USINTERNETWORKING, INC.
AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
DATED AS OF
DECEMBER 31, 1998
AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
This AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT (the "Agreement") is
entered into as of December 31, 1998 by and among USinternetworking, Inc., a
Delaware corporation (the "Company"), and the parties set forth on Exhibit A
hereto (the "Stockholders").
RECITALS:
A. Certain of the Stockholders (together, and including their permitted
successors and assigns, the "Series A Purchasers") have purchased shares of the
Series A Preferred Stock (the "Series A Preferred Shares").
B. The Company, the Series A Purchasers and the Individual Shareholders
have entered into a Shareholders' Agreement dated as of May 28, 1998 (as
amended, the "Original Agreement").
C. Certain of the Stockholders (together, and including their permitted
successors and assigns, the "Series B Purchasers") have agreed to purchase
shares of the Series B Preferred Stock (the "Series B Preferred Shares")
pursuant to that certain Stock Purchase Agreement dated as of the date hereof
(the "Stock Purchase Agreement").
D. It is a condition precedent to the Closing under the Stock Purchase
Agreement that the parties hereto enter into this Agreement for the purpose of
amending and restating the Original Agreement.
E. All of the Stockholders desire to enter into this Agreement for the
purpose of amending and restating the Original Agreement in its entirety and of
regulating certain aspects of the Stockholders' relationships with regard to
each other and the Company.
AGREEMENT:
NOW THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the Company and the
Stockholders agree to amend and restate the Original Agreement as follows:
Section 1. DEFINITIONS. As used herein, the following terms shall have
the following meanings and other defined terms in this Agreement shall have the
meanings given such terms in their respective sections and/or paragraphs:
"BUSINESS" means the acquisition of interests in, and the operation of,
companies engaged in activities related to the provision of Internet computing
services to enterprise customers worldwide, and all services related thereto.
"COMMON STOCK" means the Common Stock, par value $.001 per share, of
the Company and any other capital stock of the Company into which such Common
Stock is reclassified or reconstituted.
"COMPANY SECURITIES" any and all shares, interests, participations or
other equivalents (however designated) of capital stock of the Company and any
rights to acquire the foregoing, including, without limitation, any rights to
acquire securities exercisable for, convertible into or exchangeable for the
foregoing now or hereafter issued by the Company.
"CONDITION OF THE COMPANY" shall have the same meaning as in the Stock
Purchase Agreement.
"EMPLOYEE STOCK OPTION PLAN" shall have the same meaning as in the
Stock Purchase Agreement.
"INDIVIDUAL SHAREHOLDERS" means Xxxxxxxxxxx X. XxXxxxxx, Xxxxxxx X.
XxXxxxx, Xxxxxx X. Xxxxx and Xxxxx X. Xxxxxx.
"INVESTORS" means the parties to this Agreement identified on Exhibit
B.
"PERSON" shall have the same meaning as the term "Person" in the Stock
Purchase Agreement.
"PREFERRED SHARES" means the Series A Preferred Shares and the Series B
Preferred Shares.
"PURCHASERS" means the parties to this Agreement identified on Exhibit
C hereto and their permitted successors and assigns.
"SERIES A PREFERRED STOCK" means the 8% Series A Cumulative Convertible
Preferred Stock, par value $.01 per share, of the Company, or any other capital
stock of the Company into which such Series A Preferred Stock is reclassified or
reconstituted.
"SERIES B PREFERRED STOCK" means the 8% Series B Cumulative Convertible
Redeemable Preferred Stock, par value $.01 per share, of the Company, or any
other capital stock of the Company into which such Series B Preferred Stock is
reclassified or reconstituted.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
"STOCKHOLDERS" means those parties whose names appear on Exhibit A and
such other Persons who become parties hereto pursuant to Section 2 hereof.
"WHITNEY" shall mean X.X. Xxxxxxx III, L.P. and Whitney Strategic
Partners III, L.P., collectively.
Section 2. TRANSFER OF SECURITIES.
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(a) GENERAL PROHIBITION ON TRANSFER. No Stockholder shall
sell, assign, transfer, pledge, encumber or in any way otherwise dispose of any
Company Securities (any such disposition, whether voluntary or involuntary, and
any agreement to effect such disposition, a "Transfer") unless (i) such
Stockholder has complied with the provisions of this Section 2, (ii) the
transferee (if other than the Company or a transferee of Company Securities
pursuant to a transaction set forth in clause (iv) of the definition of Exempt
Transfers (as set forth in Section 2(c)) has agreed in writing to become a party
to, and be bound by the terms of, this Agreement and (iii) such Stockholder has
delivered to the Company an opinion of such Stockholder's counsel, in form and
substance reasonably satisfactory to the Company, to the effect that such
Transfer is either exempt from the registration requirements of the Securities
Act and the applicable securities laws of any state or that such registration
requirements have been complied with; PROVIDED, HOWEVER, that no such opinion of
counsel shall be required for a transfer by a holder of Company Securities which
is a partnership to a partner or employee of such holder or a retired partner or
retired employee of such holder who retires after the date hereof, or to the
estate of any such partner, retired partner, employee or retired employee, or a
transfer by gift, will or intestate succession from any holder of Company
Securities to his or her spouse or members of his or her or his or her spouse's
family or a trust for the benefit of any of the foregoing Persons, if the
transferee agrees in writing to be subject to the terms hereof to the same
extent as if such transferee were an original holder of Company Securities
hereunder.
(b) RIGHT OF FIRST REFUSAL.
(i) If any Stockholder (a "Seller") has received a
bona fide offer (a "Transfer Offer" ) which the Seller proposes to accept to
purchase any or all of the Company Securities (the "Transfer Stock") then owned
by such Seller to any Person (a "Bona Fide Purchaser") other than pursuant to an
Exempt Transfer (as defined in Section 2(c) below), then before the Seller may
sell the Transfer Stock, the Seller shall provide to each other Stockholder and
the Company a written notice detailing the terms of such Transfer Offer that the
Seller has received with respect to such Transfer Stock (a "Transfer Notice").
Such Transfer Notice shall identify the Transfer Stock, the price of the
Transfer Stock, the identity of the Bona Fide Purchaser and all the other
material terms and conditions of such Transfer Offer. The Transfer Notice shall
contain an irrevocable offer (a "First Offer") to sell to each other Stockholder
its pro rata share (determined for the purposes of this Section 2 on the basis
of its ownership of Company Securities as compared to the ownership of Company
Securities of all Stockholders calculated on a Common Stock equivalent basis) of
the Transfer Stock and an irrevocable offer (the "Second Offer") to sell to the
Company that number of shares of Transfer Stock not purchased by the
Stockholders pursuant to the Stockholder Right of First Refusal (as defined
below), each at a price equal to the price and upon substantially the same terms
as the terms contained in such Transfer Offer. Each other Stockholder shall have
the irrevocable right and option (the "Stockholder Right of First Refusal"),
exercisable as provided below, to accept the First Offer as to any or all of its
pro rata share of the Transfer Stock. Each other Stockholder which desires to
exercise its Stockholder Right of First Refusal shall provide the Seller and the
Company with an irrevocable written notice of acceptance (an "Initial Notice")
specifying the number of Company Securities of the Transfer Stock which such
other Stockholder is agreeing to purchase pursuant to such First Offer, which
shall be binding on such other Stockholder for the
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number of Company Securities in such notice of acceptance, which notice of
acceptance must be provided to the Seller and the Company within fifteen (15)
business days after the date the Transfer Notice is given (the "Initial Notice
Period"). If the aggregate number of shares of Transfer Stock to be purchased by
the Stockholders pursuant to the Initial Notices is less than the total number
of shares of Transfer Stock which the Seller proposes to sell in the Transfer
Notice, then each Stockholder that had provided the Seller with an Initial
Notice shall be so notified and shall have the irrevocable right and option to
purchase an additional amount of Transfer Stock equal to an amount up to its pro
rata share of the remaining Transfer Stock (the "Oversubscription Right"). Each
other Stockholder which desires to exercise its Oversubscription Right shall
provide the Seller and the Company with an irrevocable written notice of
acceptance (an "Oversubscription Notice") specifying the number of Company
Securities of the Transfer Stock which such other Stockholder is agreeing to
purchase pursuant to such Oversubscription Right, which shall be binding on such
other Stockholder for the number of Company Securities in such notice of
acceptance, which notice of acceptance must be provided to the Seller and the
Company within five (5) business days after receiving notice of its
Oversubscription Right (the "Oversubscription Period"). If the aggregate number
of shares of Transfer Stock to be purchased by the Stockholders pursuant to the
Initial Notices and Oversubscription Notices is less than the total number of
shares of Transfer Stock which the Seller proposes to sell in the Transfer
Notice then the Company shall have the irrevocable right and option to purchase
(the "Company Right of First Refusal"), exercisable as provided below, to
purchase any or all of such remaining shares. The Company may exercise its
Company Right of First Refusal by providing the Seller with an irrevocable
written notice of acceptance (the "Second Notice") specifying the number of
Company Securities of the Transfer Stock which the Company is agreeing to
purchase pursuant to such Second Offer, which shall be binding on the Company
for the number of Company Securities in such notice of acceptance, which notice
of acceptance must be provided to the Seller within fifteen (15) business days
after the end of the Oversubscription Period (the "Final Notice Period").
