Exhibit 10.5
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FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
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This Agreement, dated as of April 24, 2000 is entered into by and among
Avici Systems Inc. (the "Company"), (i) Accel V L.P., Accel Internet/Strategic
Technology Fund L.P., Accel Keiretsu V L.P., Accel Investors `96 L.P., Xxxxxxx
X. Xxxxxxxxx Partners (collectively, the "Accel Entities"), Oak Investment
Partners VII, L.P., Oak VII Affiliates Fund, L.P., Brentwood Associates VII,
L.P., Brentwood Affiliates Fund, Polaris Venture Partners, L.P., Polaris Venture
Partners Founders' Fund, L.P., Nortel Networks Inc. ("Nortel"), Comdisco, Inc.
("Comdisco"), Amerindo Technology Growth Fund II and Xxxxxx Master Trust
(collectively, the "Amerindo Entities"), Anschutz Family Investment Company LLC
("Anschutz"), Tudor Arbitrage Partners, L.P., Tudor BVI Futures, Ltd., Tudor
Raptor Global Fund, Ltd. and Raptor Global Fund, L.P. (collectively, the "Tudor
Entities"), Bayview Investors, Ltd., X.X. Xxxxxx Direct Venture Capital
Institutional Investors LLC, X.X. Xxxxxx Direct Venture Capital Private
Investors LLC, MeriTech Capital Partners L.P., MeriTech Capital Affiliates L.P.,
DLJ Capital Corp., DLJ ESC II, L.P., Sprout Capital VIII, L.P., Sprout Venture
Capital, L.P., Xxxxxxx Xxxxx IBK Positions Inc., Xxxxxxx Xxxxx KECALP X.X. 0000,
XXXXXX Inc., as nominee for Xxxxxxx Xxxxx KECALP International L.P. 1999, Nissho
Electronics (USA) Corporation, Nissho Electronics Corporation, TWP Avici
Investors, Tailwind Capital Partners, L.P., Itochu Corporation, Itochu
Technology, Inc., Itochu Techno-Science Corporation, Itochu International, Inc.,
Dell USA L.P., Enron Communications Investments Corp., A.C.E. Investment
Partnership and Xxxxx Xxxxxx (individually an "Existing Institutional Investor"
and collectively the "Existing Institutional Investors"), (ii) Samsung Venture
Investment Corp., Spinnaker Clipper Fund, LP, Spinnaker Crossover Fund, LP,
Spinnaker Crossover Institutional Fund, LP, 000 Xxxxx Xxxxxx Fund L.P. and
Xxxxxxxx Communications, Inc. (individually a "New Institutional Investor" and
collectively the "New Institutional Investors"), (iii) Rein & Co., Inc.,
Xxxxxxxx X. Xxxxxxx, Xxx Xxxxxxx, H & D Investments 97, Xxx XxXxxxxxx, Xxxxxxx
Xxxxx, Xxxxx Xxxxxx as Custodian for the XXX or Xxxxx of Xxxxxxx X. Xxxx, Xxxxx
Xxxxxxx, Xxxxx Xxxxxxx, Xxxxxx Xxxxxxxxx, Xx., Xxxxxx X. Xxxxxxx, Xxxxx X.
Xxxxxx, Xxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxx-Xxxxxxx, Xxxxx
Xxxxxxxxxx, Xxxx Xxxxx, Xxxxxx Xxxx, Xxxx Xxxxxxxxx, Xxxxx Xxxx, Xxxxxxx
Xxxxxxxx and P. Xxxxx Xxxx (individually an "Existing Additional Stockholder"
and collectively the "Existing Additional Stockholders"), (iv) Xxxx Xxxxxxxx,
Xxxxxxxxx Xxxxx, Xxxxx Xxxxxxxxx, Synergy Venture Partners I, L.P. and Xxxxx,
Xxxxxxx & Xxxxxxxxx, LLP, d/b/a: High Street Investors 2000 (individually a "New
Additional Stockholder" and collectively the "New Additional Stockholders"), (v)
those individuals, partnerships, corporations or other entities identified on
Exhibit A hereto as Subsequent Closing Investors (the "Subsequent Closing
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Investors") and (vi) Xxxxx Xxxxxxx, Xxxxxx Xxxxxx and Xxxxx Xxxxxxxx
(individually a "Founder" and collectively the "Founders"). The (i) Existing
Institutional Investors, the New Institutional Investors and the Subsequent
Closing Investors are sometimes referred to in this Agreement as the
"Institutional Investors", (ii) Existing Additional Stockholders and the New
Additional Stockholders are sometimes referred to in this Agreement as the
"Additional Stockholders" and (iii) the Institutional Investors and Additional
Stockholders are sometimes referred to in this Agreement as the "Investors."
BACKGROUND
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WHEREAS, the Founders own 1,925,000 outstanding shares of Common Stock,
$.0001 par value of the Company (the "Common Stock");
WHEREAS, certain of the Investors hold 1,750,000 shares of the Company's
Series A Convertible Preferred Stock, $.01 par value per share (the "Series A
Preferred"), pursuant to a Series A Convertible Preferred Stock Purchase
Agreement, dated November 22, 1996, among the Company, such Investors and
certain of the Founders (the "Series A Purchase Agreement);
WHEREAS, certain of the Investors hold 10,517,000 shares of Series B
Convertible Preferred Stock, $.01 par value per share (the "Series B
Preferred"), pursuant to a Series B Convertible Preferred Stock Purchase
Agreement, among the Company, such Investors and the Founders dated May 14, 1997
as to certain of the Investors and July 31, 1997 as to certain other Investors
(the "Series B Purchase Agreement");
WHEREAS, Nortel holds 5,000,000 shares of Series C Convertible Preferred
Stock, $.01 par value per share (the "Series C Preferred"), pursuant to a Series
C Convertible Preferred Stock Purchase Agreement, dated January 28, 1998, as
amended, between the Company and Nortel (the "Series C Purchase Agreement");
WHEREAS, certain of the Investors hold 5,428,500 shares of Series D
Convertible Preferred Stock, $.01 par value per share (the "Series D
Preferred"), pursuant to a Series D Convertible Preferred Stock Purchase
Agreement, among the Company, such Investors and the Founders dated January 28,
1998 as to certain of the Investors and March 31, 1998 as to certain other
Investors (as amended to date, the "Series D Purchase Agreement");
WHEREAS, certain of the Investors hold 7,185,627 shares of Series E
Convertible Preferred Stock, $.01 par value per share (the "Series E
Preferred"), pursuant to a Series E Convertible Preferred Stock Purchase
Agreement, among the Company, such Investors and the Founders dated September 2,
1999 as to certain of the Investors and October 7, 1999 as to certain other
Investors (as amended to date, the "Series E Purchase Agreement");
WHEREAS, the Company and certain of the Investors have entered into a
Series F Preferred Stock Purchase Agreement of even date herewith (the "Series F
Purchase Agreement") (collectively with the Series A Purchase Agreement, the
Series B Purchase Agreement, the Series C Purchase Agreement, the Series D
Purchase Agreement and the Series E Purchase Agreement, the "Purchase
Agreements") pursuant to which such Investors have purchased shares of the
Company's Series F Convertible Preferred Stock, $.01 par value ("Series F
Preferred") (collectively with the Series A Preferred, the Series B Preferred,
the Series C Preferred, the Series D Preferred and the Series E Preferred, the
"Preferred Stock");
WHEREAS, the Stockholders (as defined in Article 1) wish to provide for,
among other undertakings, (i) their continuing representation on the Board of
Directors of the Company, (ii) certain arrangements with respect to the
registration of shares of capital stock of the Company
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under the Securities Act (as defined in Article 1) and (iii) certain rights with
respect to the sale of any securities of the Company;
WHEREAS, the Company, certain of the Investors and the Founders entered
into a Fourth Amended and Restated Investor Rights Agreement dated as of
September 2, 1999, as amended (the "Prior Investor Rights Agreement");
WHEREAS, the Company, the Investors and the Founders wish to amend and
restate the Prior Investor Rights Agreement in its entirety to make each of the
New Institutional Investors and each of the New Additional Stockholders a party
thereto and to make certain other changes to the terms thereof; and
WHEREAS, the Investors and the Founders who or which have executed this
Agreement are the holders of at least 60% of the voting power of the "Voting
Shares", "Registrable Shares" or "Shares" as each is defined in the Prior
Investor Rights Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, and the consummation of the sale and purchase of
the Series F Preferred pursuant to the Series F Purchase Agreement, and for
other valuable consideration, receipt of which is hereby acknowledged, the
parties hereto agree to amend and restate the Prior Investor Rights Agreement as
follows:
ARTICLE I. DEFINITIONS
A. Certain Definitions. As used in this Agreement, the following
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terms shall have the following respective meanings:
"Affiliate" means, with respect to a specified Person, a Person that,
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directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with, the Person specified; provided
that, with respect to any Institutional Investor, "Affiliate" also means all
mutual funds or other pooled investment vehicles or entities under the control
or management of such Institutional Investor, or the general partner or
investment advisor of such Institutional Investor, or any Affiliate of such
mutual funds, pooled investment vehicles, general partner or investment advisor,
or any other Institutional Investor under the control or management of, or whose
assets are under the control or management of, any such Affiliate.
"Commission" means the United States Securities and Exchange
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Commission, or any other federal agency at the time administering the Securities
Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
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or any similar federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Initial Public Offering:" means the initial public offering of shares
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of Common Stock pursuant to a Registration Statement at a price to the public of
at least $15.00 per share
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(subject to appropriate adjustments for stock splits, stock dividends,
combinations and other similar recapitalizations affecting such shares)
resulting in gross proceeds to the Company (net of all underwriting discounts
and commissions) of at least $25,000,000.
"Person" means, with respect to Article VI, an individual,
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partnership, corporation (including a business trust), joint stock company,
trust, unincorporated association, joint venture or other entity, or government
or any agency or political subdivision thereof.
"Registration Statement" means a registration statement filed by the
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Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"Registration Expenses" means the expenses described in Article II,
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Section 4.
