders propose to dispose of shares
of Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 2.5 below.
2.3 Demand Registration for Put Registrable Securities
(a) Subject to the conditions of this Section 2.3, if the Company
shall receive a written request from the Holders representing at least a
majority of the Put Registrable Securities held by all Holders that the Company
file a registration statement under the Securities Act covering the registration
of the Put Registrable Securities then outstanding held by such Holders, then
the Company shall, within thirty (30) days of the receipt thereof, give written
notice of such request to all Holders, and subject to the limitations of this
Section 2.3, use its best efforts to effect, as soon as practicable, and in any
event within 60 days of the receipt of such request, file with the Commission a
registration statement with respect to such Put Registrable Securities and
thereafter use its best efforts to cause such registration statement to be
declared effective under the 0000 Xxx.
(b) If the Holders intend to distribute the Put Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2.3
and the Company shall include
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such information in the written notice referred to in Section 2.3(a). In such
event, the right of any Holder to include its Put Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Put Registrable Securities in
the underwriting to the extent provided herein. All 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 in interest of the Holders (which
underwriter or underwriters shall be reasonably acceptable to the Company).
Notwithstanding any other provision of this Section 2.3, if the underwriter
advises the Company that marketing factors require a limitation of the number of
securities to be underwritten (including Put Registrable Securities) then the
Company shall so advise all Holders of Put Registrable Securities that would
otherwise be underwritten pursuant hereto, and the number of shares that may be
included in the underwriting shall be allocated to the Holders of such Put
Registrable Securities on a pro rata basis based on the relative number of Put
Registrable Securities held by all such Holders; provided, however, that the
number of shares of Put Registrable Securities to be included in such
underwriting and registration shall not be reduced unless all other securities
of the Company are first entirely excluded from the underwriting and
registration. Any Put Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.
(c) The Company shall not be required to effect a registration
pursuant to this Section 2.3:
(i) prior to August 15, 2001;
(ii) after the Company has effected three (3) registration
pursuant to this Section 2.3, and such registrations have been declared or
ordered effective;
(iii) if the Company shall furnish each Holder requesting a
registration statement pursuant to this Section 2.3 a certificate signed by the
Chief Executive Officer of the Company stating that the Board of Directors of
the Company has determined in its reasonable and good faith business judgment
that it would be materially detrimental to the Company and its stockholders for
such registration statement to be effected at such time because the sale of Put
Registrable Securities covered by such registration statement or the disclosure
of information therein or in any related prospectus or prospectus supplement
would materially interfere with or otherwise adversely affect in any material
respect any acquisition, financing, corporate reorganization or other material
transaction or development involving the Company for sales of Put Registrable
Securities thereunder to then be permitted, and setting forth in general terms
the reasons for such determination, then 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 Holders; provided that such right to delay a request shall
be exercised by the Company not more than once in any twelve (12) month period
and provided further the Company shall not register any other capital stock
during such ninety (90) day period.
(d) If the Company is eligible to register the Put Registrable
Securities on Form S-3 under the Securities Act of 1933, the Company may elect
to register such Put Registrable Securities on Form S-3.
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2.4 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of
Registrable Securities and Put Registrable Securities in writing at least thirty
(30) 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 to be filed pursuant to Section 2.2
and 2.3 and 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) specifying the approximate
date on which the Company proposes to file such registration statement and
advising each such Holder of its right to have any or all of the Registrable
Securites and Put Registrable Securities included among the securities to be
covered by such registration statement. Each Holder desiring to include in any
such registration statement all or any part of the Registrable Securities or Put
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 or Put Registrable Securities by such Holder. If a Holder decides not
to include all of its Registrable Securities or Put Registrable Securities in
any registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities or
Put 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.