(ii) Subject to the Seller's rights under Section
2(b)(iii), the closing of the purchase of the Transfer Stock by the Stockholders
and/or the Company pursuant to this Section 2(b) shall take place at the
principal office of the Company on the thirtieth (30th) business day after the
expiration of the Final Notice Period (or after the receipt of any required
governmental consents or approvals). At such closing, the Stockholders and/or
the Company shall deliver a certified check or checks in the appropriate amount
to the Seller against delivery of certificates representing the Transfer Stock
so purchased, duly endorsed in blank by the Person or Persons in whose name a
stock certificate is registered or accompanied by a duly executed assignment
separate from the certificate with the signatures thereon guaranteed by a
commercial bank or trust company.
(iii) Notwithstanding the exercise by the
Stockholders and the Company of their rights under this Section 2(b), if at the
end of the Final Notice Period the Stockholders and the Company shall have
agreed to purchase less than all of the Transfer Stock covered thereby (a
"Partial Purchase Commitment"), the Seller shall promptly notify the
Stockholders and the Company as to whether or not it shall accept such Partial
Purchase Commitment. If such Partial Purchase Commitment is accepted, the
closing for such purchase of
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a portion of such Transfer Stock shall take place pursuant to Section 2(b)(ii)
hereof. Upon acceptance by the Seller of the Partial Purchase Commitment, the
Seller shall have the right within the time hereinafter specified to Transfer to
the Bona Fide Purchaser any Transfer Stock not included in the Partial Purchase
Commitment at a price not less than and on terms no more favorable to the Bona
Fide Purchaser than were in the Transfer Notice. If the Seller determines not to
accept the Partial Purchase Commitment, the Seller shall have the right within
the time hereinafter specified to Transfer to the Bona Fide Purchaser any or all
of the Transfer Stock at a price not less than and on terms no more favorable to
the Bona Fide Purchaser than contained in the Transfer Notice. If the
Stockholders and the Company notify the Seller that they have decided not to
purchase any portion of the Transfer Stock, or the Seller has accepted a Partial
Purchase Commitment and desires to Transfer the remaining Transfer Stock, or the
Seller has rejected the Partial Purchase Commitment and desires to Transfer the
Transfer Stock, the Seller shall have 180 days from the end of the Final Notice
Period (the "Sales Period"), in which to Transfer to the Bona Fide Purchaser any
or all of the Transfer Stock at a price not less than and on terms no more
favorable than were contained in the Transfer Notice. No sale may be made to any
third party unless such third party agrees in writing, to be bound by the
provisions of this Agreement. Promptly after any sale pursuant to this Section
2(b), the Seller shall notify the Stockholders and the Company of the
consummation thereof and shall furnish such evidence of the completion
(including time of completion) of such sale and of the terms thereof as the
Company may reasonably request. If, at the termination of the Sales Period, the
Seller has not completed the sale of all the Transfer Stock, such Seller shall
no longer be permitted to Transfer such Transfer Stock pursuant to this Section
2(b) without again fully complying with the provisions of this Section 2(b) and
all the restrictions on Transfer contained in this Agreement shall again be in
effect with respect to all such Seller's Transfer Stock.
(c) EXEMPT TRANSFER. The following transactions shall
constitute "Exempt Transfers" for the purpose of Section 2(b): (i) a redemption
of the Series B Preferred Stock by the Company, (ii) a Transfer by a Stockholder
of Company Securities by will or intestate succession to such Stockholder's
executors, administrators, testamentary trustees, legatees or beneficiaries,
(iii) a Transfer of Company Securities by a Stockholder to any Related Party (as
defined below) of such Stockholder, (iv) a Transfer of Company Securities by a
Stockholder to the public pursuant to an underwritten public offering of Common
Stock representing not less than $300 million pre-money valuation of the
Company's fully-diluted common equity, resulting in net proceeds to the Company
of not less than $50 million or pursuant to Rule 144 under the Securities Act,
(v) a Transfer of Company Securities by a Stockholder to an organization
described in Section 501(c)(3) of the U.S. Internal Revenue Code, provided that
during the term of this Agreement a Stockholder shall only be entitled to
Transfer Company Securities having an aggregate value of up to $120,000 pursuant
to this clause, and (vi) a Transfer of Company Securities that has been approved
in writing as an Exempt Transfer by the holders of a majority of the outstanding
Common Stock, the holders of a majority of the outstanding Series A Preferred
Stock and the holders of two-thirds of the outstanding Series B Preferred Stock.
(d) TAG-ALONG. In addition to the foregoing, a Stockholder (a
"Transferring Stockholder") may Transfer any Company Securities pursuant to
Section 2(b)(iii) only if the purchaser thereof agrees to provide each of the
other Stockholders the right (but not the
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obligation) to participate in the Transfer of its Company Securities to such
purchaser upon the same terms and conditions (except, in the case where the
other Stockholders so participating are selling Company Securities of a
different class, the purchase price to be paid therefor shall be equitably
adjusted to reflect the applicable differences in seniority and participation in
proceeds of sale or liquidation in respect of the differing classes of Company
Securities). If the prospective purchaser will not purchase all of the Company
Securities which each of the Stockholders wishes to sell pursuant to this
Section 2(d), then the number of shares which each of the Stockholders,
including without limitation the Transferring Stockholder, may sell will be
determined on a pro-rata basis. The right of a Stockholder to participate in any
Transfer of Company Securities pursuant to this Section 2(d) shall terminate
unless such Stockholder shall give written notice to the selling Stockholder of
its intent to participate in such Transfer within ten (10) days after receiving
the notice described above.
(e) RELATED PARTY. As used herein, the term "Related Party"
with respect to any Stockholder means: (A) any Person or entity that directly or
indirectly, through one or more intermediaries, has control of or is controlled
by, or is under common control with, the Person or entity specified (an "
Affiliate"); (B) a trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, or owners, or Persons holding a
controlling interest of which consist of such Stockholder and/or such other
Persons or entities referred to in the immediately preceding clause (A), (C)
with respect to any Stockholder which is an individual, such Stockholder's
spouse, siblings, children or parents, or (D) with respect to any Stockholder
which is a partnership or a limited liability company, such Stockholders'
partners or members as of the date hereof and those Persons who become partners
or members of such Stockholder in accordance with the terms of the partnership
or operating agreement thereof, and (E) with respect to X.X. Xxxxxxx III, L.P.,
Whitney Strategic Partners III, L.P. and Xxxxxx Xxxxxx Media Partners, L.P.,
each such Purchaser and the Affiliates, partners and retired partners of such
Purchasers, the estates and family members of any such partners and retired
partners and of their spouses, and any trusts for the benefit of any of the
foregoing Persons.
(f) REGULATORY COMPLIANCE. The Company and each of the
Stockholders hereby waive the provisions of Section 2(b) to the extent that such
provisions would apply to any transfer of Company Securities by US West or its
Affiliates to the extent that, and in the circumstances under which, the Company
has agreed to waive such provisions pursuant to Section 7.3 of the Stock
Purchase Agreement or Section 7.4(c) of the Stock Purchase Agreement dated as of
June 18, 1998 between the Company and US WEST Communications, Inc.
("US WEST")
Section 3. REGISTRATION RIGHTS.
(a) PIGGYBACK REGISTRATION RIGHTS.
(1) RIGHT TO PIGGYBACK. Subject to the last sentence
of this subsection (1), whenever the Company proposes to register any securities
with the Securities and Exchange Commission (the "Commission") under the
Securities Act (other than registrations on Form S-4 or Form S-8) for itself or
other security holders or both and the registration form to be used may
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be used for the registration of the Registrable Securities (as defined in
subsection (j) below) (a "Piggyback Registration"), the Company will give
written notice to all Stockholders, at least thirty (30) days prior to the
anticipated filing date, of its intention to effect such a registration, which
notice will specify the proposed offering price, the kind and number of
securities proposed to be registered, the distribution arrangements and such
other information that at the time would be appropriate to include in such
notice, and will, subject to subsection (a)(2) below, include in such Piggyback
Registration all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within twenty (20) business days
after the delivery of the Company's notice. Except as may otherwise be provided
in this Agreement, Registrable Securities with respect to which such request for
registration has been received will be registered by the Company and offered to
the public in a Piggyback Registration pursuant to this Section 3 on the terms
and conditions at least as favorable as those applicable to the registration of
the securities to be sold by the Company and by any other Person selling under
such Piggyback Registration.
(2) PRIORITY ON PIGGYBACK REGISTRATIONS. If the
managing underwriter or underwriters, if any, advise the holders of Registrable
Securities in writing that in its or their reasonable opinion or, in the case of
a Piggyback Registration not being underwritten, the Company shall reasonably
determine (and notify the holders of Registrable Securities of such
determination), after consultation with an investment banker of nationally
recognized standing, that the number or kind of securities proposed to be sold
in such registration (including Registrable Securities to be included pursuant
to subsection (a)(1) above) will materially adversely affect the success of such
offering (including, without limitation, an impact on the selling price), the
Company will include in such registration the number of securities, if any,
which, in the opinion of such underwriter or underwriters, or the Company, as
the case may be, can be sold, as follows: (i) first, the shares the Company
proposes to sell, (ii) second, the Registrable Securities requested to be
included in such registration by the Stockholders, pro rata among those of the
requesting Stockholders that are Purchasers on the basis of the number of shares
of Registrable Securities that each has requested to be included in such
registration and (iii) third, pro rata among all other Stockholders.