"Registrable Shares" means (i) the shares of Common Stock issued or
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issuable upon conversion of the Shares, (ii) any shares of Common Stock, and any
shares of Common Stock issued or issuable upon the conversion or exercise of any
other securities, acquired by the Investors pursuant to Articles IV or V and
(iii) any other shares of Common Stock issued in respect of such shares (because
of stock splits, stock dividends, reclassifications, recapitalizations, or
similar events); provided, however, that shares of Common Stock which are
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Registrable Shares shall cease to be Registrable Shares (a) upon any sale
pursuant to a Registration Statement or Rule 144 under the Securities Act, (b)
upon any sale in any manner to a person or entity which, by virtue of Article
VII, Section 2, is not entitled to the rights provided by this Agreement or (c)
in the circumstances set forth in Article VII, Section 2. Wherever reference is
made in this Agreement to a request or consent of holders of a certain
percentage of Registrable Shares, the determination of such percentage shall
include shares of Common Stock issuable upon conversion of the Shares even if
such conversion has not yet been effected.
"Securities Act" means the Securities Act of 1933, as amended, or any
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similar federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"Shares" shall mean (i) the shares of Series A Preferred, Series B
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Preferred, Series C Preferred, Series D Preferred, Series E Preferred and Series
F Preferred issued and sold pursuant to the Purchase Agreements and (ii) only
with respect to the provisions of Article V, the shares of Series A Preferred,
Series B Preferred, Series C Preferred, Series D Preferred, Series E Preferred
and Series F Preferred issued and sold pursuant to the Purchase Agreements and
any Voting Shares held by the Founders.
"Stockholders" means the Investors, the Founders and any persons or
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entities to whom the rights granted under this Agreement are transferred by any
Investor or any Founder, their successors or assigns pursuant to Article VII,
Section 2.
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"Voting Shares" means any and all shares of Common Stock, Series A
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Preferred, Series B Preferred, Series C Preferred, Series D Preferred, Series E
Preferred, Series F Preferred and/or shares of capital stock of the Company, by
whatever name called, which carry voting rights (including voting rights which
arise by reason of default) which are now owned or subsequently acquired by a
Stockholder, however acquired, including without limitation shares of capital
stock acquired pursuant to stock splits, stock dividends combinations and other
similar events affecting such shares.
ARTICLE II. VOTING RIGHTS
A. Voting of Shares.
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(a) In any and all elections of directors of the Company (whether at a
meeting or by written consent in lieu of a meeting), each Stockholder shall vote
or cause to be voted all Voting Shares owned by him or it, or over which he or
it has voting control, and otherwise use his or its respective best efforts, so
as to fix the number of directors of the Company at eight (8) until such time as
a majority of the outstanding shares of Series C Preferred Stock are held of
record and beneficially owned by an entity other than Nortel and/or Nortel's
Affiliate(s) collectively (a "Non-Nortel Holder"), and to elect, (i) four (4)
members designated by the holders of a majority of the shares of Common Stock
and Shares then outstanding, on an as converted basis, one of which members
shall be the Chief Executive Officer, so long as he or she holds that office,
(ii) three (3) members designated by the Institutional Investors, one of which
will be designated by each of (x) the Accel Entities, (y) Oak Investment
Partners VII, L.P. and Oak VII Affiliates Fund, L.P. and (z) Brentwood
Associates VII, L.P. and Brentwood Affiliates Fund and (iii) one (1) member
designated by a majority in interest of the holders of Series E Preferred and
approved by the Chief Executive Officer of the Company (which approval shall not
be unreasonably withheld), which member shall be a representative of the holders
of shares of Series E Preferred and shall initially be Xxxxxxx X. Xxxxxxx. Upon
such time as a Non-Nortel Holder holds a majority of the outstanding shares of
Series C Preferred Stock, the number of directors of the Company will be fixed
at nine (9) , and eight (8) members will be elected in accordance with
subsections (i), (ii) and (iii) above and one (1) member designated by the Non-
Nortel Holder and approved by a majority of the other seven members, which
approval shall not be unreasonably withheld.
(b) The Company shall provide the Stockholders with thirty (30) days'
prior written notice of any intended mailing of a notice to Stockholders for a
meeting at which directors are to be elected.
(c) No Revocation. The voting agreements contained herein are coupled
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with an interest and may not be revoked, except by written consent of the
holders of 60% of the Voting Shares held by all Stockholders.
(d) Indemnification. In the event that any director elected pursuant
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to Section 1 of this Article II shall be made or threatened to be made a party
to any action, suit or
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proceeding with respect to which he may be entitled to indemnification by the
Company pursuant to its Certificate of Incorporation or Bylaws, or otherwise, he
shall be entitled to be represented in such action, suit or proceeding by
counsel of his choice and the reasonable expenses of such representation shall
be reimbursed by the Company to the extent provided in or authorized by said
Certificate of Incorporation or By-laws. Each Stockholder agrees not to take any
action to amend any provisions of the Certificate of Incorporation or By-laws of
the Company relating to indemnification of directors, as presently in effect,
without the prior written consent of all of the Stockholders.
(e) Restrictive Legend. All certificates representing Voting Shares
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owned or hereafter acquired by the Stockholders or any transferee of the
Stockholders bound by this Agreement shall have affixed thereto a legend
substantially in the following form:
"The shares of stock represented by this certificate are subject to
certain voting agreements as set forth in an Investor Rights Agreement
by and among the registered owner of this certificate, the corporation
and certain other shareholders of the corporation, a copy of which is
available for inspection at the office of the Secretary of the
corporation."
(f) Transfers of Voting Rights. Any transferee to whom Voting Shares
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are transferred by a Stockholder, whether voluntarily or by operation of law,
shall be bound by the voting obligations imposed upon the transferor under this
Agreement, and shall be entitled to the rights granted to the transferor under
this Agreement, to the same extent as if such transferee were a Stockholder
hereunder.
ARTICLE III. REGISTRATION RIGHTS
1. Required Registrations.
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(a) At any time after (x) August 13, 2002, any Investor or Investors
holding at least 50% of the Registrable Shares or (y) the earlier of one hundred
eighty (180) days subsequent to an Initial Public Offering or ninety (90) days
subsequent to the exercise of the right provided in subparagraph (x) immediately
preceding, each of Nortel and, collectively, the Amerindo Entities, may request,
in writing, that the Company effect the registration (i) on Form S-1 or Form S-2
(or any successor form) of at least 50% of the Registrable Shares owned by
holder(s) having an aggregate offering price of at least $10,000,000 (based on
the then current market price or fair value) or (ii) on Form S-3 (or any
successor form) of Registrable Shares owned by such holder(s) having a minimum
aggregate offering price of at least $2,500,000 (based on the then current
market price or fair value). If the Investor or Investors initiating the
registration intend(s) to distribute the Registrable Shares by means of an
underwriting, such Investors shall so advise the Company in its request. In the
event such registration is underwritten, the rights of other Investors to
participate in such registration shall be conditioned on such Investors'
participation in such underwriting. If any such registration is underwritten,
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the Company in its sole discretion, will select and obtain an underwriter(s) of
nationally recognized standing to administer the offering. Upon receipt of any
such request, the Company shall promptly give written notice of such proposed
registration to all other Investors. Such Investors shall have the right, by
giving written notice to the Company within thirty (30) days after the Company
provides its notice, to elect to have included in such registration such of
their Registrable Shares as such Investors may request in such notice of
election; provided that if the underwriter (if any) managing the offering
determines that, because of marketing factors, all of the Registrable Shares
requested to be registered by all Investors may not be included in the offering,
then all Investors who have requested registration shall participate in the
registration pro rata based upon the number of Registrable Shares which they
have requested to be so registered; and provided further, in the case of a
registration initiated by the Amerindo Entities pursuant to clause (y) of this
paragraph (a), the Registrable Shares held by all Investors other than the
Amerindo Entities requested to be included in such registration shall be subject
to reduction in accordance with the provisions of the preceding clause before
any reduction is made in the number of Registrable Shares to be so included
which were requested to be registered by the Amerindo Entities. In the event
that the number of Registrable Shares requested to be registered by either
Anschutz and/or the Tudor Entities in a registration initiated by the Amerindo
Entities is reduced by more than fifty percent (50%) in accordance with the
provisions of the preceding sentence, Anschutz and/or the Tudor Entities, singly
or jointly, as the case may be, shall be entitled to request, in writing, that
the Company effect the registration on Form S-3 (or any successor form) of
Registrable Shares owned by it or them having a minimum aggregate offering price
of at least $2,500,000 (based on the then current market price or fair value),
and the Registrable Shares held by all Investors other than Anschutz and/or the
Tudor Entities requested to be included in such registration in accordance with
this paragraph (a) shall be subject to reduction in accordance with the
provisions of the preceding sentence before any reduction is made in the number
of Registrable Shares to be so included which were requested to be registered by
Anschutz and/or the Tudor Entities. Thereupon, the Company shall, as
expeditiously as possible, use its reasonable best efforts to effect within
ninety (90) days of receipt of such request the registration on Form S-1, Form
S-2 or Form S-3 (or any successor form) of all Registrable Shares which the
Company has been requested to so register.
(b) The Company shall not be required to effect more than two (2)
registrations pursuant to clause (x) and three (3) registrations pursuant to
clause (y) of paragraph (a) of Section 1 of this Article III (for a total of
five registrations); provided, however, that such obligation shall be deemed
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satisfied only when a registration statement covering the applicable Registrable
Shares shall have (i) become effective and, if such method of disposition is a
firm commitment underwritten public offering, all such Registrable Shares have
been sold pursuant thereto, or (ii) been (x) withdrawn at the request of the
Investor(s) requesting such registration (other than as a result of information
concerning the business or financial condition of the Company which is made
known to the Investor(s) after the date on which such registration was
requested) and (y) such Investor(s) has (have) not elected not to have such
registration counted, and pay its pro rata portion of the Registration Expenses
of such registration, pursuant to Article III, Section 4. In addition, the
Company shall not be required to effect any registration within one hundred
eighty (180) days after the effective date of any other Registration Statement
on Form S-
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1 or S-3 involving an underwritten offering of the Company and the Company shall
not be required to file more than one Registration Statement on Form S-3 in any
one (1) year period.
(c) In the case of a request to register Registrable Shares pursuant
to this Article III, Section 1 which is not subject to the restrictions set
forth in Section 8 of this Article III, neither the Company nor the Investors
shall effect any sale or distribution (except that a distribution to a partner,
stockholder or affiliate of the Company or an Investor shall be permitted),
including any private placement or any sale pursuant to Rule 144 or Rule 144A,
of any Registrable Shares, or other equity of the Company (other than
Registrable Shares included in such registration and any shares acquired in
connection with the Company's initial public offering of Common Stock or in the
open market following the effectiveness of the Company's first Registration
Statement covering Common Stock to be sold on its behalf to the public in an
underwritten offering) during the 7-day period prior to and the 90-day period
(or such other period agreed to by the managing underwriter (if any)) following,
the effective date of the Registration Statement in such registration.