(a) UNDERWRITING. If the registration statement under which the
Company gives notice under this Section 2.4 is for an underwritten offering, the
Company shall so advise the Holders of Registrable Securities and Put
Registrable Securities. In such event, the right of any such Holder to be
included in a registration pursuant to this Section 2.4 shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities and Put Registrable Securities in the
underwriting to the extent provided herein. If requested by the underwriters for
any underwritten offering of Registrable Securities or Put Registrable
Securities pursuant to a registration requested under Section 2.2 or 2.3, the
Company shall enter into an underwriting agreement with such underwriters for
such underwritten offering, which agreement will contain such representations
and warranties by the Company and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including indemnification and contribution provisions
substantially to the effect and to the extent provided in Section 2.10 hereof,
and agreements as to the provision of opinions of counsel and accountants'
letters. Any such underwriters shall be selected by the Holders of a majority of
the Registrable Securities and Put Registrable Securities to be sold pursuant to
the registration requested under Section 2.2 or 2.3 and such underwriters shall
be reasonably acceptable to the Company. All Holders proposing to distribute
their Registrable Securities or Put Registrable Securities through such
underwriting shall also enter into such underwriting agreement, which shall also
contain such representations and warranties by such Holders and such other terms
and provisions as are customarily contained in underwriting agreements with
respect to secondary distributions, including indemnification and contribution
provisions substantially to the effect and to the extent provided in Section
2.10 hereof, with the underwriter or underwriters selected for such underwriting
by the Company (and reasonably acceptable to the Holders proposing to distribute
their Registrable Securities or Put Registrable Securities through such
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underwriting). Notwithstanding any other provision of the Agreement, 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, first, to the Company; second,
to the Holders on a pro rata basis based on the total number of Registrable
Securities and Put Registrable Securities held by the Holders; and third, to any
stockholder of the Company (other than a Holder) on a pro rata basis. No such
reduction shall (i) reduce the securities being offered by the Company for its
own account to be included in the registration and underwriting, or (ii) reduce
the amount of securities of the selling Holders included in the registration
below thirty percent (30%) of the total amount of securities included in such
registration. In no event will shares of any other selling stockholder be
included in such registration that would reduce the number of shares that may be
included by Holders without the written consent of Holders of not less than a
majority of the Registrable Securities and Put Registrable Securities proposed
to be sold in the offering. If any Holder disapproves of the terms of any such
underwriting, such Holder may elect to withdraw therefrom by written notice to
the Company and the underwriter, delivered at least ten (10) business days prior
to the effective date of the registration statement. Any Registrable Securities
or Put Registrable Securities excluded or withdrawn from such underwriting shall
be excluded and withdrawn from the registration. For any Holder that is a
partnership or corporation, the partners, retired partners and stockholders of
such Holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing person shall be
deemed to be a single "HOLDER", and any pro rata reduction with respect to such
"HOLDER" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"HOLDER", as defined in this sentence.
(b) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.4 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration; provided that any
Holder shall be entitled to initiate or continue such registration as a demand
registration pursuant to Section 2.2 or 2.3, as applicable, following such
termination or withdrawal to the extent that such registration by such Holder
would otherwise satisfy the requirements of Section 2.2 or 2.3 and provided
further that the Company shall be obligated to pay all Registration Expenses to
the extent incurred in connection with any such registration statement
terminated or withdrawn subsequent to its filing.
(c) The foregoing notwithstanding, the rights set forth in Section
2.4 shall not apply to Put Registrable Securities prior to August 15, 2001.
2.5 FORM S-3 REGISTRATION. In case the Company shall receive from any
Holder or Holders of Registrable Securities or Put Registrable Securities 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 Put Registrable Securities; and
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(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 or Put Registrable Securities as are specified
in such request, together with all or such portion of the Registrable Securities
or Put Registrable Securities of any other Holder or Holders joining in such
request as are specified in a written request given within 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 2.5:
(i) if Form S-3 (or any successor or similar form) is not
available for such offering by the Holders, or
(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 or Put Registrable Securities and such other
securities (if any) at an aggregate price to the public of less than five
million dollars ($5,000,000), or
(iii) if within thirty (30) days of receipt of a written
request from the Initiating Holders pursuant to Section 2.2(a), the Company
gives notice to the Holders of the Company's intention to file a registration
statement within sixty (60) days and such registration statements is filed
within such sixty (60) day period;
(iv) if the Company shall furnish to each Holder a
certificate signed by the Chief Executive Officer of the Company stating that
the Board of Directors of the Company has determined in its reasonable and good
faith business judgment that it would be materially detrimental to the Company
and its stockholders for such Form S-3 registration to be effected at such time
because the sale of Registrable Securities covered by such registration
statement or the disclosure of information therein or in any related prospectus
or prospectus supplement would materially interfere with or otherwise adversely
affect in any material respect any acquisition, financing, corporate
reorganization or other material transaction or development involving the
Company for sales of Registrable Securities thereunder to then be permitted, and
setting forth in general terms the reasons for such determination, then 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 2.5; provided, that such
right to delay a request shall be exercised by the Company not more than once in
any twelve (12) month period and provided further the Company shall not register
any other capital stock during such ninety (90) day period, or
(v) if the Company has, within the six (6) month period
preceding the date of such request, already effected one (1) registration on
Form S-3 for the Holders pursuant to this Section 2.5, or
(vi) in any particular jurisdiction in which the Company
would be required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and Put Registrable
Securities and other securities so requested to be registered as soon as
practicable after receipt of the
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request or requests of the Holders. Registrations effected pursuant to this
Section 2.5 shall not be counted as demands for registration or registrations
effected pursuant to Section 2.2.