(b) Demand Registration Rights.
(1) RIGHT TO DEMAND REGISTRATION. Stockholders
holding at least 33% of the Registrable Securities then outstanding (all
calculated on a fully-diluted basis) (referred to herein as a "Demanding Group")
shall have the right at any time after the date ninety (90) days after the first
registration of Common Stock under the Securities Act (other than any
registration on Form S-8 or a similar successor form) (the "Trigger Date") to
make a written request of the Company for registration with the Commission,
under and in accordance with the provisions of the Securities Act, of all or
part of their Registrable Securities (a "Demand Registration"); PROVIDED, that
(x) the Company may once in any twelve-month period, if the Board of Directors
determines in the exercise of its reasonable judgment after consulting with
counsel that due to a pending or contemplated acquisition or disposition, to
effect such Demand Registration at such time would have a material adverse
effect on the Company, defer such Demand Registration for a single period not to
exceed one hundred eighty (180) days, provided that the 180-day period
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will lapse if the acquisition or disposition is completed or not pursued or such
registration otherwise would no longer have a material adverse effect, (but if
the Company elects to defer any Demand Registration pursuant to the terms of
this sentence, no Demand Registration shall be deemed to have occurred for
purposes of this Agreement) and (y) the Company shall be obligated pursuant to
this Section 3(b)(1) to effect only the number of Demand Registrations set forth
in subsection 3(b)(2) below. Within ten (10) days after receipt of the request
for a Demand Registration, the Company will send written notice (the "Notice")
of such registration request and its intention to comply therewith to all
Stockholders who are holders of Registrable Securities and, subject to
subsection (3) below, the Company will include in such registration all
Registrable Securities of such Stockholders with respect to which the Company
has received written requests within twenty (20) days of the date of the Notice.
All requests made pursuant to this subsection (b)(1) will specify the aggregate
number of Registrable Securities requested to be registered and will also
specify the intended methods of disposition thereof.
(2) NUMBER OF DEMAND REGISTRATIONS. The Stockholders
shall be entitled to three (3) Demand Registrations, and the expenses of each
(including the fees and expenses of a total of one counsel for the Demanding
Group in accordance with subsection (e)(2) below) shall be borne by the Company.
A Demand Registration shall not be counted as a Demand Registration hereunder
until such Demand Registration has been declared effective by the Commission and
maintained continuously effective for the period required by Section 3(c)(2). In
addition, at such time, if any, as the Company becomes eligible to use Form S-3
under the Securities Act (or any successor form thereto), a Demanding Group or a
Stockholder or Stockholders proposing to register Registrable Securities, the
sale of which is expected to generate at least $10,000,000 in aggregate gross
proceeds, shall be entitled to unlimited Demand Registrations on Form S-3,
provided that there may be only two (2) such Demand Registrations in each
twelve-month period, subject to the other provisions hereof.
(3) PRIORITY ON DEMAND REGISTRATIONS. If in any
Demand Registration the managing underwriter or underwriters thereof (or in the
case of a Demand Registration not being underwritten, the holders of a majority
of the Registrable Securities held by the Demanding Group after consultation
with an investment banker of nationally recognized standing), advise the Company
in writing that in its or their reasonable opinion the number of securities
proposed to be sold in such Demand Registration exceeds the number that can be
sold in such offering without having a material adverse effect on the success of
the offering (including, without limitation, an impact on the selling price),
the Company will include in such registration only the number of securities
that, in the reasonable opinion of such underwriter or underwriters (or such
holders of Registrable Securities held by the Demanding Group, as the case may
be) can be sold without having a material adverse effect on the success of the
offering, as follows: (i) first, the Registrable Securities requested to be
included in such Demand Registration by the Demanding Group and shares held by
Persons that are Purchasers but are not in the Demanding Group and requested to
be included in such Demand Registration, pro rata, among such Stockholders on
the basis of the number of shares of Registrable Securities each has requested
to be included in the Demand Registration, and (ii) second, shares to be issued
and sold by the Company and (iii) shares held by other Stockholders that are
requested to be included in the Demand Registration, on the same basis.
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(c) REGISTRATION PROCEDURES. With respect to any Piggyback
Registration or Demand Registration (generically, a "Registration"), the Company
will as expeditiously as practicable:
(1) prepare and file with the Commission, as
expeditiously as possible, but in no event later than 90 days after mailing the
applicable Notice, a registration statement or registration statements (the
"Registration Statement") relating to the applicable Registration on any
appropriate form under the Securities Act, which form shall be available for the
sale of the Registrable Securities in accordance with the intended method or
methods of distribution thereof; PROVIDED that the Company will include in any
Registration Statement all information that the holders of the Registrable
Securities so to be registered shall reasonably request and shall include all
financial statements required by the Commission to be filed therewith, cooperate
and assist in any filings required to be made with the National Association of
Securities Dealers, Inc. ("NASD"), and use its best efforts to cause such
Registration Statement to become effective; PROVIDED FURTHER, that before filing
a Registration Statement or prospectus related thereto (a "Prospectus") or any
amendments or supplements thereto, the Company will furnish to the holders of
the Registrable Securities covered by such Registration Statement and the
underwriters, if any, copies of all such documents proposed to be filed, which
documents will be subject to the reasonable review of such holders and
underwriters and their respective counsel, and the Company will not file any
Registration Statement or amendment thereto or any Prospectus or any supplement
thereto to which the holders of a majority of the Registrable Securities covered
by such Registration Statement or the underwriters, if any, shall reasonably
object;
(2) prepare and file with the Commission such
amendments and post-effective amendments to the Registration Statement as may be
necessary to keep each Registration Statement effective for (i) the period
necessary to allow all underwriters participating in a firm commitment
underwriting to complete distribution of the Registrable Securities covered by
such Registration Statement or (ii) if the Registrable Securities covered by
such Registration Statement are not being sold pursuant to a firm commitment
underwriting, the period ending on the later of nine months after the
effectiveness of the Registration Statement or when 80% of the Registrable
Securities covered by such Registration Statement have been sold, or such
shorter period which will terminate when all Registrable Securities covered by
such Registration Statement have been sold; cause each Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Securities Act; and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement or supplement to the
Prospectus; the Company shall not be deemed to have used its best efforts to
keep a Registration Statement effective during the applicable period if it
voluntarily takes any action that would result in selling holders of the
Registrable Securities covered thereby not being able to sell such Registrable
Securities during that period unless such action is required under applicable
law, PROVIDED, that the foregoing shall not apply to actions taken by the
Company in good faith and for valid business reasons, including without
limitation the acquisition or divestiture of assets, so long as the Company does
not take
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such action (other than actions contemplated by (3)(F)) more than once in any
twelve-month period and promptly thereafter complies with the requirements of
subsection (11) of this subsection (c), if applicable;
(3) notify the selling holders of Registrable
Securities and the managing underwriters, if any, promptly, and (if requested by
any such Person or entity) confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to the Registration Statement or any post-effective
amendment, when the same has become effective, (B) of any request by the
Commission for amendments or supplements to the Registration Statement or the
Prospectus or for additional information, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose, (D) if at any time the
representations and warranties of the Company contemplated by subsection (14)
below cease to be true and correct in any material respect, (E) of the receipt
by the Company of any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose and (F) of the
happening of any event which makes any statement of a material fact made in the
Registration Statement, the Prospectus or any document incorporated therein by
reference untrue or which requires the making of any changes in the Registration
Statement, the Prospectus or any document incorporated therein by reference in
order to make the statements of material facts contained therein not misleading;
(4) make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of the Registration
Statement as soon as possible;
(5) if requested by the managing underwriter or
underwriters or a holder of Registrable Securities being sold in connection with
an underwritten offering, promptly incorporate in a Prospectus supplement or
post-effective amendment such information as the managing underwriters and the
holders of a majority of the Registrable Securities being sold agree should be
included therein relating to the plan of distribution with respect to such
Registrable Securities, including, without limitation, information with respect
to the number of Registrable Securities being sold to such underwriters, the
purchase price being paid therefor by such underwriters and with respect to any
other terms of the underwritten (or best efforts underwritten) offering of the
Registrable Securities to be sold in such offering; and make all required
filings of such Prospectus supplement or post-effective amendment as soon as
notified of the matters to be incorporated in such Prospectus supplement or
post-effective amendment;
(6) furnish to each selling holder of Registrable
Securities and each managing underwriter, without charge, at least one signed
copy of the Registration Statement and any amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(7) deliver to each selling holder of Registrable
Securities and the underwriters, if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such selling holder of
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Registrable Securities and underwriters may reasonably request; the Company
consents to the use of each Prospectus or any amendment or supplement thereto by
each of the selling holders of Registrable Securities and the underwriters, if
any, in connection with the offering and sale of the Registrable Securities
covered by such Prospectus or any amendment or supplement thereto;
(8) prior to any public offering of Registrable
Securities, register or qualify or cooperate with the selling holders of
Registrable Securities, the underwriters, if any, and their respective counsel
in connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or "blue sky" laws of such
jurisdictions as any seller or underwriter reasonably requests in writing and do
any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by the
Registration Statement; PROVIDED that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject;
(9) cooperate with the selling holders of Registrable
Securities and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold and not bearing any restrictive legends and to be in such denominations