(d) Notwithstanding subsection (c) of Section 1 of this Article III,
if at the time of any request to register Registrable Shares pursuant to this
Article III, Section 1, the Company is engaged or has plans to engage within one
hundred twenty (120) days of the time of the request in a registered public
offering of securities for its own account or is engaged in any other activity
which, in the good faith determination of a majority of the Company's Board of
Directors, would be adversely affected by the requested registration to the
material detriment of the Company, then the Company may at its option direct
that such request be delayed for a period not in excess of one hundred twenty
(120) days from the effective date of such offering or the date of commencement
of such other material activity, as the case may be, but in no event shall such
delay exceed one hundred fifty (150) days from the time of any such request, and
such right to delay a request shall not be exercised by the Company more than
once in any 18-month period.
2. Incidental Registration.
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(a) Whenever the Company proposes to file a Registration Statement at
any time and from time to time, it will, prior to such filing, give written
notice to all Investors of its intention to do so and, upon the written request
of such Investor(s) given within thirty (30) days after the Company provides
such notice (which request shall state the intended method of disposition of
such Registrable Shares), the Company shall use its reasonable best efforts to
cause all Registrable Shares which the Company has been requested by such
Investor(s) to register to be registered under the Securities Act to the extent
necessary to permit their sale or other disposition in accordance with the
intended methods of distribution specified in the request of such Investor(s);
provided, however, that the Company shall have the right to postpone or withdraw
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any registration effected pursuant to this Article III, Section 2 without
obligation to any Investor.
(b) In connection with any registration under this Article III,
Section 2 involving an underwriting, the Company shall not be required to
include any Registrable Shares in such registration unless the holders thereof
accept the terms of the underwriting as agreed
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upon between the Company and the underwriters selected by it. If in the opinion
of the managing underwriter it is desirable because of marketing factors to
limit the number of Registrable Shares to be included in the offering, then the
Company shall be required to include in the registration only that number of
Registrable Shares, if any, which the managing underwriter believes should be
included therein; provided, however, that no persons or entities other than the
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Company, the Investors and other persons or entities holding registration rights
shall be permitted to include securities in the offering and provided further
that no other person or entities holding registration rights shall be entitled
to include any securities in the offering until, and only to the extent that,
all Registrable Securities that the Investors have requested to be included are
so included. If the number of Registrable Shares to be included in the offering
in accordance with the foregoing is less than the total number of shares which
the Investors have requested to be included, then the Investors who have
requested registration shall participate in the registration pro rata based upon
their total ownership of shares of Common Stock (giving effect to the conversion
into Common Stock of all securities convertible thereunto). If any holder (in
the case of more than one Investor) would thus be entitled to include more
securities than such holder requested to be registered, the excess shall be
allocated among other requesting holders pro rata in the manner described in the
preceding sentence.
3. Registration Procedures. If and whenever the Company is required by
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the provisions of this Agreement to use its reasonable best efforts to effect
the registration of any of the Registrable Shares under the Securities Act, the
Company shall:
(a) File with the Commission a Registration Statement with respect to
such Registrable Shares and use its reasonable best efforts to cause that
Registration Statement to become and remain effective;
(b) As expeditiously as possible prepare and file with the Commission
any amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of the Registrable Shares covered
by such Registration Statement, in the case of a firm commitment underwritten
public offering, until each underwriter has completed the distribution of all
securities purchased by it and, in the case of any other offering, until the
earlier of the sale of all Registrable Shares covered thereby or one hundred
eighty (180) days after the effective date thereof;
(c) As expeditiously as possible furnish to each selling Investor(s)
such reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the selling Investor may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares owned
by the selling Investor(s);
(d) As expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Investor(s) shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Investor(s) to consummate the
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public sale or other disposition in such states of the Registrable Shares owned
by the selling Investor(s); provided, however, that the Company shall not be
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required in connection with this paragraph (d) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction;
(e) Notify each holder of Registrable Shares covered by such
Registration Statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act or the happening of any event
as a result of which the prospectus included in such Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;
(f) Cause all such Registrable Shares registered hereunder to be
listed on each securities exchange on which similar securities issued by the
Company are then listed; and
(g) Provide a transfer agent and registrar for all Registrable Shares
registered hereunder and a CUSIP number for all such Registrable Shares, in each
case not later than the effective date of such registration.
If the Company has delivered preliminary or final prospectuses to the
selling Investor(s) and after having done so the prospectus is amended to comply
with the requirements of the Securities Act, the Company shall promptly notify
the selling Investor(s) and, if requested, the selling Investor(s) shall
immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide each selling
Investor(s) with revised prospectuses and, following receipt of the revised
prospectuses, the selling holder shall be free to resume making offers of the
Registrable Shares.
4. Allocation of Expenses. The Company will pay all Registration Expenses
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(defined below) of all registrations under this Agreement; provided, however,
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that if a registration under Article III, Section 1(a)(i) or (ii) is withdrawn
at the request of the selling Investor(s) requesting such registration (other
than as a result of information concerning the business or financial condition
of the Company which is made known to the selling Investor(s) after the date on
which such registration was requested) and if the requesting Investor(s) elects
not to have such registration counted as a registration requested under Article
III, Section 1(a)(i) or (ii), the requesting Investor(s) shall pay the
Registration Expenses of such registration pro rata in accordance with the
number of their Registrable Shares included in such registration. For purposes
of this Article III, Section 4, the term "Registration Expenses" shall mean all
expenses incurred by the Company in complying with the provisions of this
Article III including, without limitation, all registration and filing fees,
exchange listing fees, printing expenses, fees and expenses of counsel for the
Company, fees and expenses of an accountant for the Company and the fees and
expenses of one counsel selected by the selling Investor(s) and state Blue Sky
fees and expenses, but excluding underwriting discounts, selling commissions,
and the fees and expenses of selling Investor(s)' own counsel (other than the
one counsel selected to represent all selling Investor(s)).
10
5. Indemnification and Contribution.
--------------------------------
(a) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless the seller of such Registrable Shares, each underwriter of
such Registrable Shares, and each other person, if any, who controls such seller
or underwriter within the meaning of the Securities Act or the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to which
such seller, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any Registration
Statement under which such Registrable Shares were registered under the
Securities Act, any preliminary prospectus or final prospectus contained in the
Registration Statement, or any amendment or supplement to such Registration
Statement, (ii) arise out of or are based upon the omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) any violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state
securities law; and the Company will pay to each such seller, underwriter and
each such controlling person as incurred, any legal or any other expenses
reasonably incurred by such seller, underwriter or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
-------- -------
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement or omission made in such
Registration Statement, preliminary prospectus or final prospectus, or any such
amendment or supplement, in reliance upon and in conformity with information
furnished to the Company, in writing, by or on behalf of such seller,
underwriter or controlling person specifically for use in the preparation
thereof.
(b) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, each seller of Registrable
Shares, severally and not jointly, will indemnify and hold harmless the Company,
each of its directors and officers and each underwriter (if any) and each
person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company, such directors
and officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information relating to such seller furnished in writing
to the Company by or on behalf of such seller specifically for use in connection
with the preparation of such Registration Statement,
11
prospectus, amendment or supplement; provided, however, that the obligations of
-------- -------
such sellers of Registrable Shares hereunder shall be limited to an amount equal
to the net proceeds to each seller from the Registrable Shares sold in
connection with such registration.
(c) Each party entitled to indemnification under this Article III,
Section 5 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has received notice of the commencement of any action for any
claim as to which indemnity may be sought, and shall permit the Indemnifying
Party to assume the defense of any such claim or any litigation resulting
therefrom if the Indemnifying Party acknowledges in writing its obligation to
indemnify; provided, that counsel for the Indemnifying Party, who shall conduct
--------
the defense of such claim or litigation, shall be approved by the Indemnified
Party (whose approval shall not be unreasonably withheld); 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
Article III, Section 5 unless the failure to give notice to the Indemnifying
Party is prejudicial to the Indemnifying Party's ability to defend such claim or
litigation. Notwithstanding the foregoing, the failure to give notice shall not
relieve the Indemnifying Party of any liability that it may have to any
Indemnified Party otherwise than under this Article III, Section 5. The
Indemnified Party may participate in such defense at such party's expense;
provided, however, that the Indemnifying Party shall pay such expense 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 the Indemnified Party and any other party represented by such
counsel in such proceeding. 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 of such
claim or litigation, and no Indemnified Party shall consent to entry of any
judgment or settle such claim or litigation without the prior written consent of
the Indemnifying Party, which consent shall not be unreasonably withheld.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Registrable Shares exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Article III, Section 5 but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Article III, Section 5 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of any such
selling holder or any such controlling person in circumstances for which
indemnification is provided under this Article III, Section 5; then, in each
such case, the Company and such holder will contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after contribution
from others) in such proportions as is appropriate to reflect the relative fault
of the indemnified 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
12
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, however, that, in any such case, (A) no such holder will be required
-------- -------
to contribute any amount in excess of the proceeds to it of all Registrable
Shares sold by it pursuant to such Registration Statement, and (B) no person or
entity guilty of fraudulent misrepresentation, within the meaning of Section
11(f) of the Securities Act, shall be entitled to contribution from any person
or entity who is not guilty of such fraudulent misrepresentation.
6. Indemnification with Respect to Underwritten Offerings. In the event
------------------------------------------------------
that Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering pursuant to Article III, Section 1, the Company agrees to
enter into an underwriting agreement containing customary representations and
warranties with respect to the business and operations of an issuer of the
securities being registered and customary covenants and agreements to be
performed by such issuer, including without limitation customary provisions with
respect to indemnification by the Company of the underwriters of such offering.
7. Information by Holder. Each Investor including Registrable Shares in
---------------------
any registration 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 required in connection with any
registration, qualification or compliance referred to in this Agreement.
8. "Stand-Off" Agreement. Each Investor, if requested by the Company and
---------------------
the managing underwriter of an offering by the Company of Common Stock or other
securities of the Company pursuant to a Registration Statement, shall agree not
to sell publicly or otherwise transfer or dispose of any Registrable Shares or
other securities of the Company held by such Investor for a specified period of
time (as negotiated between the Company and the managing underwriter not to
exceed one hundred eighty (180) days) following the effective date of such
Registration Statement; provided, that:
--------
(a) Such agreement shall only apply to the first Registration
Statement covering Common Stock to be sold on its behalf to the public in an
underwritten offering and shall not apply to any shares acquired in such
offering (other than those acquired pursuant to Section 1 of Article IV hereof)
or to any shares acquired in the open market following such offering; and
(b) All stockholders of the Company holding not less than the number
of such shares of Common Stock held by such Investor (including shares of Common
Stock issuable upon the conversion of the Shares, or other convertible
securities, or upon the exercise of options, warrants or rights) and all
officers and directors of the Company enter into or are bound by similar
agreements.