2.6 EXPENSES OF REGISTRATION. Except as specifically provided herein,
any and all Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2.2, 2.3, 2.4 or 2.5 herein
shall be borne by the Company. All Selling Expenses incurred in connection with
any registrations hereunder, shall be borne by the holders 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, 2.3 or 2.5, the request of which has
been subsequently withdrawn by the Initiating Holders unless (a) the withdrawal
is based upon material adverse information concerning the Company of which the
Initiating Holders were not aware at the time of such request or (b) a majority
of the Initiating Holders agree to forfeit their right to one requested
registration pursuant to Section 2.2, 2.3 or 2.5, as applicable, in which event
such right shall be forfeited by all Holders. If the Holders are required to pay
the Registration Expenses, such expenses shall be borne by the holders of
securities (including Registrable Securities and Put 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 a withdrawn offering pursuant to clause (a) above, then the Holders
shall not forfeit their rights pursuant to Section 2.2, 2.3 or 2.5 to a demand
registration.
2.7 OBLIGATIONS OF THE COMPANY
Whenever required to effect the registration of any Registrable
Securities or Put Registrable Securities, the Company shall, promptly as
practicable (but subject, in the case of any registration as provided in Section
2.2 or 2.3, to the provisions thereof):
(a) Prepare and file with the Commission a registration statement
as well as any necessary supplements and amendments thereto with respect to such
Registrable Securities and Put Registrable Securities and use all reasonable
efforts to cause such registration statement to become effective, and remain
effective until the earlier to occur of (i) such time as all Registrable
Securities and Put Registrable Securities covered by such registration statement
have been disposed of in accordance with the intended methods of disposition set
forth in such registration statement and (ii) the expiration, in the case of a
registration pursuant to Section 2.2 or 2.3, 90 days after such registration
statement becomes effective; provided, however, that, before filing a
registration statement or prospectus or any amendments or supplements thereto,
the Company shall (x) provide counsel selected by Holders owning a majority of
such Registrable Securities and/or Put Registrable Securities with an
opportunity to participate in the preparation of such registration statement and
each prospectus included therein (and each amendment or supplement thereto) to
be filed with the Commission and (y) notify each Holder and such counsel of any
stop order issued by the Commission and take all reasonable action required to
prevent the entry of such stop order or to remove it if entered. The Company
shall not be required to file, cause to become effective or maintain the
effectiveness of any registration statement that contemplates a distribution of
securities on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act.
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(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 for the period set forth in
paragraph (a) above.
(c) Furnish to each Holder and to any underwriter of such
Registrable Securities or Put Registrable Securities such number of copies of
the registration statement, each amendment and supplement therto (in each case,
including all supplements thereto), copies of the prospectus, including each
preliminary prospectus included in such registration in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities and Put Registrable Securities owned by them.
(d) Use its reasonable best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify in writing each Holder of Registrable Securities and
Put Registrable Securities covered by such registration statement at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act or upon the occurrence of any event as a result of which, the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing or of any request by
the Commission or the National Association of Securities Dealers for any
amendment of or supplement to any registration statement or other document
relating to such offering, and in such case the Company shall during a
commercially reasonable time prepare a supplement or amendment to such
prospectus and furnish to each Holder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that,
after delivery to the purchasers of such Registrable Securities or Put
Registrable Securities, such prospectus shall not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made.
(g) Use its best efforts to furnish, on the date that such
Registrable Securities and Put 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, of the counsel representing the Company for
the purposes of such registration, in form and substance as
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is customarily given to underwriters in an underwritten public offering,
addressed to the underwriters, if any, 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 addressed to the underwriters,
if any.