and registered in such names as the managing underwriters may request at least
two business days prior to any sale of Registrable Securities to the
underwriters;
(10) use its best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriters, if any,
to consummate the disposition of such Registrable Securities;
(11) upon the occurrence of any event contemplated by
subsection (3)(F) above, prepare a supplement or post effective amendment to the
Registration Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, the Prospectus will
not contain an untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading;
(12) cause all Registrable Securities covered by any
Registration Statement to be listed on each securities exchange on which similar
securities issued by the Company are then listed, or cause such Registrable
Securities to be authorized for trading on the NASDAQ National Market System if
any similar securities issued by the Company are then so authorized, if
requested by the holders of a majority of such Registrable Securities or the
managing underwriters, if any;
(13) provide a CUSIP number for all Registrable
Securities, not later than the effective date of the applicable Registration
Statement;
(14) enter into such agreements (including an
underwriting agreement) and take all such other actions in connection therewith
in order to expedite or facilitate the
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disposition of such Registrable Securities and in such connection, whether or
not an underwriting agreement is entered into and whether or not the
Registration is an underwritten Registration (A) make such representations and
warranties to the holders of such Registrable Securities and the underwriters,
if any, in form, substance and scope as are customarily made by issuers to
underwriters in primary underwritten offerings; (B) obtain opinions of counsel
to the Company and updates thereof (which counsel and opinions (in form, scope
and substance) shall be reasonably satisfactory to the managing underwriters, if
any, and the holders of a majority of the Registrable Securities being sold)
addressed to each selling holder and the underwriters, if any, covering the
matters customarily covered in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such holders and
underwriters; (C) obtain "cold comfort" letters and updates thereof from the
Company's independent certified public accountants addressed to the selling
holders of Registrable Securities and the underwriters, if any, such letters to
be in customary form and covering matters of the type customarily covered in
"cold comfort" letters by underwriters in connection with primary underwritten
offerings; (D) if an underwriting agreement is entered into, the same shall set
forth in full the indemnification provisions and procedures set forth in
subsection (f) below with respect to all parties to be indemnified pursuant to
said subsection; and (E) the Company shall deliver such documents and
certificates as may be requested by the holders of a majority of the Registrable
Securities being sold and the managing underwriters, if any, to evidence
compliance with subsection 3(F) above and with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Company. No such agreement shall contain provisions applicable to the Company
which are inconsistent with the provisions hereof. The above shall be done at
each closing under such underwriting or similar agreement or as and to the
extent required thereunder;
(15) make available for inspection by each Seller,
any underwriter participating in any disposition pursuant to such Registration,
and any attorney or accountant retained by the sellers or underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors and employees to supply all
information reasonably requested by any such Seller, underwriter, attorney or
accountant in connection with such Registration Statement; PROVIDED, that any
records, information or documents that are designated by the Company in writing
as confidential shall be kept confidential by such Persons unless disclosure of
such records, information or documents is required by court or administrative
order or any regulatory body having jurisdiction;
(16) otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the Commission, and make
generally available to its security holders, earnings statements satisfying the
provisions of Section 11(a) of the Securities Act, no later than forty-five (45)
days after the end of any twelve (12)-month period (or ninety (90) days, if such
period is a fiscal year) (A) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm or best efforts
underwritten offering, or (B) if not sold to underwriters in such an offering,
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of the Registration Statement, which statements shall
cover said twelve (12)-month periods; and
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(17) promptly prior to the filing of any document
that is to be incorporated by reference into any Registration Statement or
Prospectus (after initial filing of the Registration Statement), provide copies
of such document to counsel to the selling holders of Registrable Securities and
to the managing underwriters, if any, and make the Company's representatives
available for discussion of such document.
The Company may require each seller of Registrable Securities as to
which any Registration is being effected to furnish to the Company such
information regarding the proposed distribution of such securities as the
Company may from time to time reasonably request in writing.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
happening of any event of the kind described in subsection (3)(F) of this
subsection (c), such holder will forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement until such
holder's receipt of copies of the supplemented or amended Prospectus as
contemplated by subsection (11) of this subsection (c), or until it is advised
in writing (the "Advice") by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings that
are incorporated by reference in the Prospectus, and, if so directed by the
Company, such holder will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such holder's possession, of
the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. In the event the Company shall give any such notice, the
time periods referred to in subsection (2) of this subsection (c) shall be
extended by the number of days during the period from and including the date of
the giving of such notice to and including the date when each seller of
Registrable Securities covered by such Registration Statement shall have
received the copies of the supplemented or amended prospectus contemplated by
subsection (11) of this subsection (c) or the Advice.
(d) RESTRICTIONS ON PUBLIC SALE.
(1) PUBLIC SALE BY HOLDERS OF REGISTRABLE SECURITIES.
To the extent not inconsistent with applicable law, each Stockholder, if
requested by the managing underwriter or underwriters for any such Registration,
agrees not to effect any public sale or distribution of Company Securities
including a sale pursuant to Rule 144 (or any similar provision then in force)
under the Securities Act, during the 15 business days prior to, and during the
ninety (90)-day period (or such shorter period as may be agreed to by such
holders) beginning on, the effective date of the applicable Registration
Statement (except as part of such Registration).
(2) PUBLIC SALE BY THE COMPANY AND OTHERS. If
requested by the managing underwriter or underwriters for any underwritten
Registration, (i) the Company will not effect any public sale or distribution of
Company Securities during the fifteen (15) business days prior to, and during
the ninety (90)-day period beginning on the effective date of such Registration
and (ii) the Company will cause each holder of Company Securities purchased from
the Company at any time after the date of this Agreement (other than in a
registered public
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offering) to agree not to effect any public sale or distribution of any such
securities during such period described in clause (i) above (except as part of
such Registration, if otherwise permitted).
(e) REGISTRATION EXPENSES.
(1) All expenses incident to the Company's
performance of or compliance with this Agreement will be borne by the Company,
including, without limitation, all registration and filing fees, printing fees,
fees of transfer agents, costs of insurance and the fees and expenses of the
counsel and accountants for the Company (including the expenses of any "cold
comfort" letters and special audits required by or incident to the performance
of such Persons), all other costs and expenses of the Company incident to the
preparation, printing and filing under the Securities Act of the Registration
Statement (and all amendments and supplements thereto) and furnishing copies
thereof and of the Prospectus included therein, the costs and expenses incurred
by the Company in connection with the qualification of the Registrable
Securities under the state securities or "blue sky" laws of various
jurisdictions, the costs and expenses associated with filings required to be
made with the NASD (including, if applicable, the fees and expenses of any
"qualified independent underwriter" and its counsel as may be required by the
rules and regulations of the NASD), the costs and expenses of listing the
Registrable Securities for trading on a national securities exchange or
authorizing them for trading on NASDAQ and all other costs and expenses incurred
by the Company in connection with any Registration hereunder; PROVIDED, that,
except as otherwise provided in subsection (2) below, each Stockholder shall
bear the costs and expenses of any underwriters' commissions, brokerage fees or
transfer taxes relating to the Registrable Securities sold by such Stockholders
and the fees and expenses of any counsel, accountants or other representative
retained by Stockholder.
(2) Notwithstanding the foregoing and except as
provided below, in connection with each Registration hereunder, the Company will
reimburse the Stockholders who are holders of Registrable Securities being
registered in any Registration hereunder for (i) the reasonable fees and
disbursements of not more than one counsel, which counsel shall be chosen (x) by
the holders of a majority of the Registrable Securities to be included therein
that are held by the Demanding Group, in the case of a Demand Registration and
(y) otherwise, by the holders of a majority of all Registrable Securities to be
included therein, and (ii) the reasonable out-of-pocket expenses of the holders
of Registrable Securities in connection with such Registration, including travel
costs (if any).
(f) INDEMNIFICATION.
(1) INDEMNIFICATION BY THE COMPANY. The Company
agrees to indemnify, to the full extent permitted by law, each Stockholder, its
officers, directors, partners and agents and each Person who controls such
Stockholder (within the meaning of the Securities Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), against all losses,
claims, damages, liabilities and expenses, joint or several, caused by any
untrue or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary Prospectus, or any amendment
or supplement thereto, or any omission or alleged
-14-
omission to state therein a material fact necessary to make the statements
therein (in the case of a Prospectus or any preliminary Prospectus, or any
amendment or supplement thereto, in light of the circumstances under which they
were made) not misleading, except insofar as the same are caused by or contained
in any information with respect to such Stockholder furnished in writing to the
Company by such Stockholder or its representative expressly for use therein. The
Company will also indemnify underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the distribution,
their officers and directors and each Person who controls such Persons (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the holders of Registrable Securities;
PROVIDED, HOWEVER, if pursuant to an underwritten public offering of Registrable
Securities, the Company and any underwriters enter into an underwriting or
purchase agreement relating to such offering that contains provisions relating
to indemnification and contribution between the Company and such underwriters,
such provisions shall be deemed to govern indemnification and contribution as
between the Company and such underwriters. In such event, the indemnification of
the Sellers of Registrable Securities in such underwriting shall, at the
Sellers' request, be modified to conform to such terms and conditions of the
underwriting agreement.