13
Such agreement shall be in writing in a form reasonably satisfactory
to the Company and such underwriter. The Company may impose stop-transfer
instructions with respect to the Registrable Shares or other securities subject
to the foregoing restriction until the end of the stand-off period.
9. Limitations on Subsequent Registration Rights. The Company shall not,
---------------------------------------------
without the prior written consent of the Investors holding at least sixty
percent (60%) of the Registrable Shares, enter into any agreement (other than
this Agreement) with any holder or prospective holder of any securities of the
Company which would allow such holder or prospective holder (a) to include
securities of the Company in any Registration Statement, unless under the terms
of such agreement, such holder or prospective holder may include such securities
in any such registration only on terms subordinate to the terms on which such
Investors may include their respective shares in such registration, or (b) to
make a demand registration which could result in such registration statement
being declared effective prior to the earlier of August 13, 2002 or one hundred
eighty (180) days subsequent to an Initial Public Offering.
10. Rule 144 Requirements. After the earliest of (a) the closing of the
---------------------
sale of securities of the Company pursuant to a Registration Statement, (b) the
registration by the Company of a class of securities under Section 12 of the
Exchange Act, or (c) the issuance by the Company of an offering circular
pursuant to Regulation A under the Securities Act, the Company agrees to:
(i) Comply with the requirements of Rule 144(c) under the Securities
Act with respect to current public information about the Company;
(ii) Use its best efforts to 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); and
(iii) Furnish to any holder of Registrable Shares upon request (A) a
written statement by the Company as to its compliance with the requirements of
said Rule 144(c), and the reporting requirements of the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), (B) a copy of the most recent annual or quarterly report of the
Company, and (C) such other reports and documents of the Company as such holder
may reasonably request to avail itself of any similar rule or regulation of the
Commission allowing it to sell any such securities without registration.
11. Mergers, Etc. The Company shall not, directly or indirectly, enter
------------
into any merger, consolidation or reorganization in which the Company shall not
be the surviving corporation unless the proposed surviving corporation shall,
prior to such merger, consolidation or reorganization, agree in writing to
assume the obligations of the Company under this Agreement, and for that purpose
references hereunder to "Registrable Shares" shall be deemed to be references to
the securities which the Investors would be entitled to receive in exchange for
Registrable Shares under any such merger, consolidation or reorganization;
provided, however, that the provisions of this Article III, Section 11 shall not
-------- -------
apply in the event of any merger,
14
consolidation or reorganization in which the Company is not the surviving
corporation if all holders are entitled to receive in exchange for their
Registrable Shares consideration consisting solely of (a) cash, (b) securities
of the acquiring corporation which may be immediately sold to the public without
registration under the Securities Act (including pursuant to Rule 144 and/or
Rule 145 promulgated thereunder), or (c) securities of the acquiring corporation
which the acquiring corporation has agreed to register within ninety (90) days
of completion of the transaction for resale to the public pursuant to the
Securities Act.
ARTICLE IV. RIGHT OF FIRST REFUSAL ON SALES
OF SECURITIES BY THE COMPANY
1. Right of First Refusal
----------------------
(a) The Company shall not issue, sell or exchange, agree to issue,
sell or exchange, or reserve or set aside for issuance, sale or exchange, (i)
any shares of its Common Stock, (ii) any other equity securities of the Company,
including, without limitation, shares of preferred stock, (iii) any option,
warrant or other right to subscribe for, purchase or otherwise acquire any
equity securities of the Company, or (iv) any debt securities convertible into
capital stock of the Company (collectively, the "Offered Securities"), unless in
each such case the Company shall have first complied with this Agreement. The
Company shall deliver to the Institutional Investors a written notice of any
proposed or intended issuance, sale or exchange of Offered Securities (the
"Offer"), which Offer shall (i) state that it has received a bona fide offer to
purchase Offered Securities, (ii) identify and describe the Offered Securities,
(iii) describe the price and other terms upon which they are to be issued, sold
or exchanged, and the number or amount of the Offered Securities to be issued,
sold or exchanged, (iv) identify the persons or entities, if known, to which or
with which the Offered Securities are to be offered, issued, sold or exchanged,
and (v) offer to issue and sell to or exchange with each Institutional Investor
its or his/her pro rata share of the Offered Securities. The amount of Offered
Securities to be offered by the Company to each Institutional Investor for
issuance, sale or exchange shall be determined as follows: (A) each
Institutional Investor may subscribe for an amount of the Offered Securities in
proportion to the amount that the number of Voting Shares or, in the case of an
Offer which is an underwritten public offering pursuant to an effective
registration statement under the Securities Act, shares of Series D Preferred,
Series E Preferred and Series F Preferred (plus any shares of Common Stock into
which shares of Series D Preferred, Series E Preferred and Series F Preferred
Stock have been converted), then held by such Institutional Investor bears to
the total number of Voting Shares then outstanding on a fully-diluted basis
(assuming the conversion of all outstanding convertible securities, the exercise
of all options, warrants or other rights to acquire Voting Shares or securities
convertible into Voting Shares and the issuance of any securities reserved for
issuance to officers, directors and employees of the Company or any subsidiary
pursuant to any plan, agreement or arrangement approved by the Board of
Directors of the Company) (the "Basic Amount"), and (B) such additional amount
of the Offered Securities as such Institutional Investor indicates it will
purchase or acquire should other Institutional Investors acquire less than their
respective Basic Amounts (the "Undersubscription Amount"). Each Institutional
Investor shall have the right, for a period of thirty (30) days following
delivery
15
of the Offer, to purchase or acquire, at the price and upon the other terms
specified in the Offer, the number or amount of Offered Securities described
above. The Offer by its term shall remain open and irrevocable for such 30-day
period.
(b) To accept an Offer, in whole or in part, an Institutional Investor
shall deliver a written notice to the Company prior to the end of the 30-day
period of the Offer, setting forth the portion of the Institutional Investor's
Basic Amount that such Institutional Investor elects to purchase and, if such
Institutional Investor shall elect to purchase all of its Basic Amount, the
Undersubscription Amount (if any) that such Institutional Investor elects to
purchase (the "Notice of Acceptance"). If the Basic Amounts subscribed for by
all Institutional Investors are less than the aggregate Basic Amounts offered to
all Institutional Investors (the "Aggregate Basic Amounts") then, each
Institutional Investor who has set forth Undersubscription Amounts in its Notice
of Acceptance shall be entitled to purchase, in addition to the Basic Amounts
subscribed for, all Undersubscription Amounts it has subscribed for; provided,
--------
however, that should the Undersubscription Amounts subscribed for exceed the
-------
difference between (a) the Offered Securities and (b) the Basic Amounts
subscribed for (the "Available Undersubscription Amount"), each Institutional
Investor who has subscribed for any Undersubscription Amount shall be entitled
to purchase only that portion of any Available Undersubscription Amount as the
Undersubscription Amount subscribed for by such Institutional Investor bears to
the total Undersubscription Amounts subscribed for by all Institutional
Investors, subject to rounding by the Board of Directors to the extent it
reasonably deems necessary.
(c) Notwithstanding any other provision of this Article IV, Section 1,
in the case of an Offer which relates to an underwritten public offering
pursuant to an effective registration statement under the Securities Act, (i)
the Company shall deliver to the Institutional Investors a copy of such
registration statement and a written notice of the proposed Offer which shall
(x) state the date on or about which the Registration Statement is expected to
become effective, (y) describe the price range in which the Offered Securities
are expected to be offered, such price range to be no greater than 20% above and
20% below the price range set forth in the preliminary prospectus included in
such registration statement, and (z) offer to sell to each Institutional
Investor its or his/her pro rata share of the Offered Securities, and (ii) the
allocation of shares to the Institutional Investors shall in all cases be
subject to compliance with all applicable rules and regulations of, and, if
necessary, approval by, the National Association of Securities Dealers, Inc. and
any other law, rule or regulation applicable to such underwritten public
offering. Each Institutional Investor shall have the right, for a period of ten
(10) days following delivery of the Offer, to agree to purchase, at the price
and upon the terms on which the Offered Securities are to be offered pursuant to
such registration statement, the number or amount of Offered Securities
described above. The Offer by its terms shall remain open and irrevocable for
such ten (10) day period. To accept an offer, in whole or in part, an
Institutional Investor shall provide written notice in accordance with the
provisions of subsection (b) of this Section 1 prior to the end of the 10-day
period. In the event of a change in the proposed price range of the Offered
Securities outside of the range set forth in the first sentence of this
paragraph, the Company shall provide each Institutional Investor with an
additional notice of any
16
such change and such Institutional Investor shall have twenty-four (24) hours to
indicate its election to purchase such Offered Securities upon such terms and
conditions.
(d) The Company shall have ninety (90) days from the expiration of the
period set forth in Article IV, Section 1(a) to issue, sell or exchange all or
any part of such Offered Securities as to which a Notice of Acceptance has not
been given by the Institutional Investors (the "Refused Securities"), but only
upon terms and conditions (including, without limitation, unit prices and
interest rates) which are not more favorable, to the acquiring person or persons
or less favorable to the Company than those set forth in the Offer.
(e) Upon the closing of the issuance, sale or exchange of all or less
than all the Offered Securities as to which a Notice of Acceptance has been
given by the Institutional Investors and the Refused Securities, the
Institutional Investors shall acquire from the Company, and the Company shall
issue to such Institutional Investors, the number or amount of Offered
Securities specified in their respective Notices of Acceptance, and the
Undersubscription Amount of Offered Securities made available to the
Institutional Investors pursuant to subsection (b) of this Article IV, Section
1, upon the terms and conditions specified in the Offer. The purchase by the
Institutional Investors of any Offered Securities is subject in all cases to the
preparation, execution and delivery by the Company and such Institutional
Investors of a purchase agreement relating to such Offered Securities reasonably
satisfactory in form and substance to such Institutional Investors and their
respective counsel.
(f) Any Offered Securities not acquired by the Institutional Investors
or other persons in accordance with Article IV, Sections l(b), (c) and (d) may
not be issued, sold or exchanged until they are again offered to the
Institutional Investors under the procedures specified in this Article.