(h) Make available for inspection by any lead or managing
underwriter participating in any disposition pursuant to such registration
statement, counsel selected by Holders owning a majority of such Registrable
Securities and Put Registrable Securities to be disposed pursuant to such
registration statement, any attorney, accountant or other agent retained by any
lead or managing underwriter (collectively, the "Inspectors") pursuant to the
terms of a nondisclosure agreement reasonably acceptable to the Company all
financial and other records, pertinent corporate documents and properties of the
Company (collectively, the "Records") as shall be reasonably necessary to enable
the Inspectors to exercise their due diligence responsibility and cause the
Company's officers, directors and employees and the independent public
accountants of the Company to supply all information reasonably requested by any
such Inspector in connection with such registration statement; provided,
however, that records that the Company determines, in good faith, to be
confidential and in respect of which the Company notifies each Holder that such
Records are confidential shall not be disclosed to the Inspectors unless (x) the
disclosure of such Records is necessary to avoid or correct a misstatement or
omission in the applicable registration statement (in which case, the Holders
and the Inspectors shall cooperate with the Company in seeking confidential
treatment of such Records) or (y) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction;
each Holder and Inspector agrees that it shall, upon learning that disclosure of
such Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of such Records.
(i) Otherwise use commercially reasonable efforts to comply with
all applicable rules and regulations of the Commission and make available to
each Holder, as soon as reasonably practicable, an earnings statement covering a
period of twelve (12) months beginning after the effective date of the
registration statement, in a manner which satisfies the provisions of Section
11(a) of the 1933 Act.
(j) Use its commercially reasonable efforts to assist the Holders
in the marketing of Registrable Securities or Put Registrable Securities in
connection with underwritten offerings (including, to the extent reasonably
consistent with work commitments and other personal obligations, using
reasonable efforts to have officers of the Company attend "road shows" and
analyst or investor presentations scheduled in connection with such
registration), with all out-of-pocket costs and expenses incurred by the Company
or such officers in connection with such attendance or assistance to be paid by
the Holders.
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(k) Make commercially reasonable efforts to keep each Holder
advised as to all major developments in the initiation and progress of such
registration.
(l) Cause all such Registrable Securities and Put Registrable
Securities registered pursuant hereunder to be listed on each securities
exchange on which similar securities issued by the Company are then listed.
2.8 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Section 2 to Holders of Registrable Securities shall terminate and be
of no further force and effect five (5) years after the date of the Company's
Initial Offering. All Registration rights granted under their Section 2 to
Holders of Put Registrable Securities shall terminate and be of no further force
and effect five (5) years after the date hereof. In addition, a Holder's
registration rights with regard to Registrable Securities shall expire if (x)
(i) the Company has completed its Initial Offering and is subject to the
provisions of the Exchange Act, (ii) such Holder (together with its affiliates,
partners and former partners) holds less than 1% of the Company's outstanding
Common Stock (treating all shares of convertible Preferred Stock on an as
converted basis) and (iii) all Registrable Securities held by and issuable to
such Holder (and its affiliates, partners, former partners, members and former
members) may be sold under Rule 144 during any ninety (90) day period or (y)
upon the effective date of a Change of Control of the Company. A Holder's
registration rights with regard to Put Registrable Securities shall expire if
all Put Registrable Securities held by and issuable to such Holder (and its
affiliates, partners, former partners, members and former members) (x) may be
sold under Rule 144 during any ninety (90) day period or (y) upon the effective
date of a Change of Control of the Company.
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, 2.4 or 2.5 that the
selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them, the Put 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 or Put Registrable Securities.
(c) The Company shall have no obligation with respect to any
registration requested pursuant to Sections 2.2 or 2.4, if, due to the operation
of Section 2.2(b), the number of shares or the anticipated aggregate offering
price of the Registrable Securities to be included in the registration does not
equal or exceed the number of shares or the anticipated aggregate offering price
required to originally trigger the Company's obligation to initiate such
registration as specified in Sections 2.2 or 2.4, whichever is applicable.