(2) INDEMNIFICATION BY HOLDERS OF REGISTRABLE
SECURITIES. In connection with any Registration in which a Stockholder is
participating, each such Stockholder will furnish to the Company in writing such
information with respect to such Stockholder as the Company reasonably requests
for use in connection with any Registration Statement or Prospectus and agrees
to indemnify, severally and not jointly, to the full extent permitted by law,
the Company, the directors and officers of the Company signing the Registration
Statement and each Person who controls the Company (within the meaning of the
Securities Act and the Exchange Act) against any losses, claims, damages,
liabilities and expenses resulting from any untrue statement of a material fact
or any omission to state a material fact required to be stated therein or
necessary to make the statements in the Registration Statement or Prospectus or
preliminary Prospectus (in the case of the Prospectus or any preliminary
Prospectus, in light of the circumstances under which they were made) not
misleading, to the extent, but only to the extent, that such untrue statement or
omission is contained in any information with respect to such Stockholder so
furnished in writing by such Stockholder or its representative specifically for
inclusion therein; PROVIDED, HOWEVER, that the Stockholder's liability shall be
limited to the proportion of any such loss, claim, damage, liability or expense
which is equal to the proportion that the public offering price of shares sold
by such Seller under such Registration Statement bears to the total public
offering price of all securities sold thereunder, but shall in no event exceed
the net proceeds received by such Stockholder from the sale of shares pursuant
to such Registration Statement. The Company shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, to the same
extent as provided above with respect to information with respect to such
Persons or entities so furnished in writing by such Persons or entities or their
representatives specifically for inclusion in any Prospectus or Registration
Statement.
(3) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any
Person or entity entitled to indemnification hereunder will (i) give prompt
written notice to the indemnifying
-15-
party after the receipt by the indemnified party of a written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which such indemnified party will claim indemnification or
contribution pursuant to this Agreement; provided, however, that the failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding clauses (1) and (2),
unless and only if such failure to give notice results in the indemnifying
party's forfeiture of substantive rights or defenses and (ii) permit such
indemnifying party to participate and to the extent it desires, assume and
undertake the defense of such claim with counsel reasonably satisfactory to the
indemnified party , and, after notice from the indemnifying party to such
indemnified party of its election to assume and undertake the defense thereof,
the indemnifying party shall not be liable to such indemnified party under this
paragraph (f) for any legal expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of
investigation and of liaison with counsel so selected; PROVIDED, HOWEVER, that,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the indemnifying party or if the interests
of the indemnified party reasonably may be deemed to conflict with the interests
of the indemnifying party, the indemnified party shall have the right to select
a separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred. Whether or not such defense is
assumed by the indemnifying party, the indemnifying party will not be subject to
any liability for any settlement made without its consent (but such consent will
not be unreasonably withheld). No indemnifying party will consent to the entry
of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation. An indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the fees and expenses
of more than one counsel in any one jurisdiction for all parties indemnified by
such indemnifying party with respect to such claim, unless (i) in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim, (ii) the indemnifying party and such indemnified party shall have
mutually agreed to the retention of additional counsel or (iii) there may be
reasonable defenses available to the indemnified party which are different from,
or additional to those available to the other indemnified parties, in which
event the indemnifying party shall be obligated to pay the fees and expenses of
such additional counsel or counsels. Notwithstanding the foregoing, any
indemnified party shall always have the right to retain its own counsel in any
such action and the fees and disbursements of such counsel shall be at the
expense of the indemnified party except as otherwise provided above.
(4) CONTRIBUTION. If for any reason the
indemnification provided for in the preceding clauses (1) and (2) is not
available in full to an indemnified party as contemplated by the preceding
clauses (1) and (2), then the indemnifying party to the extent of such
unavailable indemnification shall contribute to the amount paid or payable by
the indemnified party as a result of such loss, claim, damage, liability or
expense in such proportion as is
-16-
appropriate to reflect not only the relative benefits received by the
indemnified party and the indemnifying party, but also the relative fault of the
indemnified party and the indemnifying party, as well as any other relevant
equitable considerations, provided that no Stockholder shall be required to
contribute in an amount greater than the difference between the net proceeds
received by such Stockholder with respect to the sale of any Shares and all
damages paid and amounts already contributed by such Stockholder with respect to
such claims, including amounts paid for any legal or other fees or expenses
incurred by such Stockholder. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who is not guilty of such fraudulent
misrepresentation. Upon the reasonable request of any Stockholder selling
Registrable Securities pursuant to a registration statement or any underwriter
of such stock, the Company shall obtain, if reasonably available, an insurance
policy covering the risks described above in this Section in an amount and with
a deductible as determined by the Company in its reasonable discretion and
naming such seller, any underwriter of such stock and any Person controlling
such seller or underwriter as beneficiaries. The costs of obtaining and
maintaining any such insurance shall be borne by the Company.
(g) RULE 144. The Company agrees that at all times after it
has filed a registration statement pursuant to the requirements of the
Securities Act relating to any class of equity securities of the Company, it
will file in a timely manner all reports required to be filed by it pursuant to
the Securities Act and the Exchange Act and will take such further action as any
holder of Registrable Securities may reasonably request in order that such
holder may effect sales of Company Securities pursuant to Rule 144. At any
reasonable time and upon request of any Stockholder, the Company will furnish
such Stockholder with a copy of the most recent annual and quarterly report of
the Company and such other information as may be necessary to enable the
Stockholder to effect sales of Company Securities pursuant to Rule 144 under the
Securities Act and will deliver to such Stockholder a written statement as to
whether it has complied with such requirements.
(h) PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No
Stockholder may participate in any underwritten Registration hereunder unless
such Stockholder (i) agrees to sell its Registrable Securities on the basis
provided in any underwriting arrangements, and (ii) accurately completes in a
timely manner and executes all questionnaires, powers of attorney, underwriting
agreements and other documents customarily required under the terms of such
underwriting arrangements, provided that the representations and warranties of
any Stockholder therein shall be limited to its title to the Registrable
Securities to be sold and other matters within its knowledge.
(i) OTHER REGISTRATION RIGHTS. The Company has not and will
not grant to any Person (including the Stockholders) any demand or piggyback
registration rights with respect to the Company Securities other than piggyback
registration rights that are not inconsistent with the terms of this Section 3.
To the extent that the Company grants to any Person registration rights with
respect to any securities of the Company having provisions more favorable to the
holders thereof than the provisions contained in this Agreement, the Company
will confer comparable rights to the holders of Registrable Securities under
this Agreement. Except as provided herein,
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the Company will not grant any registration rights that would permit any Person
or entity the right to piggyback on any Demand Registration.
(j) DEFINITION OF REGISTRABLE SECURITIES. "Registrable
Securities" means (x) any shares of Common Stock into which the Preferred Shares
shall have been converted or may be converted pursuant to the terms thereof or
(y) any shares of Common Stock purchased upon the exercise of those certain
common stock purchase warrants issued pursuant to the Note Purchase Agreement
dated as of September 8, 1998 between the Company and certain of the
Stockholders (or any warrants issued in exchange for such warrants), but with
respect to any share, only until such time as such share (i) has been
effectively registered under the Securities Act and disposed of in accordance
with the Registration Statement covering it or (ii) has been sold to the public
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act and the Legend referred to in Section 10(a) has been removed from
the certificate representing such share.
(k) AMENDMENTS AND WAIVERS. The provisions of this Section 3,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers of or consents to departures from the provisions
hereof may not be given unless approved by the Company in writing and the
Company has obtained the written consent of Stockholders holding at least 90% of
the then outstanding Registrable Securities.
Section 4. GOVERNANCE.
(a) On the date hereof, the Board of Directors of the Company
shall consist solely of the following members: Xxxxxxxxxxx XxXxxxxx, a Designee
of Siebel or the holders of the Series B Preferred Stock (as hereinafter
provided), Xxxxxxxx Xxxxxxxx, Xxxx Xxxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxxx
Xxxxx, Xxx Xxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx Xxxx and Xxxxxxx X. Xxxxxx
(collectively, the "Directors"). All Stockholders agree to vote or execute a
written consent to effect the election of such Directors to take office
immediately upon execution hereof.
(b) The Company's Board of Directors shall be composed of
eleven directors, and the Company and each Stockholder hereby agrees to take, at
any time and from time to time, all action necessary (including, without
limitation, voting the shares of Company Securities owned or controlled by such
Stockholder, calling special meetings of stockholders and executing and
delivering written consents) such that:
(A) The Board of Directors shall include at all times
a person designated by each Investor (treating Blue Chip and Miami as one
Investor, Grotech and Grotech II as one Investor, Venrock and Venrock II as one
Investor, and Xxxxxx and Xxxxxx II as one Investor), and shall, at the option of
Siebel Systems, Inc. ("Siebel"), include a person designated by Siebel.