2. Excluded Issuances. The rights of the Institutional Investors under
------------------
this Article IV shall not apply to:
(a) Common Stock issued as a stock dividend to holders of Common Stock
or upon any subdivision or combination of shares of Common Stock;
(b) The issuance of any shares of Common Stock upon conversion of
outstanding shares of convertible preferred stock;
(c) Up to 14,276,250 shares of Common Stock, or options exercisable
therefor, including options outstanding on the date of this Agreement (such
number to be proportionately adjusted in the event of any stock splits, stock
dividends, recapitalizations or similar events occurring on or after the date of
this Agreement) issuable to officers, directors and employees of the Company or
any subsidiary pursuant to any plan, agreement or arrangement approved by the
Board of Directors of the Company;
17
(d) Securities issued solely in consideration for the acquisition
(whether by merger or otherwise) by the Company or any of its subsidiaries of
all or substantially all of the stock or assets of any other entity;
(e) In the case of the Xxxxxx Master Trust, a "Dilutive Issuance"
under Article FOURTH, C, 5(a)(ii) of the Company's Certificate of Incorporation,
as amended;
(f) Securities issued to lending or leasing institutions pursuant to
an agreement approved by the Board of Directors of the Company;
(g) Up to 275,000 shares of Series B Preferred (and 275,000 shares of
Common Stock should such Series B Preferred be converted) (such number to be
proportionately adjusted in the event of any stock splits, stock dividends,
recapitalizations or similar events occurring on or after the date of this
Agreement) issuable to Comdisco in connection with lease and loan and related
warrant agreements, all dated June 25, 1997 between the Company and Comdisco; or
(h) The shares of Series F Preferred authorized on the date hereof and
sold at each of the Subsequent Closings (as such term is defined in the Series F
Purchase Agreement).
3. Waiver. Each Investor hereby waives its right to purchase any Series F
------
Preferred, and any related notice right, pursuant to its right under the Prior
Investor Rights Agreement.
ARTICLE V. SALE BY THE FOUNDERS RIGHT OF
FIRST REFUSAL AND CO-SALE AGREEMENT
1. Restrictions on Transfer.
------------------------
(a) Any sale or other disposition of any Voting Shares by a Founder,
other than according to the terms of this Agreement shall be void and transfer
no right, title or interest in or to any of such Voting Shares to the purported
transferee.
(b) Each Founder agrees to present the certificates representing the
Voting Shares presently owned or hereafter acquired by him to the Secretary of
the Company and cause the Secretary to stamp on the certificate in a prominent
manner the following legend:
"The sale or other disposition of any of the shares represented by
this certificate is restricted by an Investor Rights Agreement by and
among certain of the shareholders of this corporation and this
corporation (the "Agreement"). A copy of the Agreement is available
for inspection during normal business hours at the office of the
Secretary of the corporation."
2. Transfers Not Subject to Restrictions.
-------------------------------------
18
(a) Subject to Section 2 of Article VI, any Founder may sell, assign
or transfer Voting Shares to (i) his spouse, non-minor children (natural or
adopted), non-minor siblings or parents, or to a trust established for the
benefit of his spouse, children (natural or adopted), siblings, parents or
himself, or dispose of them under his will, or (ii) the other Founders, without
compliance with Sections 3 and 5 of this Article V; provided that the transferee
provides the Company and each of the Institutional Investors with a written
agreement to be bound hereby to the same extent as the transferring Founder.
(b) The rights of the Institutional Investors under Section 4 of this
Article V shall not apply to any pledge of Voting Shares by a Founder which
creates a mere security interest, provided the pledgee provides the Company with
a written agreement to be bound hereby to the same extent as the pledging
Founder.
3. Offer of Sale; Notice of Proposed Sale.
--------------------------------------
If any Founder desires to sell, transfer or otherwise dispose of any of his
Voting Shares, or of any interest in such Voting Shares, whether voluntarily or
by operation of law, in any transaction other than pursuant to Section 2 of this
Article V, such Founder (the "Selling Founder") shall first deliver written
notice of his desire to do so (the "Notice") to the Company and each of the
Institutional Investors, in the manner prescribed in Section 6 of Article VII.
The Notice must specify: (i) that the Selling Founder has received a bona fide
offer to purchase Voting Shares and the name and address of the party that made
such offer (the "Offeror"), (ii) the number of Voting Shares the Selling Founder
proposes to sell or otherwise dispose of (the "Offered Shares"), (iii) the
consideration per Voting Share to be delivered to the Selling Founder for the
proposed sale, transfer or disposition, and (iv) all other material terms and
conditions of the proposed transaction.
4. Company Option to Purchase.
--------------------------
(a) Subject to Section 6(a) of this Article V, the Company shall have
the first option to purchase all or any part of the Offered Shares for the
consideration per share and on the terms and conditions specified in the Notice.
The Company must exercise such option, no later than thirty (30) days after such
Notice is deemed under Section 6 of Article VII to have been delivered to it, by
written notice to the Selling Founder.
(b) In the event the Company does not exercise its option within such
30-day period with respect to all of the Offered Shares, the Secretary of the
Company shall, by the last day of such period, give written notice of that fact
to the Institutional Investors (the "Investor Notice"). The Investor Notice
shall specify the number of Offered Shares not purchased by the Company (the
"Remaining Shares").
(c) In the event the Company duly exercises its option to purchase all
or part of the Offered Shares, the closing of such purchase shall take place at
the offices of the Company five (5) days after the expiration of such 30-day
period.
19
(d) To the extent that the consideration proposed to be paid by the
Offeror for the Offered Shares consists of property other than cash or a
promissory note, the consideration required to be paid by the Company and/or the
Institutional Investors exercising their options under Section 4 and 5 of this
Article V may consist of cash equal to the value of such property, as determined
in good faith by agreement of the Selling Founder and the Company and/or the
Institutional Investors acquiring such Offered Shares.
(e) Notwithstanding anything to the contrary herein, neither the
Company nor the Institutional Investors shall have any right to purchase any of
the Offered Shares hereunder unless the Company and/or the Institutional
Investors exercise their respective option to purchase all of the Offered
Shares.
5. Institutional Investor's Option to Purchase and Institutional
-------------------------------------------------------------
Investors' Co-Sale Right.
------------------------
(a) Subject to Section 6(a) of this Article V, each Investor shall
have an option, exercisable for a period of thirty (30) days from the date of
delivery of the Investor Notice, to purchase all or a portion of his or its pro
rata share (subject to adjustment pursuant to Section 5(b) of this Article V),
according to the number of Voting Shares owned by such Institutional Investor in
relation to the total number of Voting Shares outstanding at such time, of the
Remaining Shares for the consideration per share and on the terms and conditions
set forth in the Investor Notice. Such option shall be exercised by delivery of
written notice to the Secretary of the Company.
(b) In the event options to purchase have been exercised by the
Institutional Investors with respect to some but not all of the portion of the
Remaining Shares for which they have the right to purchase pursuant to Section
5(a), each Institutional Investor who has exercised his or its option to
purchase all of his or its respective pro rata shares within the 30-day period
specified in Section 5(a) shall have an additional option, for a period of five
(5) business days next succeeding the expiration of such 30-day period, to
purchase all or any part of such balance of such Remaining Shares on the terms
and conditions set forth in the Investor Notice, which option shall be exercised
by the delivery of written notice to the Secretary of the Company. In the event
there are two or more such Institutional Investors that choose to exercise the
last-mentioned option for a total number of Voting Shares in excess of the
number available, the Remaining Shares available for each such Institutional
Investor's option shall be allocated to such Institutional Investor pro rata
based on the number of Voting Shares owned by the Institutional Investor so
electing in relation to the total number of Voting Shares outstanding at such
time.
(c) If the option to purchase the Remaining Shares is exercised in
full by the Institutional Investor(s), the closing of the purchase of the
Remaining Shares shall take place at the offices of the Company no later fifteen
(15) days after the exercise of such purchase option(s) by the Institutional
Investor(s).
(d) Alternatively, each Institutional Investor may within 30 days of
the effective date of the Investor Notice notify the Secretary of the Company of
his or its desire to
20
participate in the sale of Voting Shares held by him or it on the terms set
forth in the Investor Notice, and the number of Voting Shares he or it wishes to
sell.
6. Failure to Fully Exercise Options Co-Sale.
-----------------------------------------
(a) If the Company and the Institutional Investors do not exercise
their options to purchase all of the Offered Shares within the periods described
in this Agreement (the "Option Period"), then all options of the Company and the
Institutional Investors to purchase the Offered Shares, whether exercised or
not, shall terminate, but each Institutional Investor which has, pursuant to
Section 5 of this Article V, expressed a desire to sell Voting Shares in the
transaction (a "Participating Investor"), shall be entitled to do so pursuant to
this Section. The Secretary of the Company shall promptly, on expiration of the
Option Period, notify the Selling Founder of the aggregate number of Voting
Shares the Participating Investors wish to sell. The Selling Founder shall use
his best efforts to interest the Offeror in purchasing, in addition to the
Offered Shares, the Voting Shares the Participating Investors wish to sell. If
the Offeror does not wish to purchase all of the Voting Shares made available by
the Selling Founder and the Participating Investors, then each Participating
Investor and the Selling Founder shall be entitled to sell, at the price and on
the terms and conditions set forth in the Notice, a portion of the Voting Shares
being sold to the Offeror, in the same proportion as such Selling Founder or
Participating Investor's ownership of Voting Shares bears to the aggregate
number of Voting Shares owned by the Selling Founder and the Participating
Investors. If, however, as a result of such proration, Nortel shall own less
than ten percent (10%) of the Voting Shares on a fully diluted basis, the
Selling Founder and the other Participating Investors shall, upon request by
Nortel, reduce their respective portions of Voting Shares (on a pro rata basis)
proposed to be sold, such that Nortel is able to have all of its Voting Shares
purchased by the Offeror or such lower amount that the Offeror has offered to
purchase. The transaction contemplated by the Notice shall be consummated not
later than sixty (60) days after the expiration of the Option Period.