2.10 INDEMNIFICATION AND CONTRIBUTION.
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In the event any Registrable Securities or Put Registrable Securities
are included in a registration statement under Sections 2.2, 2.3, 2.4 or 2.5 of
this Agreement:
(a) To the fullest extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners, officers, directors,
agents, trustees and stockholders 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 Section 15 of the Securities Act or
Section 20 of the Exchange Act and any investment advisor of such Holder,
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, liabilities or
expenses (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 prospectus or final prospectus contained therein or any amendments
or supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act or any
state securities law in connection with the offering covered by such
registration statement; and the Company will pay as incurred to each such
Holder, partner, officer, agent, trustee, stockholder, director, underwriter or
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; 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, claim, damage, liability or action if such settlement is effected without
the consent of the Company, which consent shall not be unreasonably withheld,
nor shall the Company be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based upon
a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
such Holder, partner, officer, director, agent, trustee, stockholder,
underwriter or controlling person of such Holder.
(b) To the fullest extent permitted by law, each Holder will, if
Registrable Securities or Put 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, officers, agents, trustees and stockholders and each person, if
any, who controls the Company within the meaning of Section 15 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,
officers, or any person who controls such other Holder, against any losses,
claims, damages, liabilities or expenses (joint or several) to which the Company
or any such director, officer, controlling person, underwriter or other such
Holder, or partner, director, officer, agent, trustee, stockholder or
controlling person of such other Holder may become subject under the Securities
Act or Section 20 of the Exchange Act and any investment advisor of such other
Holder or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder under an instrument duly executed by such Holder and
stated to be
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specifically for use in connection with such registration; and each such Holder
will pay as incurred any legal or other expenses reasonably incurred by the
Company or any such director, officer, agent, trustee, stockholder or
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 will, 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 other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the indemnified party; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such indemnified
party by the counsel retained by the indemnifying party would be inappropriate
due to actual or potential differing interests between such indemnified party
and any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time of
the commencement of any such action, if 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, 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 fullest 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 or Put
Registrable Securities in a
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registration statement and the 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 of 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 or
Put Registrable Securities pursuant to this Section 2 may be assigned by a
Holder to a transferee or assignee of Registrable Securities or Put Registrable
Securities which (a) is a subsidiary, parent, general partner, limited partner,
retired partner, member or retired member of a Holder, or is an affiliate or
donee of such Holder, including without limitations, any partnership or other
entity of which any affiliate of such Holder is a general partner or over which
such Holder has investment discretion, or any employee of any of the foregoing,
(b) is a Holder's family member or trust for the benefit of an individual
Holder, or (c) acquires at least ten percent (10%) of the Registrable Securities
and Put Registrable Securities (as adjusted for stock splits and combinations);
provided, however, (i) 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 (ii) such transferee shall agree to
be subject to all restrictions set forth in this 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 Company
and the Holders of at least a majority in interest of the Registrable Securities
then outstanding and Put Registrable Securities then outstanding; provided,
however, that if such amendment adversely affects the Registrable Securities or
Put Registrable Securities held by a non-consenting Holder in a manner different
than that of a consenting Holder, then such amendment or waiver shall require
the consent of such adversely affected non-consenting party; provided, further,
that any waiver or amendment of this Section 2.12 shall require the consent of
all parties to this Agreement. 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 of Registrable
Securities or Put Registrable Securities hereby agree to be bound by the
provisions hereunder.
2.13 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS.
From and after the date of this Agreement, the Company shall not,
without the prior written consent of the Holders of a majority of the
Registrable Securities then outstanding and Put Registrable Securities then
outstanding, enter into any agreement with any holder or prospective holder of
any securities of the Company that would grant such holder registration rights
pari passu or senior to those granted to the Holders hereunder.
2.14 AGREEMENT TO FURNISH INFORMATION.
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Each Holder, affiliate and donee agrees to execute and deliver such
other agreements as may be reasonably requested by the Company or the
underwriter which are consistent with the foregoing and which are necessary to
give further effect thereto. In addition, if requested by the Company or the
representative of the underwriters of Common Stock (or other securities) of the
Company, each Holder, affiliate and donee shall provide, within 10 business days
of such request, such information as may be required by the Company or such
representative in connection with the completion of any public offering of the
Company's securities pursuant to a registration statement filed under the
Securities Act. 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 and Put 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 after the effective date of
the first registration filed by the Company for an offering of its securities to
the general public;
(b) File with the SEC, in a timely manner, all reports and other
documents required of the Company under the Exchange Act; and
(c) So long as a Holder owns any Registrable Securities or Put
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 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
MISCELLANEOUS
3.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California as applied to agreements among
California residents entered into and to be performed entirely within
California.