(B) Xxxxxxxxxxx XxXxxxxx, so long as he is the Chief
Executive Officer of the Company, shall be a member of the Board of Directors.
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(C) In the event that Siebel has chosen not to
designate a member of the Board of Directors or fails to designate a replacement
for any prior designee, the holders of a majority of the Series B Preferred
Stock shall be given the right to designate a member of the Board of Directors.
(D) Three directors shall be elected annually and
shall be independent of the Company and of each of the Investors, as nominated
annually by Xxxxxxxxxxx XxXxxxxx, so long as he is the Chief Executive Officer,
subject to the consent of the holders of a majority of the outstanding Series A
Preferred Stock and the holders of 66 2/3% of the outstanding Series B Preferred
Stock, such consent not to be unreasonably withheld.
(c) The Board of Directors shall at all times have (i) an
Executive Committee, which shall have the right to exercise all powers of the
Board of Directors to the maximum extent permitted to be exercised by such
committees pursuant to the Delaware General Corporation Law, (ii) an Audit
Committee which will be responsible for reviewing the results and scope of
audits and other services provided by the Company's independent auditors, and
(iii) a Compensation Committee responsible for making recommendations concerning
salaries and incentive compensation. The Executive Committee will meet at least
monthly during the 12-month period following the date of this Agreement. The
Audit and Compensation Committees shall meet as needed but not less than twice
during the 12-month period following the date of this Agreement. Each
Stockholder hereby agrees to take, at any time and from time to time, all action
necessary (including, without limitation, voting the Company Securities owned or
controlled by such Stockholder, calling special meetings of Stockholders and
delivering written consents) such that:
(A) the Executive Committee shall consist at all
times of seven directors and shall include at all times the Chief Executive
Officer of the Company and a person designated by each Investor (treating Blue
Chip and Miami as one Investor, Grotech and Grotech II as one Investor, Venrock
and Venrock II as one Investor, and Xxxxxx and Xxxxxx II as one Investor); and
(B) the Audit Committee shall consist at all times of
at least three directors and shall include at all times a person designated by
Whitney.
(C) the Compensation Committee shall consist at all
times of at least three directors and shall include at all times a person
designated by Whitney.
(d) No director or member of a Committee may be removed
except by the holders of a majority of the Company Securities entitled to
appoint such director or member in accordance with Section 4(b) or Section 4(c),
respectively, and each Stockholder hereby agrees to take all action necessary
(including, without limitation, voting the shares of the Company's voting
securities owned or controlled by such Stockholder, calling special meetings of
stockholders and executing and delivering written consents) for the purpose of
accomplishing the foregoing. If a vacancy on the Board of Directors or a
Committee occurs by reason of the death, removal, resignation, retirement or
election not to serve of a designee, the remaining directors and the Company
shall cause the vacancy thereby created to be filled by a new designee as soon
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as possible, who is designated in the manner and by the persons specified in
Section 4(b) and the Company and each Stockholder hereby agrees to take, at any
time and from time to time, all actions necessary to accomplish the same;
PROVIDED, HOWEVER, that if any group fails to designate a representative in
accordance with Section 4(b) above for a period of thirty (30) consecutive days,
then such vacancy shall be filled by a vote of all of the stockholders of the
Company until such time as the board member is designated in accordance with
Section 4(b). Each of Xxxxxx Xxxxxx Media Partners, L.P. ("Xxxxxx Xxxxxx"), and
Whitney, if it has not designated a member of the Board of Directors pursuant to
Section 4(b)(A), shall have the right to designate one person to act as a
non-voting observer (each an "Observer"). Each Observer shall receive (at the
same time as the directors) copies of all notices of meetings of directors,
written consents of directors circulated for signature and other materials and
documents distributed or provided to the Directors and shall have the right to
attend all meetings of the board of directors (whether held in person or by
conference telephone call).
(e) Members of the Board of Directors and Observers shall be
entitled to reimbursement of expenses pursuant to policies to be adopted by the
Board of Directors. The Company shall obtain and maintain at all times during
which this Agreement remains in effect, at the cost and expense of the Company,
director and officer liability insurance policies covering all of the officers
and members of the Board of Directors in the amount of at least $3,000,000 upon
terms and pricing customary for a company of its size and operating industry;
provided that the Company is not obligated to purchase such insurance in the
event these such terms and pricing are not commercially available. Such director
liability insurance policies shall be provided by a reputable nationally
recognized insurance carrier and shall provide coverage in such amounts and on
such terms as may be reasonably acceptable to each member of the Board of
Directors.
Section 5. PREEMPTIVE RIGHTS.
If the Company proposes to issue or sell any Common
Stock, or any other class of capital stock, or any warrants, options or rights
to acquire, convertible into or exchangeable for any shares of capital stock of
the Company, or any security having a direct or indirect equity participation in
the Company (for purposes hereof, "New Securities"), other than (i) in a public
offering registered under the Securities Act, (ii) pursuant to a stock split,
dividend or other recapitalization, or the issuance of Common Stock upon the
conversion of the Series A Preferred Stock or Series B Preferred Stock, (iii)
pursuant to the Employee Stock Option Plan or in connection with the exercise of
currently outstanding warrants (or warrants issued in exchange therefor with
like terms for a like number of shares of Common Stock but with an exercise
price greater than the exercise price of the original warrant) or currently
outstanding options or options received pursuant to the Employee Stock Option
Plan or (iv) with the consent of holders of at least 66 2/3% of the outstanding
Series A Preferred Stock and holders of at least 66 2/3% of the outstanding
Series B Preferred Stock, then the Company shall deliver written notice thereof
to each of the Stockholders setting forth the number, terms and purchase
consideration (or if such purchase consideration is not expressed in cash, the
fair market value cash equivalent thereof determined in good faith by the Board
of Directors of the Company) of the New Securities which the Company proposes to
issue. Each such Stockholder shall thereupon have the right, unless otherwise
agreed in writing by such Stockholder in advance, to elect to purchase on the
same
-20-
terms and conditions (including consideration or the cash equivalent thereof) as
those offered to any third party that number of New Securities proposed to be
issued as would maintain such Stockholder's relative proportional equity
interest in the Company. Such Stockholder may make such election by written
notice to the Company within twenty (20) days of receipt of notice of any
proposed issuance of New Securities. If a Stockholder does not elect to purchase
its pro rata portion of New Securities within twenty (20) days of the date of
the foregoing notice (the "Preemptive Notice Period"), this pro rata purchase
right shall terminate with respect to the New Securities described in the
written notice delivered to that party (but not with respect to any future
proposed sales of New Securities by the Company), and the Company may, in its
sole discretion, sell to third parties within ninety (90) days after such
Stockholder's receipt of the notice of the proposed issuance of New Securities
any or all of the New Securities described in such written notice with respect
to which the purchase right was not exercised, but only on the terms and
conditions set forth in such written notice to the Stockholders. Subject to the
Company's rights under the preceding sentence, in which case any purchases by
existing Stockholders would be made at the closing and upon the terms of the
sale of New Securities to the third party permitted by the preceding sentence,
the closing of the purchase of the New Securities by the Stockholders shall take
place at the principal office of the Company on the thirtieth (30th) business
day after the expiration of the Preemptive Notice Period (or after the receipt
of any required governmental consents or approvals). At such closing, the
Stockholders desiring to purchase New Securities shall deliver a certified check
or checks in the appropriate amount to the Company against delivery of
certificates representing the New Securities so purchased. The Company shall not
sell any New Securities to any Person unless such Person agrees, in form and
substance reasonably satisfactory to the Stockholders, to be bound by the terms
hereof as a Stockholder.
Section 6. INTENTIONALLY OMITTED.
Section 7. ACCESS AND REPORTS, CONFIDENTIALITY.
(a) As promptly as possible after the end of each month,
quarter and year, but not later than twenty (20) days after each month-end and
quarter-end and ninety (90) days after each year-end, the Company shall deliver
to each of the Stockholders consolidated financial statements (consisting of a
balance sheet and statements of income and cash flows and notes thereto) for
such period prepared in accordance with generally accepted United States
accounting principles, provided, however, that the monthly and quarterly
financial statements shall not be required to have footnotes and may be subject
to normal year-end adjustments, none of which will be materially adverse. Such
financial statements shall include in comparative form any available figures as
projected or planned and figures for the corresponding periods of the previous
fiscal year, all in reasonable detail. The annual financial statements shall be
accompanied by an audit opinion thereon of an independent certified public
accounting firm of national reputation acceptable to the Investors. The
quarterly and annual financial statements shall be accompanied by management's
narrative description and analysis in reasonable detail of the Company's results
of operations and financial condition. All financial statements shall be
-21-
accompanied by a certificate of the chief financial officer, controller or chief
executive officer of the Company to the effect that they are true and correct in
all material respects and accurately reflect the consolidated financial
condition of the Company and its consolidated results of operations and cash
flows at the date and for the periods indicated.