(b) If the Participating Investors do not elect to sell the full
number of Voting Shares which they are entitled to sell pursuant to Section
6(a), the Selling Founder shall be entitled to sell to the Offeror, according to
the terms set forth in the Notice, that number of his own Voting Shares which
equals the difference between the number of Voting Shares desired to be
purchased by the Offeror and the number of Voting Shares the Participating
Investors wish to sell. If the Selling Founder wishes to sell, transfer or
otherwise dispose of any such Voting Shares at a price per Voting Share which
differs from that set forth in the Notice, upon terms different from those
previously offered to the Institutional Investors, or more than sixty (60) days
after the expiration of the Option Period, as a condition precedent to such
transaction, such Voting Shares must first be offered to the Investors on the
same terms and procedures and time periods set forth above.
(c) The proceeds of any sale made by the Selling Founder without
compliance with the provisions of this Section 6 shall be deemed to be held in
constructive trust in such amount as would have been due the Participating
Investors if the Selling Founder had complied with this Agreement.
21
7. Other Rights Not Affected. Notwithstanding any provision in this
-------------------------
Article V to the contrary, nothing in this Article V shall limit any right of
the Company to repurchase any shares from a Founder or employee which have not
yet vested pursuant to the terms of any other agreement between the Company and
such Founder or employee.
22
ARTICLE VI. CERTAIN OTHER RIGHTS AND RESTRICTIONS
1. Rights to Compel Sale. (a) Stockholders holding at least sixty
---------------------
percent (60%) of the Voting Shares of the Company (the "Compelling
----------
Stockholders") shall have the right in connection with the proposed sale of
------------
their Shares ("Compelling Securities") pursuant to a bona fide offer (a
---------------------
"Compelled Sale Offer") by a third party (a "Compelled Sale Purchaser"), to
-------------------- ------------------------
require Nortel to sell all, or its pro rata share (based on the number of Shares
then being sold by the Compelling Stockholders), of the Shares then held by
Nortel (the "Compelled Securities," and together with the Compelling Securities,
--------------------
the "Compelled Sale Securities"), to the Compelled Sale Purchaser, for the same
-------------------------
consideration per Share (the "Compelled Sale Offer Price") and otherwise on the
--------------------------
same terms and conditions upon which the Compelling Stockholders sell their
Compelling Securities.
(b) If the Compelling Stockholders elect to exercise their right to
compel sale pursuant to this Section 1, a representative selected by the
Compelling Stockholders (the "Representative") shall deliver written notice (the
--------------
"Compelled Sale Notice") of the Compelled Sale Offer to Nortel and to the
---------------------
Company, setting forth the Compelled Sale Offer Price, the identity of the
Compelled Sale Purchaser and the other terms and conditions thereof.
Not less than ten (10) business days prior to the proposed date of any
sale pursuant to a Compelled Sale Offer (the "Compelled Sale Transfer Date"),
----------------------------
which date shall not be less than ten (10) business days after delivery of the
Compelled Sale Notice, the Representative shall notify the Company and Nortel of
the Compelled Sale Transfer Date. Nortel shall deliver to the Company in escrow
(pending the consummation of the sale pursuant to the Compelled Sale Offer), not
less than two (2) business days before the Compelled Sale Transfer Date, the
duly endorsed stock certificates representing all of the Compelled Securities
owned by Nortel, together with any documentation reasonably required by the
Company and/or the Compelled Sale Purchaser to sell such Compelled Securities
pursuant to the terms of the Compelled Sale Offer; provided, that Nortel shall
--------
have, as a condition to the sale pursuant to the Compelled Sale Offer, the right
to receive all documentation relating to the sale of the Compelled Sale
Securities at least ten (10) business days prior to the Compelled Sale Transfer
Date.
The Compelling Stockholders shall have 90 days from the date the
Compelled Sale Notice is delivered to Nortel to execute a binding purchase
agreement with respect to the sale contemplated by the Compelled Sale Offer and
shall consummate the transactions contemplated thereby within 30 days of receipt
of all requisite governmental and regulatory approvals and requisite third party
consents applicable to any of the holders of Compelled Sale Securities and/or
the Company. Immediately after completion of any such sale pursuant to this
Section 1, the Representative shall notify the Company and Nortel of such
completion and shall furnish such evidence of such sale (including time of
completion) and of the terms thereof as the Company or Nortel may request. The
Representative shall also remit to Nortel the proceeds of such sale attributable
to the sale of Nortel's Compelled Securities immediately upon receipt thereof.
The Company shall, upon being notified of the consummation of such sale, remit
to Nortel a new stock certificate for any balance of the Shares not sold as part
of the Compelled Sale Securities, in accordance with Nortel's instructions.
23
If Nortel becomes obligated to sell any Compelled Securities to a
Compelled Sale Purchaser under this Agreement and fails to deliver such
Compelled Securities in accordance with the terms of this Agreement, then the
Company, upon written notice to Nortel, (A) shall cancel on its books the stock
certificate or certificates representing the Compelled Securities to be sold,
(B) shall issue, in lieu thereof, in the name of such Compelled Sale Purchaser a
new certificate or certificates representing such Compelled Securities and (C)
shall remit the proceeds of the sale attributable to the sale of Nortel's
Compelled Securities to Nortel immediately upon receipt thereof, and thereupon
all of Nortel's rights in and to such Compelled Securities shall terminate;
provided, however, that the Company shall return to Nortel a new stock
-------- -------
certificate for the balance of the Shares not sold as part of the Compelled Sale
Securities, in accordance with Nortel's instructions.
If any sale to a Compelled Sale Purchaser is not completed by the
expiration of the 90-day period referred to in the third paragraph of this
Section 1(b), then, without prejudice to such Compelling Stockholders' right to
seek to compel a sale under this Section 1 in the future, the Company shall
return to Nortel all certificates representing the Compelled Securities of
Nortel.
(c) Notwithstanding anything in this Section 1 to the contrary, there
shall be no liability on the part of any Compelling Stockholder or the
Representative to Nortel if any sale of Compelled Sale Securities pursuant to
this Section 1 is not consummated for whatever reason.
(d) Nortel shall not be required to make any representation or
warranty in connection with such Compelled Sale Offer other than (to the extent
factually correct) as to Nortel's ownership and authority to sell, free of
liens, claims and encumbrances, the Compelled Securities proposed to be sold by
it. Notwithstanding the foregoing, (i) Nortel shall be required to bear its
proportionate share of any escrows, holdbacks or adjustments in purchase price
under the terms of the purchase agreement relating to such Compelled Sale Offer,
up to but in no event in excess of the net proceeds received by Nortel for the
Compelled Securities sold by it pursuant to such Compelled Sale Offer and (ii)
to the extent factually correct, the Company shall be required to make customary
representations and warranties in connection with such Compelled Sale Offer.
(e) Notwithstanding the foregoing, this Section 1 shall not apply to a
proposed sale of Shares in which the Compelled Sale Purchaser does not acquire
more than 50% of the outstanding Shares of the Company in a single transaction.
This Section 1 shall be binding on Nortel and its Affiliates, but shall have no
force and effect with regard to any unaffiliated transferee of the Shares once
held by Nortel.
2. Restriction on Sales to Certain Persons. Except in connection with the
----------------------------------------
sale to a Person purchasing more than 50% of the outstanding Voting Shares, (i)
Nortel shall not have the right to sell any Voting Shares to any Person listed
on Schedule 2 to this Agreement and (ii) notwithstanding any other provision of
this Agreement to the contrary, no Stockholder (together with all Affiliates of
such Stockholder) nor any future stockholder of the Company, shall have
24
the right to beneficially own or control more than 24.99% of all Voting Shares
outstanding on a fully diluted basis; provided, however, such limitation shall
-------- -------
not apply if a Stockholder's interest exceeds 24.99% as a result of the
acquisition of Voting Shares by the Company which, by reducing the number of
Voting Shares outstanding, increases the proportional number of Voting Shares
beneficially owned or controlled by such Stockholder (together with all
Affiliates of such Stockholder) or any other action which achieves a similar
result, provided such action is not attributable to such Stockholder.
3. Restriction on Distribution of Information. Any information provided
------------------------------------------
by Avici to Nortel in accordance with Section 8.2 of the Series C Purchase
Agreement and Section 7.2 of the Series D Purchase Agreement, shall be deemed to
be confidential information and shall be sent to Nortel's Mergers and
Acquisitions Department, 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx X0X 0X0,
Xxxxxx. No such information shall be distributed directly or indirectly by
Nortel to any Nortel employee, agent, contract worker, contractor or other
individual in similar relationship to Nortel or its Affiliates who is directly
involved in the development or marketing of internet backbone routers or
switches.
ARTICLE VII. GENERAL
1. Termination. Article II shall terminate in its entirety on the earlier
-----------
of (a) the closing of an Initial Public Offering or (b) the tenth anniversary of
the date of this Agreement. All of the Company's obligations to register
Registrable Shares under Article III shall terminate on the earlier of the fifth
anniversary of an Initial Public Offering or, with respect to each Investor,
when such Investor may sell all of its Registrable Securities under Rule 144
within a single calendar quarter. Article IV and Article V shall terminate in
their entirety upon the earliest of (a) the sale of all or substantially all of
the capital stock, assets or business of the Company, by merger, sale of assets
or otherwise, (b) the closing of an Initial Public Offering, or (c) with respect
to rights relating to the Series A Preferred, the date on which less than
437,500 shares of Series A Preferred remain outstanding, with respect to the
rights relating to the Series B Preferred, the date on which less than 2,406,250
shares of Series B Preferred remain outstanding, with respect to the rights
relating to the Series C Preferred, on the date on which less than 1,250,000
shares of Series C Preferred remain outstanding, with respect to the rights
relating to the Series D Preferred, on the date on which less than 1,357,125
shares of Series D Preferred remain outstanding, with respect to the rights
relating to the Series E Preferred, on the date on which less than 1,796,407
shares of Series E Preferred remain outstanding and with respect to the rights
relating to the Series F Preferred, on the date on which less than 25% of the
shares of Series F Preferred that had been issued at any time remain outstanding
(each subject to appropriate adjustment for stock splits, stock dividends,
reclassifications, recapitalizations or similar events). Article VI shall
terminate on the tenth anniversary of the date of this Agreement.