3.2 SURVIVAL. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any Holder and
the closing of the transactions contemplated
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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.
3.3 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 and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Registrable Securities or Put 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 or Put 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 shares in its records as the absolute owner and holder of such shares
for all purposes, including the payment of dividends or any redemption price.
3.4 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules
hereto, to constitute the full and entire understanding and agreement between
the parties with regard to the subjects hereof and no party shall be liable or
bound to any other in any manner by any representations, warranties, covenants
and agreements except as specifically set forth herein and therein.
3.5 SEVERABILITY. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
3.6 AMENDMENT AND WAIVER.
(a) Except as otherwise expressly provided, this Agreement may be
amended or modified only upon the written consent of the Company and the holders
of at least a majority of the Registrable Securities and Put Registrable
Securities, provided, however, that if any amendment or modification has the
effect of adversely affecting the interests of a non-consenting party in a
manner different than the interests of the consenting parties, then such
amendment or modification shall also require the consent of the adversely
affected non-consenting party.
(b) Except as otherwise expressly provided, 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
Registrable Securities and Put Registrable Securities; provided, however, that
if any amendment or modification has the effect of adversely affecting the
interests of a non-consenting party in a manner different than the interests of
the consenting parties, then such amendment or modification shall also require
the consent of the adversely affected non-consenting party.
3.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing 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
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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.
3.8 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) 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 signature pages hereof or
Exhibits A, B, and C hereto or at such other address as such party may designate
by ten (10) days advance written notice to the other parties hereto.
3.9 ATTORNEYS' FEES. In the event that any suit or action is instituted
to enforce any provision in this Agreement, 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.
3.10 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.
3.11 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.
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IN WITNESS WHEREOF, the parties hereto have executed this INVESTOR
RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
PeoplePC, Inc. @VISO LIMITED
By: /s/ Xxxx Xxxxx By: /s/ Xxxxx Boulben
-------------------------------- -----------------------------------
Name: Xxxx Xxxxx Name: Xxxxx Boulben
Title: CEO Title: Director
SOFTBANK Capital Partners LP
SOFTBANK Capital LP
SOFTBANK Capital Advisors Fund LP
By: SOFTBANK Capital Partners LLC
its General Partner
/s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Admin. Member
SOFTBANK Technology Ventures IV L.P.
SOFTBANK Technology Advisors Fund L.P.
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name:
Title:
/s/ Xxxxxxxx Xxxxx
---------------------------------------
Xxxxxxxx Xxxxx
EXHIBIT A
SERIES A:
SCHEDULE OF PURCHASERS
AGGREGATE
NAME AND ADDRESS SHARES PURCHASE PRICE
SOFTBANK Technology Ventures IV L.P. 7,064,640 $1,766,160
000 Xxxx Xxx Xxxxxx - Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxx XxxXxxxxx
SOFTBANK Technology Advisors Fund L.P. 135,360 $33,840
000 Xxxx Xxx Xxxxxx - Xxxxx 0000
Xxx Xxxx, XX 00000
Attn: Xxxxx XxxXxxxxx
Xxxxxxx Brothers LLC 2,000,000 $500,000
00 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Xxxxxx, XX 900,000 $225,000
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Xxxxxxx X. Xxxxx 800,000 $200,000
0 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxx Xxxxxxxx 400,000 $100,000
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Xxx Xxxxxx 100,000 $25,000
000 X'Xxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
AGGREGATE
NAME AND ADDRESS SHARES PURCHASE PRICE
Xxxx Xxxxxxxx 100,000 $25,000
0 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Xxxxx & Xxxx Xxxxxxxx 100,000 $25,000
0000 X. Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Xxxxxxx Xxxxxxxxxx 100,000 $25,000
0000 Xxxxxxx Xxxxxx, Xxx. 000
Xxxxxxx, Xxxxxxxxxx 00000
Xxx Xxxxxx 100,000 $25,000
x/x Xxxxxxxxx Xxxxxxxx Xxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx, Xx 80,000 $20,000
c/o Greentree Nutrition
000 Xxxxx Xxxxxx - Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Xxx Xxxxx 80,000 $20,000
c/x Xxxxxxx Breed Xxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxx Xxxxxx 20,000 $5,000
000 Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Xxxxx Xxxxxxx 20,000 $5,000
000 Xxxx Xxxxxx
Xxxxx Xxxx, XX X0X000
TOTAL: 12,000,000 $3,000,000
========== ==========
EXHIBIT B
SERIES B:
SCHEDULE OF PURCHASERS
AGGREGATE
NAME AND ADDRESS SHARES PURCHASE PRICE
------ --------------
Softbank Capital Partners L.P. 10,173,509 $44,356,499.24
00 Xxxxxxx Xxxx #000
Xxxxxx Xxxxxx, XX 00000
(000) 000-0000
147,592 $643,501.12
Softbank Capital Advisors Fund L.P.