(b) The Company shall promptly provide each of the Purchasers
with such other financial and business information as such Purchaser may
reasonably request at any time and from time to time.
(c) The Company shall, upon receipt of reasonable notice,
permit each of the Investors, Xxxxxx Xxxxxx and Arbor and any of their
respective representatives to visit and inspect any of the properties or
facilities of the Company or any subsidiary during normal business hours and to
review their respective books and records (and to make extracts therefrom) and
to discuss the Company's affairs, finances and accounts with its officers,
employees and independent public accountants. Nothing provided herein shall be
deemed in any way to limit the rights of the Stockholders purchasing Series B
Preferred Stock pursuant to Article 7 of the Stock Purchase Agreement
Section 8. OTHER AFFIRMATIVE COVENANTS. Unless compliance is waived in
writing in advance by each of the Purchasers that has designated a member of the
Board of Directors or Observer pursuant to Section 4 hereof (except in the case
of Section 8(g), compliance with which shall not be subject to waiver), the
Company shall, and shall cause each of its subsidiaries to:
(a) prepare an annual fiscal year operating budget, which
shall include monthly capital and operating expense budgets, cash flow
statements, capital expenditure budgets, profit and loss projections and
employee hiring projections, and submit it for approval to the Executive
Committee of its Board of Directors at least fifteen (15) days prior to the
commencement of the year covered thereby (each such budget, as approved by such
Executive Committee, a "Budget");
(b) pay when due all taxes and file any tax returns when due;
(c) comply with all laws, rules and regulations applicable to
it;
(d) maintain all of its properties in good working order,
ordinary wear and tear excluded;
(e) maintain its corporate existence;
(f) maintain with credit-worthy insurers insurance in such
amounts and of such types as are maintained by prudent firms of similar size
engaged in businesses similar to the Business, and, subject to the exceptions
set forth in Section 4(e) above, obtain directors and officers liability
insurance with a limit of coverage of at least $3,000,000 as set forth above in
Section 4(e); and
-22-
(g) provide each of the Purchasers that has designated a
member of the Board of Directors or Observer pursuant to Section 4 hereof with
the information provided in Section 8(a) when submitted for approval to the
Board of Directors of the Company and prompt written notice of the occurrence of
(i) any default or breach by the Company or any subsidiary or any shareholder of
any of its representations, warranties or covenants under the Stock Purchase
Agreement or this Agreement, (ii) any default under this Agreement or violation
of the Company's Certificate of Incorporation or Bylaws, (iii) any event which,
with the passage of time or notice, would result in such a default, (iv) any
material adverse change in the Condition of the Company or (v) any event which
is reasonably likely to cause any of the matters described in clause (iv) above.
Section 9. TERMINATION AND AMENDMENT.
The provisions of Sections 2, 4, 5, 7 and 8 of this Agreement shall
terminate upon the earlier of (i) the consummation of an underwritten public
offering of Common Stock representing not less than $300 million pre-money
valuation of the Company's fully-diluted common equity, resulting in net
proceeds to the Company of not less than $50 million, or (ii) the consummation
of any merger of the Company with and into a company whose common stock is
publicly traded on a national securities exchange or NASDAQ (each an
"Exchange"), in which at least 90% of the merger consideration is composed of
registered securities listed on an Exchange and/or cash, and where as a result
of such merger the holders of the Company's equity securities immediately prior
to the merger own equity securities of the surviving publicly traded company
with less than 50% of the voting power of its outstanding securities;
notwithstanding the foregoing, so long as Whitney holds at least 75% of the
Company Securities held by it on the date hereof, the right of Whitney to
designate a member of the Board of Directors shall survive any termination of
Section 4 until the date that is two years from the date hereof. The provisions
of this Agreement may be modified or amended by the written agreement of the
Stockholders; PROVIDED, HOWEVER, that amendments of or modifications to Section
3 will be subject to the requirements of Section 3(k). The provisions of this
Agreement shall terminate as to any Stockholder at such time as such Stockholder
no longer holds any capital stock of the Company.
Section 10. MISCELLANEOUS.
(a) LEGEND. The certificates representing the capital stock of
the Company held by each of the Stockholders shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS SET FORTH
-23-
IN THE AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT, DATED
DECEMBER 31, 1998. A COPY OF SUCH AGREEMENT MAY BE OBTAINED
FROM THE COMPANY UPON REQUEST."
If any capital stock of the Company becomes eligible for sale pursuant to Rule
144(k) promulgated under the Securities Act, the Company shall, upon the request
of any holder of such capital stock, remove the legend set forth in this Section
10(a) from the certificates evidencing the shares of such capital sock held by
such holder. In addition, (i) in connection with any Transfer of shares of any
capital stock of the Company pursuant to any public offering registered under
the Securities Act or pursuant to Rule 144 or Rule 144A (or any similar rule or
rules then in effect promulgated under the Securities Act) if such rule is
available or (ii) if the holder of any shares of capital stock of the Company
delivers to the Company an opinion of counsel reasonably acceptable to the
Company that no subsequent Transfer of such shares shall require registration
under the Securities Act, the Company shall promptly upon such Transfer deliver
new certificates for such shares which do not bear the legend set forth in this
Section 10(a).
(b) SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement shall
be binding upon and inure to the benefit of the parties hereto, their respective
legal representatives, heirs, legatees, successors and permitted assigns
(including any party to which any Stockholder has Transferred Shares if such
party is required under Section 2(a) to become bound hereby). The Company
covenants and agrees that it will not issue Preferred Shares to any Person
unless such Person, prior to such issuance, agrees in writing to be bound by
this Agreement, as amended or modified prior to the date of such issuance, to
the same extent and in the same manner as the other parties hereto. Each such
supplementary agreement shall become effective upon its execution by the Company
and such Person acquiring such shares, and it shall not require the signatures
or the consent of any other party hereto. Upon such execution such Person shall
be bound by all the restrictions placed on the Stockholders by this Agreement
and all actions taken by the Stockholders and the Company pursuant to this
Agreement prior to the execution of such supplementary agreement, shall be
subject to any additional restrictions set forth in such supplementary agreement
and shall enjoy only such rights as are specifically set forth in such
supplementary agreement. Notwithstanding anything to the contrary set forth
herein, shares sold by a Stock holder to the public pursuant to an effective
Registration Statement shall no longer be subject to any of the provisions of
this Agreement.
(c) SPECIFIC PERFORMANCE, ETC. The Company and each
Stockholder, in addition to being entitled to exercise all rights provided
herein, in the Company's Certificate of Incorporation or granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement, without the requirement of bond. The Company agrees
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of this Agreement and hereby
agrees to waive the defense in any action for specific performance that a remedy
at law would be adequate.
(d) GOVERNING LAW. As to matters of corporate law, this
Agreement shall be governed by and construed in accordance with the Delaware
General Corporation Law. As to all
-24-
other matters, this Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York.
(e) INTERPRETATION. The headings of the sections contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not affect the meaning or interpretation of
this Agreement.
(f) NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, or sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, three (3) business days after the date of deposit in
the United States mail, by certified mail return receipt requested, as follows:
(i) If to the Company to:
USinternetworking, Inc.
One USi Plaza
000 Xxxxxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. XxXxxxxx
with a copy to:
Xxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
(ii) If to the Stockholders, at the address set forth on
Exhibit A hereto.
(g) INSPECTION AND COMPLIANCE WITH LAW. Copies of this
Agreement will be available for inspection or copying by any Stockholder at the
offices of the Company through the Secretary of the Company.
(h) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this paragraph (h) but excluding the provisions of
Section 3(k), may not be amended, modified or supplemented, and waivers of or
consents to departures from the provisions hereof may not be given, except by a
written instrument executed by all of the parties hereto. No action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action. The waiver by any party hereto of a breach of any provision
of this
-25-
Agreement shall not operate or be construed as waiver of any preceding or
succeeding breach and no failure by any party to exercise any right or privilege
hereunder shall be deemed a waiver of such party's rights or privileges
hereunder or shall be deemed a waiver of such party's rights to exercise the
same at any subsequent time or times hereunder.
(i) TRANSFERS VOID. Any Transfer of any security of the
Company in violation of this Agreement shall be null and void and the Company
covenants and agrees that it will not register or otherwise recognize a Transfer
(whether for the purposes of shareholder voting or in connection with the
distribution of dividends or other corporate assets) of any securities which it
has reason to believe was effected in violation of this Agreement.
(j) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, by the original parties hereto and any successor in interest,
each of which shall be deemed to be an original and all of which together shall
be deemed to constitute one and the same agreement.
(k) ATTORNEYS' FEES. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
(l) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby.
(m) CHANGES IN COMMON STOCK. If, and as often as, there are
any changes in the Common Stock by way of stock split, stock dividend,
combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof, as may be required, so that
the rights and privileges granted hereby shall continue with respect to the
Common Stock as so changed.