2. Transfer of Rights; Aggregation. This Agreement, and the rights and
-------------------------------
obligations of the Investors hereunder, may be assigned by an Investor to any
person or entity to which Shares are transferred by the Investor, and such
transferee shall be deemed an "Investor" and a "Stockholder" for purposes of
this Agreement; provided that the transferee provides written
--------
25
notice of such assignment to the Company and agrees to be bound by the terms
hereof. Notwithstanding the foregoing sentence, the rights and obligations of
each Investor under Article III may only be assigned by such Investor to (i) any
person or entity to which at least 500,000 Shares are transferred by such
Investor, (ii) any person or entity which is a partner, retired partner, member,
retired member, stockholder or Affiliate of such Investor, or (iii) such
Investor's spouse, non-minor children (natural or adopted), non-minor siblings
or parents, or to a trust established for the benefit of such Investor's spouse,
children (natural or adopted), siblings, parents or such Investor. Except as set
forth in Section 3 of Article VI, no Investor may assign any of its rights or
obligations hereunder to any person or entity which is determined by the Board
of Directors to be a "competitor" of the Company. Except in connection with a
permitted transfer under Section 2(a) of Article V of this Agreement, the
Founders may not assign any rights under this Agreement. All Voting Shares held
or acquired by any Affiliates of any Institutional Investor shall be aggregated
with those held or acquired by such Institutional Investor for the purpose of
determining the availability of any rights of such Institutional Investor under
this Agreement.
3. Severability. The provisions of this Agreement are severable, so that
------------
the invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other term or provision of this
Agreement, which shall remain in full force and effect.
4. Specific Performance. In addition to any and all other remedies that
--------------------
may be available at law in the event of any breach of this Agreement, the
Stockholders shall be entitled to specific performance of the agreements and
obligations of the Company and the Stockholders hereunder and to such other
injunctive or other equitable relief as may be granted by a court of competent
jurisdiction.
5. Governing Law. This Agreement shall be governed by, and construed and
-------------
enforced in accordance with, the laws of the Commonwealth of Massachusetts
(without reference to the conflicts of law provisions thereof).
6. Notices. All notices, requests, consents, and other communications
-------
under this Agreement shall be in writing and shall be delivered by hand or
mailed by first class certified or registered mail, return receipt requested,
postage prepaid:
If to the Company, at Avici Systems Inc., 000 Xxxxxxxxx Xxxxxx, Xxxxx
Xxxxxxxxx, XX 00000, Attention: President, or at such other address or
addresses as may have been furnished in writing by the Company to the
Investors, with a copy to Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, 000 Xxxx Xxxxxx,
Xxxxxx, XX 00000, Attention: Xxxx X. Xxxxxxx, Esq.;
If to an Investor, at his or its address set forth beneath his or its
signature to this Agreement (and, in the case of the Accel Entities, to the
attention of Xxxxx X. Xxxxxx and X. Xxxxxx Sednaoui), or at such other address
or addresses as may have been furnished to the Company in writing by the
Investor; and
26
If to a Founder, at each such Founder's respective address set forth
beneath his signature on this Agreement, or at such other address or addresses
as may have been furnished to the Company in writing by such Founder.
Notices provided in accordance with this Article VII, Section 6 shall be
deemed delivered upon personal delivery or two (2) business days after deposit
in the mail.
7. Counterpart Signature Pages; Updated Agreement. Pursuant to Section
----------------------------------------------
1.2(b) of the Series F Purchase Agreement, certain purchasers will be permitted
to purchase shares of Series F Preferred from the Company at one or more
closings to occur after the date hereof and on or before May 31, 2000 (each a
"Subsequent Closing") and will become "Purchasers" as defined thereunder at that
time by executing counterpart signature pages thereto. It is a condition
precedent to such Purchasers purchasing shares of Series F Preferred at each
Subsequent Closing that such Purchasers execute counterpart signature pages to
this Agreement at such Subsequent Closing and become Investors, as defined
herein. Any such Purchaser (as defined in the Series F Purchase Agreement) who
shall execute a counterpart signature page in the form attached hereto as
Exhibit B at a Subsequent Closing shall become an Investor hereunder and shall
---------
be subject to the obligations and responsibilities and be entitled to the rights
and privileges appertaining to Investors hereunder without further action.
Following each Subsequent Closing, the Company shall update Exhibit A hereto, by
---------
adding the names of each Subsequent Closing Purchaser who purchases shares of
Series F Preferred at such Subsequent Closing to such Exhibit A.
---------
8. Complete Agreement; Amendments. This Agreement constitutes the full
------------------------------
and complete agreement of the parties hereto with respect to the subject matter
hereof. No amendment, modification or termination of any provision of this
Agreement shall be valid unless in writing and signed by the Company and the
holders of 60% of the voting power of the Shares and if the amendment,
modification or termination affects either any right or benefit that has been
granted or conveyed to Nortel, the Amerindo Entities, Anschutz or the Tudor
Entities and not to any or all other Investors or such amendment, modification
or termination affects Nortel, the Amerindo Entities, Anschutz or the Tudor
Entities differently than it affects any or all other Investors or Institutional
Investors, as the case may be, then Nortel's, the Amerindo's Entities',
Anschutz's and/or the Tudor Entities', as the case may be, concurrence shall
also be required in connection with any such amendment, modification or
termination; provided, that, in addition to the preceding provisions set forth
in this sentence, (i) Article III may be amended only if the Founders (by action
of the holders of a majority of the Voting Shares held by the Founders) concur
in such amendment, (ii) Article III may be amended with the consent of less than
all of the Investors only in a manner which affects Registrable Shares (to the
extent affected) in the same fashion and (iii) Articles IV and V may be amended
by the holders of 60% of the voting power of the Shares held by the
Institutional Investors and no consent of the Additional Stockholders shall be
required to amend such Articles, except that Article IV may be amended only if
the Founders (by action of a majority of the Voting Shares held by the Founders)
concur in such amendment. No waivers of or exceptions to any term, condition or
provision of this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term, condition
or provision. The Prior Investor Rights Agreement is hereby terminated and
shall be of no further force or effect.
27
9. Pronouns. Whenever the content may require, any pronouns used in this
--------
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural, and vice
versa.
10. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one Agreement binding on all the parties hereto.
11. Captions. Captions of sections have been added only for convenience
--------
and shall not be deemed to be a part of this Agreement.
[Remainder of page intentionally left blank]
28
IN WITNESS WHEREOF, this Agreement has been executed as of the date first
written above.
COMPANY:
AVICI SYSTEMS INC.
By: /s/ Xxxxx Xxxxxxx
-------------------------------------------
Xxxxx Xxxxxxx, President and CEO
Address: 000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxxxxx, XX 00000
FOUNDERS:
/s/ Xxxxx Xxxxxxx
-----------------------------------------------
Xxxxx Xxxxxxx
Address: 0X Xxxxx Xxxxxx
Xxxxx, XX 00000
/s/ Xxxxxx Xxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxx
Address: 0 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
/s/ Xxxxx Xxxxxxxx
-----------------------------------------------
Xxxxx Xxxxxxxx
Address: 000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
INSTITUTIONAL INVESTORS:
ACCEL V L.P.
By: Accel V Associates L.L.C.
Its General Partner
By: /s/ [ILLEGIBLE]
-------------------------------------------
Managing Member
Address: Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
ACCEL INTERNET / STRATEGIC
TECHNOLOGY FUND L.P.
By: Accel Internet / Strategic Technology
Fund Associates L.L.C.
Its General Partner
By: /s/ [ILLEGIBLE]
-------------------------------------------
Managing Member
Address: Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
ACCEL KEIRETSU V L.P.
By: Accel Keiretsu V Associates L.L.C.
Its General Partner
By: /s/ [ILLEGIBLE]
-------------------------------------------
Managing Member
Address: Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
ACCEL INVESTORS `96 L.P.
By: /s/ [ILLEGIBLE]
-------------------------------------------
General Partner
Address: Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
XXXXXXX X. XXXXXXXXX PARTNERS
By: /s/ [ILLEGIBLE]
-------------------------------------------
General Partner
Address: Xxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
BRENTWOOD ASSOCIATES VII, L.P.
By: Brentwood VII Ventures, L.P.
Its General Partner
By: /s/ G. Xxxxxxxx Xxxxx
-------------------------------------------
General Partner
Address: 0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
BRENTWOOD AFFILIATES FUND
By: Brentwood VII Ventures, L.P.
Its General Partner
By: /s/ G. Xxxxxxxx Xxxxx
-------------------------------------------
General Partner
Address: 0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
OAK VII AFFILIATES FUND, L.P.
By: /s/ Xxxxxx Xxxxxx
-------------------------------------------
General Partner
Address: 000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxx, XX 00000
OAK INVESTMENT PARTNERS VII, L.P.
By: /s/ Xxxxxx Xxxxxx
-------------------------------------------
General Partner
Address: 000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxx, XX 00000
POLARIS VENTURE PARTNERS, L.P.
By: Polaris Venture Management Co., LLC
Its General Partner
By: /s/ [ILLEGIBLE]
-------------------------------------------
Member
Address: 0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
POLARIS VENTURE PARTNERS FOUNDERS'
FUND, L.P.
By: Polaris Venture Management Co., LLC
Its General Partner
By: /s/ [ILLEGIBLE]
-------------------------------------------
Member
Address: 0000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
AMERINDO TECHNOLOGY GROWTH FUND II, a Panamanian
corporation
By: /s/ Xxxx Xxxxxx
-------------------------------------------
Xxxx Xxxxxx, Director
Address: c/o Amerindo Investment Advisors
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
XXXXXX MASTER TRUST
By: Amerindo Investment Advisors Inc.,
attorney-in-fact
By: /s/ Xxxx Xxxxxx
-------------------------------------------
Xxxx Xxxxxx, Director
Address: c/o Amerindo Investment Advisors
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
ANSCHUTZ FAMILY INVESTMENT
COMPANY LLC
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------------
Xxxxx X. Xxxxxxxxx, Vice President
Address: 000 Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
A.C.E. Investment Partnership
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------------
Title: Xxxxx X. Xxxxxxxxx, Vice President
-----------------------------------------
Address: 000 Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
NORTEL NETWORKS INC.
By:
-------------------------------------------
Title:
-----------------------------------------
Address: 000 Xxxxxx Xxx
Xxxxxxxxx, XX 00000
BAYVIEW INVESTORS, LTD.
By: /s/ [ILLEGIBLE]
-------------------------------------------
Address: BancAmerica Xxxxxxxxx Xxxxxxxx
000 Xxxxxxxxxx Xxxxxx, #0000
Xxx Xxxxxxxxx, XX 00000
COMDISCO, INC.
By: /s/ [ILLEGIBLE]
-------------------------------------------
Title:
Address: 0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Venture Group
TUDOR ARBITRAGE PARTNERS, X.X.
Xxxxx Global Trading, Inc.
As General Partner
By:
-------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President
Address: Tudor Investment Corporation
00 Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
TUDOR BVI FUTURES, LTD.