00 Xxxxxxx Xxxx, #000
Xxxxxx Xxxxxx, XX 00000
(000) 000-0000
Nexus Capital Partners II, LP 1,146,789 $5,000,000.04
Xxx Xxxxxxx, General Partner
000 Xxxxx Xxxxxx, Xxx. 0000
Xxx Xxxxxxxxx, XX 00000
(000) 000-0000
Softbank Technology Ventures 1,146,789 $5,000,000.04
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
(000) 000-0000
Maveron Equity Partners, L.P. 1,146,789 $5,000,000.04
000 Xxxxx Xxx., Xxxxx 0000
Xxxxxxx, XX 00000
(000) 000-0000
H&Q PeoplePC Investors, LP 96,331 $420,003.16
0 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
(000) 000-0000
Xxxxxxxxx & Xxxxx California 57,339 $249,998.04
0 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
(000) 000-0000
Xxxxxxxxx & Xxxxx Employee Venture Fund, 57,339 $249,998.04
X.X. XX
0 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
(000) 000-0000
Access Technology Partners, L.P. 917,431 $3,999,999.16
0 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
(000) 000-0000
Access Technology Partners 18,349 $80,001.64
Brokers Fund, L.P.
0 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
(000) 000-0000
14,908,257 $65,000,000.52
========== ==============
TOTAL:
EXHIBIT C
SERIES C:
SCHEDULE OF PURCHASERS
AGGREGATE PURCHASE CONSIDERATION
NAME AND ADDRESS SHARES PRICE RECEIVED
---------------- ------ ------------------ ----------------
----------------------------------------------------------------------------------------------------------
Access Technology Partners, LP 70,534 $ 740,042.72 $ 740,042.72
0 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxx
E-mail:
xxxxxxx.xxx@xxxxx.xxx
----------------------------------------------------------------------------------------------------------
Access Technology Partners Brokers Fund, LP 1,410 $ 14,793.72 $ 14,793.72
0 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxx
E-mail:
xxxxxxx.xxx@xxxxx.xxx
----------------------------------------------------------------------------------------------------------
Xxxxxx, XX 69,193 $ 725,972.95 $ 725,972.95
Attn: Xxxx Xxxxxxxxx
Xxxxxx.xxxxxxxx@xxxxxxxxx.xxx
----------------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxxx 7,688 $ 80,662.50 $ 80,662.50
E-mail: xxx@xxxxxxx.xxx
----------------------------------------------------------------------------------------------------------
Ford Motor Company 2,382,825 $ 25,000,599.90 $ 25,000,599.90
Office of the General Counsel
0 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Attention: Corporate Secretary
With a copy to:
Xxxx X. Xxxxx
Ford Motor Company
0 Xxxxxxxx Xxxx
Xxxx 0000-X0
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
E-mail: xxxxxx@xxxx.xxx
----------------------------------------------------------------------------------------------------------
Xxx Xxxxx 6,151 $ 64,536.29 $ 64,536.29
C/x Xxxxxxx Breed Xxxxxx &
Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
E-mail: xxxxxx@xxxx.xxx
----------------------------------------------------------------------------------------------------------
H&Q PeoplePC Investors LP 7,407 $ 77,714.23 $ 77,714.23
0 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxx
E-mail:
xxxxxxx.xxx@xxxxx.xxx
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
Xxxxxxxxx & Xxxxx California 4,408 $ 46,248.74 $ 46,248.74
0 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxx
E-mail:
xxxxxxx.xxx@xxxxx.xxx
----------------------------------------------------------------------------------------------------------
H&Q Employee Venture Fund 2000 LP 4,408 $ 46,248.74 $ 46,248.74
0 Xxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxx
E-mail:
xxxxxxx.xxx@xxxxx.xxx
----------------------------------------------------------------------------------------------------------
Xxxx Xxxxxxx Xxxxxxxxx and Xxxxxx Xxx 7,688 $ 80,662.50 $ 80,662.50
Xxxxxxxx
000 000-0000
----------------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxx 6,151 $ 64,536.29 $ 64,536.29
Fax (000) 000-0000
----------------------------------------------------------------------------------------------------------
Maveron Equity Partners 88,166 $ 925,037.67 $ 925,037.67
000 Xxxxx Xx., Xxx. 0000
Xxxxxxx, XX 00000
Attn: Xxx Xxxxxxx
E-mail: xxxxxxxx@xxxxxxx.xxx
----------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxx 30,752 $ 322,649.98 $ 322,649.98
c/o Goldman, Sachs & Co.
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
E-mail: xxxxx.xxxxxxxx@xx.xxx
----------------------------------------------------------------------------------------------------------
Nexus Capital Partners II LP 88,166 $ 925,037.67 $ 925,037.67
000 Xxxxx Xx., Xxx. 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxxxx
E-mail: xxxxxxxx@xxxxxxxx.xxx
----------------------------------------------------------------------------------------------------------
PPC Holdings LLC 76,880 $ 806,624.96 $ 806,624.96
Attn: Xxxxxxx Xxxxx
000 Xxxxxxx Xxxxxx, 00xx Xx.
Xxx Xxxx, XX 00000
E-mail: xxx@xxxxxxxxx.xxx
----------------------------------------------------------------------------------------------------------
Rosewood Capital III, L.P. 91,300 $ 957,919.60 $ 957,919.60
Attn: Xxxxx Xxxxxx
Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
000 000-0000
xxxxx@xxxxxxxxxx.xxx
----------------------------------------------------------------------------------------------------------
RVG IV, L.P. 138,348 $ 1,451,547.20 $ 1,451,547.20
Attn: Xxxxx Xxxxxx
Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
000 000-0000
xxxxx@xxxxxxxxxx.xxx
----------------------------------------------------------------------------------------------------------
RWD Partners Fund, LLC 7,102 $ 74,514.18 $ 74,514.18
Attn: Xxxxx Xxxxxx
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
000 000-0000
xxxxx@xxxxxxxxxx.xxx
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
Xxxxxxx Brothers LLC 153,763 $ 1,613,281.30 $ 1,613,281.30
00 Xxxx Xxxxxx, 00xx Xx.
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
212 880-1880
E-mail: xxxxxxxx@xxxxxxx.xxx
----------------------------------------------------------------------------------------------------------
Softbank Technology Ventures IV LP 631,306 $ 6,623,662.55 $ 6,623,662.55
Softbank Technology Advisors Fund LP 10,407 $ 109,190.24 $ 109,190.24
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxx Xxxx
E-mail: xxxxxxxx@xxxx.xxx
Attn: Xxxxx XxXxxxxx
E-mail: xxxxx@xxxx.xxx
----------------------------------------------------------------------------------------------------------
Softbank Capital Partners LP 782,153 $ 8,206,349.20 $ 8,206,349.20
Softbank Capital Advisors Fund LP 11,347 $ 119,052.72 $ 119,052.72
Citizens Bank Building
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
E-mail:
Xxxxx_Xxxxxx@xxxxxxxx.xxx
----------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxxxx 7,688 $ 80,662.50 $ 80,662.50
c/o The Acceleratorgroup
000 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Email:
xxxxxxx@xxxxxxxxxxxxxxxx.xxx
----------------------------------------------------------------------------------------------------------
WS Investment Co. No. 2000A 47,348 $ 496,775.21 $ 496,775.21
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxx Xxxxxxxxx
----------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxx 1,537 $ 16,126.20 $ 16,126.20
000 Xxxx Xxxxxx
Xxxxx Xxxx, X0X 0X0
Xxxxxx
e-mail: xxxxxxxxx@xxx.xxx
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
TOTAL 4,734,126 $ 49,670,449.71 $ 49,670,449.71
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