(n) REPRESENTATIONS AND WARRANTIES OF EACH PARTY HERETO. Each
party to this Agreement severally but not jointly represents and warrants as to
itself only to each of the other parties hereto as follows (which
representations and warranties shall survive the execution and delivery of this
Agreement):
(1) The execution, delivery and performance of this
Agreement by such party have been duly authorized by all requisite corporate,
partnership or other action and will not violate any provision of law, any order
of any court or other agency of government, the constituent or governing
documents of such party, or any provision of any indenture, agreement or other
instrument to which it or any of its properties or assets is bound, or conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any such indenture, agreement or other instrument, or
result in the creation or imposition of any lien,
-26-
charge or encumbrance of any nature whatsoever upon any of the properties or
assets of the party.
(2) This Agreement has been duly executed and
delivered by such party and constitutes the legal, valid and binding obligation
of such party, enforceable in accordance with its terms.
(o) ENTIRE AGREEMENT. This Agreement together with the Stock
Purchase Agreement constitutes the entire agreement among the undersigned with
respect to matters or understandings involving the ownership, control or
disposition of their Company Securities and supersedes any and all prior
agreements or understandings, oral or written, among any or all of the
undersigned relating to such ownership, control or disposition.
(p) SIGNATURES; COUNTERPARTS. Telefacsimile transmissions of
any executed original documents and/or retransmission of any executed
telefacsimile transmissions shall be deemed to be the same as the delivery of an
executed original. At the request of any party hereto, the other parties hereto
shall confirm telefacsimile transmissions by executing duplicate original
documents and delivering the same to the requesting party or parties.
(q) REPRESENTATION OF THE COMPANY. The Company hereby
represents and warrants (i) that the Company Securities held of record by the
Stockholders represent 100% of the outstanding shares of Common Stock of the
Company calculated on a fully-diluted basis and (ii) the Company is not party to
any Agreement with any Stockholder granting such Stockholder any approval or
consent rights over actions by the Company other than this Agreement or as
provided in the Amended and Restated Certificate of Incorporation.
-27-
IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Stockholders' Agreement as of the date first above written.
USINTERNETWORKING, INC.
a Delaware corporation
By:
-------------------------------------
Xxxxxxxxxxx X. XxXxxxxx, President
BLUE CHIP CAPITAL FUND II LIMITED
PARTNERSHIP
By: BLUE CHIP VENTURE COMPANY, LTD.
Its General Partner
By:
------------------------------------
Xxxx X. Xxxxx
Manager
MIAMI VALLEY VENTURE FUND L.P.
By: BLUE CHIP VENTURE COMPANY OF
DAYTON, LTD.
Its Special Limited Partner
By:
------------------------------------
Xxxx X. Xxxxx
Manager
-28-
GROTECH PARTNERS IV L.P.
By: GROTECH CAPITAL GROUP IV, LLC
Its General Partner
By:
------------------------------------
Name:
Title:
GROTECH PARTNERS V L.P.
By: GROTECH CAPITAL GROUP V, LLC
Its General Partner
By:
------------------------------------
Name:
Title:
SOUTHERN VENTURE FUND SBIC, L.P.
By: SVF SBIC, L.P.
Its General Partner
By:
------------------------------------
Partner
By:
------------------------------------
Partner
SOUTHERN VENTURE FUND II, L.P.
By:
-------------------------------------
General Partner
-29-
VENROCK ASSOCIATES
By:
------------------------------------
General Partner
VENROCK ASSOCIATES II, L.P.
By:
------------------------------------
General Partner
USI PARTNERS, LTD.
By:
------------------------------------
US West Communications, Inc.
By:
------------------------------------
----------------------------------------
Xxxxxxxxxxx X. XxXxxxxx
----------------------------------------
Xxxxx XxXxxxx
----------------------------------------
Xxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxxx
-30-
Xxxxx X. Xxxxxxxxxxx
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
Xxxxxxxxxxx de Roetth
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
Elisabeth de Roetth
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
----------------------------------------
Xxxxx de Roetth
Xxxxxxxx XxXxxx
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
-31-
Xxxxxxxxxxx Xxxx
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
Xxxxxxx X. Xxxx
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
Xxxxxxx X. Xxxx
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
Xxxxxxx X. and Xxxxxxx X. Xxxx
Grandchildren's Trust
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
Xxxxxx X. Xxxx
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
-32-
Xxxxx Xxxxxx
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
Xxxxx X. Xxxxxx
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
Xxxxxxx X. Xxxxxx
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
Xxxxx X. Xxxxxxx
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
Xxxxxxx X. Xxxxxx
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
-33-
Xxxx X. Xxxxxxxxxx
By: ACCOUNT MANAGEMENT CORPORATION, poa
By:
-------------------------------------
Xxxxx Xxxxxx
HAGC Partners
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
X. X. XXXXXXX III, L.P.
By: X. X. XXXXXXX EQUITY PARTNERS III,
LLC,
----------------------------------
Its General Partner
By:
-------------------------------------
Name:
Title: A Managing Member
SIEBEL SYSTEMS, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
XXXXXX-XXXXXX MEDIA PARTNERS, L.P.
By:
-------------------------------------
-34-
ARBOR VENTURE PARTNERS, L.L.C.
By:
-------------------------------------
SOUTHEASTERN TECHNOLOGY FUND, L.P.
By:
-------------------------------------
PNC BANK, N.A., TRUSTEE
By:
-------------------------------------
Name:
Title:
PNC BANK, N.A., CUSTODIAN
By:
-------------------------------------
Name:
Title:
AEH PROFIT SHARING TRUST
By:
-------------------------------------
Name:
Title:
-35-
WHITNEY STRATEGIC PARTNERS
III, L.P.
By: X. X. Xxxxxxx Equity Partners III,
LLC,
Its General Partner
By:
--------------------------------------
Name:
A Managing Member
XXXXXXXXXX MANAGEMENT COMPANY
An Ohio General Partnership
By:
-------------------------------------
General Partner
-36-
EXHIBIT A
STOCKHOLDERS
Blue Chip Capital Fund II Limited Partnership, an Ohio limited partnership
("Blue Chip")
Miami Valley Venture Fund L.P., an Ohio limited partnership ("Miami")
Grotech Partners IV L.P., a Delaware limited partnership ("Grotech")
Grotech Partners V L.P., a Delaware limited partnership ("Grotech II")
Southern Venture Fund SBIC, L.P., a Delaware limited partnership ("Xxxxxx")
Southern Venture Fund II, L.P., a Delaware Limited Partnership ("Xxxxxx II")
Venrock Associates, a New York limited partnership ("Venrock")
Venrock Associates II, L.P., a New York limited partnership ("Venrock II")
USi Partners, Ltd., an Ohio limited liability company ("USi Partners")
US WEST Communications, Inc., a Colorado corporation ("US West")
HAGC Partners
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxxxxx
Xxxxxxxxxxx de Roetth
Elisabeth de Roetth
Xxxxx de Roetth
Xxxxxxxx XxXxxx
Xxxxxxxxxxx Xxxx
Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
-37-
Xxxxxxx X. and Xxxxxxx X. Xxxx Grandchildren's Trust
Xxxxxx X. Xxxx
Xxxxx Xxxxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxxxxxx
Xxxxx Xxxxxx
X.X. Xxxxxxx III, L.P. ("X.X. Xxxxxxx")
Whitney Strategic Partners III, L.P. (together with X.X. Xxxxxxx, collectively,
"Whitney")
Xxxxxx Xxxxxx Media Partners, L.P. ("Xxxxxx Xxxxxx")
Siebel Systems, Inc.
Arbor Venture Partners, L.L.C. ("Arbor")
Southeastern Technology Fund, L.P.
PNC Bank, N.A., Trustee
PNC Bank, N.A., Custodian
AEH Profit Sharing Trust
Xxxxxxxxxxx X. XxXxxxxx
Xxxxxxx X. XxXxxxx
Xxxxxxxxxx Management Company
Xxxxxx X. Xxxxx
Xxxxx X. Xxxxxx
-38-
EXHIBIT B
INVESTORS
Blue Chip
Miami
Grotech
Grotech II
Xxxxxx
Xxxxxx II
Venrock
Venrock II
US Xxxx
Xxxxxxx
-39-
EXHIBIT C
PURCHASERS
Blue Chip
Miami
Grotech
Grotech II
Xxxxxx
Xxxxxx II
Venrock
Venrock II
USi Partners
US West
HAGC Partners
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxxxxx
Xxxxxxxxxxx de Roetth
Elisabeth de Roetth
Xxxxx de Roetth
Xxxxxxxx XxXxxx
Xxxxxxxxxxx Xxxx
Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
-40-
Xxxxxxx X. and Xxxxxxx X. Xxxx Grandchildren's Trust
Xxxxxx X. Xxxx
Xxxxx Xxxxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxxxxxx
Xxxxx Xxxxxx
Xxxxxxxxxxx X. XxXxxxxx (but only with respect to the Preferred Shares held by
him)
Xxxxxxx
Xxxxxx Xxxxxx
Siebel Systems, Inc.
Arbor Venture Partners, L.L.C.
Southeastern Technology Fund, L.P.
PNC Bank, N.A., Trustee
PNC Bank, N.A., Custodian
AEH Profit Sharing Trust
Xxxxxxxxxx Management Company
-41-