Tudor Investment Corporation
As Investment Advisor
By:
-------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President
Address: Tudor Investment Corporation
00 Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
TUDOR RAPTOR GLOBAL FUND, LTD.
Tudor Investment Corporation
As Investment Advisor
By:
-------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President
Address: Tudor Investment Corporation
00 Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
RAPTOR GLOBAL FUND, X.X.
Xxxxx Investment Corporation
As General Partner
By:
-------------------------------------------
Xxxxx X. Xxxxxxxx
Vice President
Address: Tudor Investment Corporation
00 Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
X.X. XXXXXX DIRECT VENTURE CAPITAL INSTITUTIONAL
INVESTORS LLC
By: /s/ [ILLEGIBLE]
--------------------------------------------
Title: Vice President
-----------------------------------------
Address: 000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
X.X. XXXXXX DIRECT VENTURE CAPITAL PRIVATE
INVESTORS LLC
By: /s/ [ILLEGIBLE]
-------------------------------------------
Title: Vice President
----------------------------------------
Address: 000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
000 XXXXX XXXXXX FUND L.P.
By: /s/ [ILLEGIBLE]
-------------------------------------------
Title: Vice President
----------------------------------------
Address: 000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
MERITECH CAPITAL PARTNERS L.P.
By: MeriTech Capital Associates L.L.C.
its General Partner
By: MeriTech Management Associates L.L.C.
a managing member
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx
Address: 000 Xxxxxxxxxx Xxxxxx
Xxxx 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.
a managing member
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx
Address: 000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
DLJ CAPITAL CORP.
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
By: Xxxxxxx X. Xxxxxxx
Its: Vice President
Address: 0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
DLJ ESC II, L.P.
By: DLJ LBO Plans Management Corporation
Its: General Partner
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
By: Xxxxxxx X. Xxxxxxx
Its: Attorney in Fact
Address: 0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
SPROUT CAPITAL VIII, L.P.
By: DLJ Capital Corp.
Its: Managing General Partner
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
By: Xxxxxxx X. Xxxxxxx
Its: Vice President
Address: 0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
SPROUT VENTURE CAPITAL, L.P.
By: DLJ Capital Corp.
Its: General Partner
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
By: Xxxxxxx X. Xxxxxxx
Its: Vice President
Address: 0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Dell USA L.P.
By: /s/ [illegible]
--------------------------------
Title:
-----------------------------
Address: Xxx Xxxx Xxx
Xxxxx Xxxx, XX 00000
Enron Communications Investments Corp.
By: /s/ [illegible]
--------------------------------
Title: Vice President
-----------------------------
Address: 0000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Nissho Electronics (USA) Corporation
By: /s/ [illegible]
--------------------------------
Title: President
-----------------------------
Address: 0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
Nissho Electronics Corporation
By: /s/ Atts Kato
--------------------------------
Title: Senior Managing Director
-----------------------------
Address: 0-0, Xxxxxxx 0-Xxxxx
Xxxx-Xx, Xxxxx. 000-0000 Xxxxx
Itochu Corporation
By: /s/ Xxxx Xxxxxxxxx
--------------------------------
Title: Xxxx Xxxxxxxxx, Chief Operating Officer
-----------------------------
Information Technology & Telecommunication
Division
Address: 0-0 Xxxx-Xxxxxx 0-Xxxxx
Xxxxxxxx, Xxxxx, Xxxxx
ITOCHU International Inc.
By:
--------------------------------
Title:
-----------------------------
Address: 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Itochu Technology, Inc.
By: /s/ Takahiro Swasaki
--------------------------------
Title: President
-----------------------------
Address: 0000 Xxxxxxx Xxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Itochu Techno-Science Corporation
By:
--------------------------------
Title:
-----------------------------
Address: 00-0, Xxxxxx X-xxxxx
Xxxxxxx-xx, Xxxxx, 000-0000
XXXXX
KECALP Inc., as nominee for Xxxxxxx Xxxxx KECALP
International L.P. 1999
By: /s/ Xxxxxx Xxxxxxx
--------------------------------
Title: Vice President
-----------------------------
Address: 000 Xxxxxxx Xxxxxx
14th Floor - Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxxx Xxxxx IBK Positions Inc.
By:
--------------------------------
Title:
-----------------------------
Address: 000 Xxxxxxx Xxxxxx
00xx Xxxxx - Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxxx Xxxxx KECALP L.P. 1999
By: KECALP Inc., its General Partner
--------------------------------
By: /s/ Xxxxxx Xxxxxxx
--------------------------------
Title: Vice President
-----------------------------
Address: 000 Xxxxxxx Xxxxxx
14th Floor - Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Xxxxx Xxxxxx
-----------------------------------
Address: 000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Tailwind Capital Partners, L.P. Tailwind Capital Partners, L.P.
By: Xxxxxx Xxxxxx Capital Partners LLC By:
General Partner -----------------------------------
Title:
By: /s/ Xxxxx Xxxxxx --------------------------------
---------------------------------
Xxxxx Xxxxxx, General Counsel Address: Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
TWP Avici Investors
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Title: Xxxxx Xxxxxx, Managing Partner
--------------------------------
Address: Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Spinnaker Crossover Institutional Fund, LP
By: /s/ Xxxx Xxxxx
--------------------------------
Title: Xxxx Xxxxx, Controller
-----------------------------
Address: 0000 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Spinnaker Crossover Fund, LP
By: /s/ Xxxx Xxxxx
--------------------------------
Title: Xxxx Xxxxx, Controller
-----------------------------
Address: 0000 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Spinnaker Clipper Fund, LP
By: /s/ Xxxx Xxxxx
--------------------------------
Title: Xxxx Xxxxx, Controller
-----------------------------
Address: 0000 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Xxxxxxxx Communications, Inc.
By: /s/ [illegible]
--------------------------------
Title: President & Chief Executive Officer
-----------------------------
Address: One Xxxxxxxx Center, MD 26-1
Attn: President, Domestic Strategic
Investments
Xxxxx, XX 00000
ADDITIONAL STOCKHOLDERS:
REIN & CO., INC.
By:
--------------------------------
General Partner
Address: Union Valley Corporate Center
0000 Xxxxxxx Xxxx
Xxxxx Xxxxxx Xxxxxxxx, XX
XXXXX XXXXXX AS CUSTODIAN FOR THE XXX OR XXXXX OF
XXXXXXX X. XXXX
By:
--------------------------------
General Partner
Address: Xxxxx Xxxxx
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
-----------------------------------
Xxxxxxxx X. Xxxxxxx
Address: 000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
-----------------------------------
Xxxx XxXxxxxxx
Address: 000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
-----------------------------------
Xxxxx Xxxxxxx
Address: 00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
-----------------------------------
Xxxxxx Xxxxxxxxx, Xx.
Address: 00 Xxxxxxxxx
Xxxxxxxxxx, XX 00000
-----------------------------------
Xxxxx Xxxxxxx
Address: 0 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
-----------------------------------
Xxxxxx Xxxxxxx
Address: 0 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
-----------------------------------
Xxxxx X. Xxxxxx
Address: 0 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
-----------------------------------
Xxx Xxxxxxx
Address: 0000 Xxxx Xxxxxx Xxxxx
Xxxx X000
Xxxxxxxxxx, XX 00000
H&D INVESTMENTS 97
By:
--------------------------------
General Partner
Address: 00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
-----------------------------------
Xxxxxxx Xxxxx
Address: 0000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
-----------------------------------
Xxxxxx Xxxx
Address: 0 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
-----------------------------------
Xxxx Xxxxxxxxx
Address: 000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
-----------------------------------
Xxxxxxx Xxxxxx
Address: c/o Amerindo Investment Advisors
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
-----------------------------------
Xxxxxxx Xxxxxx-Xxxxxxx
Address: c/o Amerindo Investment Advisors
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
-----------------------------------
Xxxxx Xxxxxxxxxx
Address: c/o Amerindo Investment Advisors
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
-----------------------------------
Xxxx Xxxxx
Address: c/o Amerindo Investment Advisors
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
-----------------------------------
Xxxxx Xxxx
Address: 00 Xxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
-----------------------------------
Xxxxxxx Xxxxxxxx
Address: 00 Xxxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
-----------------------------------
P. Xxxxx Xxxx
Address: 00 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, d/b/a:
High Street Investors 2000
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Title: Partner
-----------------------------
Address: 000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Synergy Venture Partners I, L.P.
By: /s/ Xxxx X. Xxxxx
--------------------------------
Title: Partner
-----------------------------
Address: 00000 Xxxxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
/s/ Xxxxxxxxx Xxxxx
-----------------------------------
Xxxxxxxxx Xxxxx
Address: 0000 X. Xxxxxxxx Xx.
Xxxxxxxxx, XX 00000
/s/ Xxxxx Xxxxxxxxx
-----------------------------------
Xxxxx Xxxxxxxxx
Address: 00000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Samsung Venture Investment Corp.
By: /s/ Jae - Xxx Xxx
--------------------------------
Jae - Xxx Xxx
President
Address: 16th Fl. Samsung Yeoksam Xxxx.
000-0 Xxxxxxx-Xxxx, Xxxxxxx-Xx
/s/ Xxxx Xxxxxxxx
-----------------------------------
Xxxx Xxxxxxxx
Address: 00 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Exhibit A
---------
Second Closing Purchasers:
Exhibit B
---------
Signature Page to Fifth Amended and Restated Investor Rights Agreement
dated as of April __, 2000 among Avici Systems Inc. and the
Investors and Founders named therein
Pursuant to Section 7 of Article VII of the Fifth Amended and Restated
Investor Rights Agreement dated as of April __, 2000 among Avici Systems Inc.,
the Investors and Founders named therein (the "Agreement"), the undersigned (the
"Subsequent Closing Investor") hereby agrees to become a party to the Agreement
as if such person or entity had been listed on Exhibit A thereto, to be added to
---------
Exhibit A thereto as a "Subsequent Closing Investor", to be subject to the terms
---------
thereof and to be bound by the obligations and responsibilities and entitled to
the rights and privileges appertaining to Investors, as set forth therein.
IN WITNESS WHEREOF, the undersigned has caused the Fifth Amended and
Restated Investor Rights Agreement to be executed under seal as of the date set
forth below:
Name of Subsequent Closing Investor:
----------------------------------
Address:
------------------------
------------------------
------------------------
Signature:
-----------------------
Title:
------------------------
(if applicable)
Acknowledged and Agreed to:
Avici Systems Inc.
By:
----------------------------------
Name:
Title:
