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EXHIBIT 4.3
CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
MAY 18, 1999
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TABLE OF CONTENTS
Page
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1. Registration Rights......................................................................1
1.1 Definitions.....................................................................1
1.2 Request for Registration........................................................2
1.3 Company Registration............................................................4
1.4 Obligations of the Company......................................................4
1.5 Furnish Information.............................................................5
1.6 Expenses of Registration........................................................5
1.7 Underwriting Requirements.......................................................6
1.8 Delay of Registration...........................................................7
1.9 Indemnification.................................................................7
1.10 Reports Under Securities Exchange Act of 1934..................................9
1.11 Assignment of Registration Rights..............................................9
1.12 Market Stand-Off Agreement....................................................10
1.13 Form S-3 Registration.........................................................10
1.14 Termination of Registration Rights............................................11
2. Covenants of the Company................................................................11
2.1 Delivery of Financial Statements...............................................12
2.2 Inspection.....................................................................12
2.3 Termination of Information and Inspection Covenants............................12
2.4 Right of First Offer...........................................................13
2.5 Board of Directors.............................................................14
2.6 Sales by Founder...............................................................16
2.7 Key-Man Insurance..............................................................18
2.8 Observer Rights................................................................19
2.9 Restrictions on Future Issuance of Stock.......................................19
2.10 Termination of Certain Covenants..............................................20
3. Miscellaneous...........................................................................20
3.1 Successors and Assigns.........................................................20
3.2 Governing Law..................................................................20
3.3 Counterparts...................................................................20
3.4 Titles and Subtitles...........................................................20
3.5 Notices........................................................................20
3.6 Expenses.......................................................................20
3.7 Amendments and Waivers.........................................................20
3.8 Severability...................................................................21
3.9 Aggregation of Stock...........................................................21
3.10 Entire Agreement..............................................................21
3.11 Prior Agreement...............................................................21
3.12 Public Announcement...........................................................21
Schedule A Schedule of Investors
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AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT is made as
of the 18th day of May, 1999, by and among CyberGold, Inc., a California
corporation (the "Company"), and the investors listed on Schedule A hereto, each
of which is herein referred to as an "Investor" and A. Xxxxxxxxx Xxxxxxxxx (the
"Founder").
RECITALS
WHEREAS, the Company and certain of the Investors (the "Prior
Investors") possess registration and other investor rights granted pursuant to
that certain Amended and Restated Investors' Rights Agreement dated May 15,
1998, between the Company, the persons listed on the Schedule of Investors
attached thereto and A. Xxxxxxxxx Xxxxxxxxx (the "Prior Agreement");
WHEREAS, certain of the Investors (the "Series D Investors") are
parties to the Series D Preferred Stock and Warrant Purchase Agreement of even
date herewith (the "Series D Agreement") between the Company and the investors
listed on the Schedule of Investors attached thereto, pursuant to which the
Company will sell, and the Series D Investors will acquire, shares of the
Company's Series D Preferred Stock and warrants to purchase shares of the
Company's Series D Preferred Stock (the "Series D Warrants");
WHEREAS, in order to induce the Company to enter into the Series
D Agreement and to induce the Series D Investors to invest funds in the Company
pursuant to the Series D Agreement, the Prior Investors and the Company hereby
agree to waive their rights under the Prior Agreement, and the Investors and the
Company hereby agree that this Agreement shall govern the rights of the
Investors to cause the Company to register shares of Common Stock issuable to
the Investors and certain other matters as set forth herein; and
WHEREAS, the Series D Investors and the Company have agreed,
pursuant to the terms of the Series D Agreement, to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth herein, the Prior Investors hereby agree that the Prior
Agreement shall be superseded and replaced in its entirety by this Agreement,
and the parties hereto further agree as follows:
1. Registration Rights. The Company covenants and agrees as
follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "Act" means the Securities Act of 1933, as
amended.
(b) The term "Form S-3" means such form under the Act
as in effect on the date hereof or any registration form under the Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
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(c) The term "Holder" means any person owning or having
the right to acquire Registrable Securities or any assignee thereof in
accordance with Section 1.11 hereof.
(d) The term "1934 Act" shall mean the Securities Exchange
Act of 1934, as amended.
(e) The term "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(f) The term "Registrable Securities" means (i) the Common
Stock issuable or issued upon conversion of the Company's Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred
Stock, (ii) the Common Stock issuable or issued upon conversion of the Company's
Series D Preferred Stock issued upon exercise of the Series D Warrants, (iii)
any Common Stock of the Company issued upon exercise of the Warrant to Purchase
Shares of Capital Stock of CyberGold, Inc. dated July 2, 1996 between Intel
Corporation and the Company, and (iv) any Common Stock of the Company issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for, or in replacement of, the shares referenced in (i), (ii) and
(iii), above, excluding in all cases, however, any Registrable Securities sold
by a person in a transaction in which his rights under this Section 1 are not
assigned.
(g) The number of shares of "Registrable Securities"
outstanding shall be determined by the number of shares of Common Stock
outstanding that are, and the number of shares of Common Stock issuable pursuant
to then exercisable or convertible securities that are, Registrable Securities.
(h) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 Request for Registration.
(a) Subject to the conditions of this Section 1.2, if the
Company shall receive, at any time after six (6) months following the effective
date of the first registration statement for a public offering of securities of
the Company (other than a registration statement relating either to the sale of
securities to employees of the Company pursuant to a stock option, stock
purchase or similar plan or a SEC Rule 145 transaction), a written request from
the Holders of fifteen percent (15%) or more of the Registrable Securities then
outstanding that the Company file a registration statement under the Act
covering the registration of such Registrable Securities, then the Company
shall:
(i) within twenty (20) days of the receipt thereof,
give written notice of such request to all Holders; and
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(ii) subject to the limitations of subsection 1.2(b),
effect as soon as practicable, and in any event within sixty (60) days of the
receipt of such request, the registration under the Act of all Registrable
Securities which the Holders request to be registered in a written request
received by the Company within twenty (20) days of the mailing of such notice by
the Company in accordance with Section 3.5.
(b) If the Holders initiating the registration request
hereunder ("Initiating Holders") intend to distribute the Registrable Securities
covered by their request by means of an underwriting, they shall so advise the
Company as a part of their request made pursuant to subsection 1.2(a) and the
Company shall include such information in the written notice referred to in
subsection 1.2(a). The underwriter will be selected by the Holders of a majority
in interest of the shares to be registered in such registration and shall be
reasonably acceptable to the Company. In such event, the right of any Holder to
include his Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder) to
the extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company as provided in
subsection 1.4(e)) enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting. Notwithstanding
any other provision of this Section 1.2, if the underwriter advises the Company
in writing that marketing factors require a limitation of the number of shares
to be underwritten, then the Company shall so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant hereto, and the number
of shares of Registrable Securities that may be included in the underwriting
shall be allocated among all Holders thereof, including the Initiating Holders,
in proportion (as nearly as practicable) to the amount of Registrable Securities
of the Company owned by each Holder; provided, however, that the number of
shares of Registrable Securities to be included in such underwriting shall not
be reduced unless all other securities are first entirely excluded from the
underwriting.
(c) Notwithstanding the foregoing, if the Company shall
furnish to Holders requesting a registration statement pursuant to this Section
1.2, a certificate signed by the President of the Company stating that in the
good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such registration
statement to be filed and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer taking action
with respect to such filing for a period of not more than one hundred twenty
(120) days after receipt of the request of the Initiating Holders; provided,
however, that the Company may not utilize this right more than once in any
twelve (12) month period.
(d) In addition, the Company shall not be obligated to
effect, or to take any action to effect, any registration pursuant to this
Section 1.2:
(i) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration,
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unless the Company is already subject to service in such jurisdiction and except
as may be required under the Act;
(ii) After the Company has effected two (2)
registrations pursuant to this Section 1.2 and such registrations have been
declared or ordered effective;
(iii) During the period starting with the date sixty
(60) days prior to the Company's good faith estimate of the date of filing of,
and ending on a date one hundred eighty (180) days after the effective date of,
a registration subject to Section 1.3 hereof; provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; or
(iv) If the Initiating Holders propose to dispose of
shares of Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 1.13 below.
1.3 Company Registration. If (but without any obligation
to do so) the Company proposes to register (including for this purpose a
registration effected by the Company for itself, for the Holders or for
shareholders other than the Holders) any of its stock or other securities under
the Act in connection with the public offering of such securities solely for
cash (other than a registration relating solely to the sale of securities to
participants in a Company stock plan, a registration relating to a corporate
reorganization or other transaction under Rule 145 of the Act or a registration
in which the only Common Stock being registered is Common Stock issuable upon
conversion of debt securities which are also being registered), the Company
shall, at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given within twenty (20)
days after mailing of such notice by the Company in accordance with Section 3.5,
the Company shall, subject to the provisions of Section 1.7, use all reasonable
efforts to cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested to be registered.
1.4 Obligations of the Company. Whenever required under
Section 1.2 to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for a period of up to one hundred twenty
(120) days or until the distribution contemplated in the Registration Statement
has been completed; provided, however, that such 120-day period shall be
extended for a period of time equal to the period the Holder refrains from
selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration
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statement as may be necessary to comply with the provisions of the Act with
respect to the disposition of all securities covered by such registration
statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Act.
(e) In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered
by such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(g) Cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration.
1.5 Furnish Information. It shall be a condition precedent
to the obligations of the Company to take any action pursuant to Section 1.3
with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
1.6 Expenses of Registration. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Sections 1.2, 1.3 and 1.13,
including (without limitation) all registration, filing and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for the
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Company shall be borne by the Company. Notwithstanding the foregoing, the
Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Section 1.2 or Section 1.13 if the registration
request is subsequently withdrawn at the request of the Holders of a majority of
the Registrable Securities to be registered (in which case all participating
Holders shall bear such expenses pro rata based upon the number of Registrable
Securities that were to be requested in the withdrawn registration), unless, in
the case of a registration requested under Section 1.2, the Holders of a
majority of the Registrable Securities agree to forfeit their right to one
demand registration pursuant to Section 1.2; provided, however, that if at the
time of such withdrawal, the Holders have learned of a material adverse change
in the condition, business or prospects of the Company from that known to the
Holders at the time of their request and have withdrawn the request with
reasonable promptness following disclosure by the Company of such material
adverse change, then the Holders shall not be required to pay any such expenses
and shall retain their rights pursuant to Section 1.2.
1.7 Underwriting Requirements. In connection with any
offering involving an underwriting of shares of the Company's capital stock, the
Company shall not be required under Section 1.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by shareholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities to be
so included to be apportioned pro rata among the selling Holders according to
the total amount of securities entitled to be included therein owned by each
selling Holder or in such other proportions as shall mutually be agreed to by
such selling Holders) but in no event shall the Registrable Securities held by
the Holders to be included in the offering be reduced until all of the
securities, including Registrable Securities, of shareholders who are officers,
directors or employees of the Company are first excluded entirely from such
offering by the underwriters. Further, in no event shall the amount of
securities of the selling Holders included in the offering be reduced below ten
percent (10%) of the total amount of securities included in such offering,
unless such offering is the initial public offering of the Company's securities
in which case the selling Holders may be excluded entirely if the underwriters
make the determination described above and no other shareholder's securities are
included. For purposes of the preceding parenthetical concerning apportionment,
for any selling Holder that is a partnership or corporation, the partners,
retired partners and shareholders of such Holder, or the estates and family
members of any such partners and retired partners and any trusts for the benefit
of any of the foregoing persons shall be deemed to be a single "selling Holder,"
and any pro-rata reduction with respect to such "selling Holder" shall be based
upon the aggregate amount of Registrable Securities owned by all such related
entities and individuals.
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1.8 Delay of Registration. No Holder shall have any right
to obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
1.9 Indemnification. In the event any Registrable
Securities are included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, any underwriter (as defined in the Act)
for such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Act or the 1934 Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Act, or the 1934 Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, any state securities law or
any rule or regulation promulgated under the Act, or the 1934 Act or any state
securities law; and the Company will pay to each such Holder, underwriter or
controlling person, as incurred, any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability, or action; provided, however, that the indemnity agreement
contained in this subsection 1.9(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder
will indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, or the 1934 Act or other federal or state
law, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such Holder expressly
for use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this subsection 1.9(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
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provided, however, that the indemnity agreement contained in this subsection
1.9(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; provided, that,
in no event shall any indemnity under this subsection 1.9(b) exceed the gross
proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under
this Section 1.9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.9, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.9.
(d) If the indemnification provided for in this Section
1.9 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage, or expense
referred to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
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(f) The obligations of the Company and Holders under this
Section 1.9 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
1.10 Reports Under Securities Exchange Act of 1934. With a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144, at all times after ninety (90)
days after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as may
be reasonably requested in availing any Holder of any rule or regulation of the
SEC which permits the selling of any such securities without registration or
pursuant to such form.
1.11 Assignment of Registration Rights. The rights to
cause the Company to register Registrable Securities pursuant to this Section 1
may be assigned (but only with all related obligations) by a Holder to a
transferee or assignee of such securities that (i) is a subsidiary, parent,
partner, limited partner, retired partner or shareholder of a Holder, (ii) is a
Holder's family member or trust for an individual Holder, or (iii) after such
assignment or transfer, holds at least 25,000 shares of Registrable Securities
(subject to appropriate adjustment for stock splits, stock dividends,
combinations and other recapitalizations), provided: (a) the Company is, within
a reasonable time after such transfer, furnished with written notice of the name
and address of such transferee or assignee and the securities with respect to
which such registration rights are being assigned; (b) such transferee or
assignee agrees in writing to be bound by and subject to the terms and
conditions of this Agreement, including without limitation the provisions of
Section 1.12 below; and (c) such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Act. For the purposes of
determining the number of shares of Registrable Securities held by a transferee
or assignee, the holdings of transferees and assignees of a partnership who are
partners or retired partners of such partnership (including spouses and
ancestors, lineal descendants and siblings of such partners or spouses who
acquire Registrable Securities by gift, will or intestate succession) shall be
aggregated together and with the
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partnership; provided that all assignees and transferees who would not qualify
individually for assignment of registration rights shall have a single
attorney-in-fact for the purpose of exercising any rights, receiving notices or
taking any action under this Section 1.
1.12 "Market Stand-Off" Agreement. Each Holder hereby
agrees that it will not, without the prior written consent of the managing
underwriter, during the period commencing on the date of the final prospectus
relating to the Company's initial public offering and ending on the date
specified by the Company and the managing underwriter (such period not to exceed
one hundred eighty (l80) days) (i) lend, offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock (whether such
shares or any such securities are then owned by the Holder or are thereafter
acquired), or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing provisions of this Section 1.13 shall apply
only to the Company's initial public offering of equity securities, shall not
apply to the sale of any shares to an underwriter pursuant to an underwriting
agreement, and shall only be applicable to the Holders if all officers and
directors and greater than five percent (5%) shareholders of the Company enter
into similar agreements. The underwriters in connection with the Company's
initial public offering are intended third party beneficiaries of this Section
1.12 and shall have the right, power and authority to enforce the provisions
hereof as though they were a party hereto.
In order to enforce the foregoing covenant, the Company may
impose stop-transfer instructions with respect to the Registrable Securities of
each Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period. Notwithstanding the
foregoing, the obligations described in this Section 1.12 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms which may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-14 or Form S-15
or similar forms which may be promulgated in the future.
1.13 Form S-3 Registration. If the Company shall receive
from any Holder or Holders a written request or requests that the Company effect
a registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, the Company will:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders;
and
(b) as soon as practicable, effect such registration and
all such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are
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specified in such request, together with all or such portion of the Registrable
Securities of any other Holder or Holders joining in such request as are
specified in a written request given within fifteen (15) days after receipt of
such written notice from the Company; provided, however, that the Company shall
not be obligated to effect any such registration, qualification or compliance,
pursuant to this Section 1.13: (i) if Form S-3 is not available for such
offering by the Holders; (ii) if the Holders, together with the holders of any
other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public (net of any underwriter's discounts or
commissions) of less than $3,000,000; (iii) if the Company shall furnish to the
Holders a certificate signed by the President of the Company stating that in the
good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such Form S-3
Registration to be effected at such time, in which event the Company shall have
the right to defer the filing of the Form S-3 registration statement for a
period of not more than one hundred twenty (120) days after receipt of the
request of the Holder or Holders under this Section 1.13; provided, however,
that the Company shall not utilize this right more than once in any twelve (12)
month period; (iv) if the Company has, preceding the date of such request,
already effected three (3) registrations on Form S-3 for Holders pursuant to
this Section 1.13; (v) if the Company has, within the twelve (12) month period
preceding the date of such request, already effected two (2) registrations on
Form S-3 for the Holders pursuant to this Section 1.13; or (vi) in any
particular jurisdiction in which the Company would be required to qualify to do
business or to execute a general consent to service of process in effecting such
registration, qualification or compliance.
1.14 Termination of Registration Rights.
(a) No Holder shall be entitled to exercise any right
provided for in this Section 1 after five (5) years following the consummation
of the sale of securities pursuant to a registration statement filed by the
Company under the Act in connection with the initial firm commitment
underwritten offering of its securities to the general public.
(b) In addition, the right of any Holder to request
inclusion in any registration pursuant to Section 1.3 shall terminate as to such
Holder on the closing of the first Company-initiated registered public offering
of Common Stock of the Company if all shares of Registrable Securities held or
entitled to be held upon conversion by such Holder may immediately be sold under
Rule 144 during any ninety (90) day period, or on such date after the closing of
the first Company-initiated registered public offering of Common Stock of the
Company as all shares of Registrable Securities held or entitled to be held upon
conversion by such Holder may immediately be sold under Rule 144 during any
ninety (90) day period; provided, however, that the provisions of this Section
1.13(b) shall not apply to any Holder who owns more than two percent (2%) of the
Company's outstanding stock until such time as such Holder owns less than two
percent (2%) of the outstanding stock of the Company.
2. Covenants of the Company.
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2.1 Delivery of Financial Statements. The Company shall
deliver to each Investor:
(a) as soon as practicable, but in any event within ninety
(90) days after the end of each fiscal year of the Company, an income statement
for such fiscal year, a balance sheet of the Company and statement of
shareholder's equity as of the end of such year, and a statement of cash flows
such year, such year-end financial reports to be in reasonable detail, prepared
in accordance with generally accepted accounting principles and audited and
certified by independent public accountants of nationally recognized standing
selected by the Company;
(b) as soon as practicable, but in any event within
forty-five (45) days after the end of each of the first three (3) quarters of
each fiscal year of the Company, an unaudited income statement, statement of
cash flows for such fiscal quarter and an unaudited balance sheet and a
statement of shareholder's equity as of the end of such fiscal quarter;
(c) within thirty (30) days of the end of each month, an
unaudited income statement and statement of cash flows and balance sheet for and
as of the end of such month, in reasonable detail;
(d) as soon as practicable, but in any event thirty (30)
days prior to the end of each fiscal year, a budget and business plan for the
next fiscal year, prepared on a monthly basis, including balance sheets, income
statements and statements of cash flows for such months and, as soon as
prepared, any other budgets or revised budgets prepared by the Company; and
(e) such other information relating to the financial
condition, business, prospects or corporate affairs of the Company as the
Investor or any assignee of the Investor may from time to time request;
provided, however, that the Company shall not be obligated under this subsection
(e) or any other subsection of Section 2.1 to provide information which it deems
in good faith to be a trade secret or similar confidential information.
2.2 Inspection. The Company shall permit each Investor, at
such Investor's expense, to visit and inspect the Company's properties, to
examine its books of account and records and to discuss the Company's affairs,
finances and accounts with its officers, all at such reasonable times as may be
requested by the Investor; provided, however, that the Company shall not be
obligated pursuant to this Section 2.2 to provide access to any information
which it reasonably considers to be a trade secret or similar confidential
information.
2.3 Termination of Information and Inspection Covenants.
The covenants set forth in Sections 2.1 and 2.2 shall terminate as to Investors
and be of no further force or effect when the sale of securities pursuant to a
registration statement filed by the Company under the Act in connection with the
firm commitment underwritten offering of its securities to the general public is
consummated or when the Company first becomes subject to the periodic reporting
requirements of Sections 12(g) or 15(d) of the 1934 Act, whichever event shall
first occur.
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2.4 Right of First Offer. Subject to the terms and
conditions specified in this paragraph 2.4, the Company hereby grants to each
Investor a right of first offer with respect to future sales by the Company of
its Shares (as hereinafter defined). For purposes of this Section 2.4, Investor
includes any general partners and affiliates of an Investor. An Investor shall
be entitled to apportion the right of first offer hereby granted it among itself
and its partners and affiliates in such proportions as it deems appropriate.
Each time the Company proposes to offer any shares of, or
securities convertible into or exercisable for any shares of, any class of its
capital stock ("Shares"), the Company shall first make an offering of such
Shares to each Investor in accordance with the following provisions:
(a) The Company shall deliver a notice in accordance with
Section 3.5 ("Notice") to the Investors stating (i) its bona fide intention to
offer such Shares, (ii) the number of such Shares to be offered, and (iii) the
price and terms, if any, upon which it proposes to offer such Shares.
(b) By written notification received by the Company,
within twenty (20) calendar days after receipt of the Notice, the Investor may
elect to purchase or obtain, at the price and on the terms specified in the
Notice, up to that portion of such Shares which equals the proportion that the
number of shares of Common Stock issued and held, or issuable upon conversion of
the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock
or Series D Preferred Stock then held by such Investor bears to the total number
of shares of Common Stock of the Company then outstanding (assuming full
conversion and exercise of all convertible or exercisable securities). The
Company shall promptly, in writing, inform each Investor that elects to purchase
all the shares available to it (a "Fully Exercising Investor") of any other
Investor's failure to do likewise. During the ten (10) day period commencing
after such information is given, each Fully-Exercising Investor may elect to
purchase that portion of the Shares for which Investors were entitled to
subscribe but which were not subscribed for by the Investors that is equal to
the proportion that the number of shares of Common Stock issued and held, or
issuable upon conversion of Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock or Series D Preferred Stock then held, by such
Fully-Exercising Investor bears to the total number of shares of Common Stock
issued and held, or issuable upon conversion of the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock
then held, by all Fully-Exercising Investors that wish to purchase some of the
unsubscribed shares.
(c) If all Shares that Investors are entitled to obtain
pursuant to subsection 2.4(b) are not elected to be obtained as provided in
subsection 2.4(b) hereof, the Company may, during the ninety (90) day period
following the expiration of the period provided in subsection 2.4(b) hereof,
offer the remaining unsubscribed portion of such Shares to any person or persons
at a price not less than, and upon terms no more favorable to the offeree than
those specified in the Notice. If the Company does not enter into an agreement
for the sale of the Shares within such period, or if such agreement is not
consummated within ninety (90) days of
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the execution thereof, the right provided hereunder shall be deemed to be
revived and such Shares shall not be offered unless first reoffered to the
Investors in accordance herewith.
(d) The right of first offer in this paragraph 2.4 shall
not be applicable (i) to the issuance or sale of shares of Common Stock (or
options therefor) to employees for the primary purpose of soliciting or
retaining their employment, provided each employee executes an agreement in the
form then approved by the Company's Board of Directors and such grant or
issuance is approved by the Company's Board of Directors; (ii) to or after
consummation of a bona fide, firmly underwritten public offering of shares of
Common Stock, registered under the Act pursuant to a registration statement on
Form S-1, with an aggregate offering price of at least $15,000,000; (iii) the
issuance of securities pursuant to the conversion or exercise of convertible or
exercisable securities; (iv) the issuance of securities in connection with a
bona fide business acquisition of or by the Company, whether by merger,
consolidation, sale of assets, sale or exchange of stock or otherwise; or (v)
the issuance of stock, options, warrants or other securities or rights to
persons or entities with which the Company has business relationships (such as
consultants, directors, and personal property and equipment lease lines)
provided such issuances are for other than primarily equity financing purposes.
(e) The right of first offer set forth in this Section 2.4
may not be assigned or transferred.
2.5 Board of Directors.
(a) With respect to those members of the Company's Board
of Directors that the Articles of Incorporation provide are to be elected by the
holders of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock and Common Stock (voting together as a
single class and not as a separate series, and, with respect to the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock, on an as-converted basis), the Founder and the Investors hereby
agree to vote all of their shares of Common Stock and Preferred Stock now owned
or hereafter acquired as necessary to accomplish the nomination and election of
two (2) independent industry representatives that are mutually agreed upon by a
majority of the directors elected by (i) the holders of the Series D Preferred
Stock, (ii) the holders of the Series C Preferred Stock and (iii) the holders of
outstanding shares of Series A Preferred Stock, Series B Preferred Stock and
Common Stock (voting together as a single class and not as a separate series,
and, with respect to the Series A Preferred Stock and Series B Preferred Stock,
on an as-converted basis).
(b) Should the provisions of this Section 2.5 be construed
to constitute the granting of proxies, such proxies shall be deemed coupled with
an interest and are irrevocable for the term of this Agreement. It is agreed and
understood that monetary damages would not adequately compensate an injured
party for the breach of this Section 2.5 by any party, that this Section 2.5
shall be specifically enforceable, and that any breach or threatened breach of
this Section 2.5 shall be the proper subject of a temporary or permanent
injunction or restraining order. Further, each party hereto waives any claim or
defense that there is an adequate remedy at law for such breach or threatened
breach.
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(c) This Section 2.5 shall terminate in its entirety and
be of no further force or effect upon the earlier to occur of:
(i) the sale of securities pursuant to a registration
statement filed by the Company under the Act in connection with the firm
commitment underwritten offering of its securities to the general public is
consummated, the public offering price of which was not less than $6.50 per
share (adjusted to reflect subsequent stock dividends, stock splits or
recapitalizations), and $15,000,000 in aggregate proceeds to the Company;
(ii) the date upon which the Company first becomes
subject to the periodic reporting requirements of Sections 12(g) or 15(d) of the
1934 Act; or
(iii) May 15, 2008.
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2.6 Sales by Founder.
(a) For purposes of this Section 2.6; (i) "Stock" shall
mean shares of the Company's Common Stock and Preferred Stock now owned or
subsequently acquired by the Founder, (ii) "Preferred Stock" shall mean the
Company's outstanding Series A Preferred Stock, Series B Preferred Stock, Series
C Preferred Stock, Series D Preferred Stock and any other series of Preferred
Stock issued by the Company hereafter, and (iii) "Common Stock" shall mean (w)
the Company's Common Stock, (x) shares of Common Stock issuable or issued upon
conversion of the Company's outstanding Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and/or Series D Preferred Stock, (y)
shares of Common Stock issuable upon exercise of outstanding options or warrants
to the extent such options or warrants are then exercisable and/or the stock
issuable thereupon would not be subject to repurchase by the Company, and (z)
shares of Common Stock issuable upon conversion of any outstanding convertible
securities.
(b) If the Founder proposes to sell or transfer any shares
of Stock in one or more related transactions which will result in the cumulative
transfer of 10% or more of the Founder's total holdings of Stock, then Founder
shall promptly give written notice (the "Notice") to the Company and the
Investors at least twenty (20) days prior to the closing of such sale or
transfer. The Notice shall describe in reasonable detail the proposed sale or
transfer including, without limitation, the number of shares of Stock to be sold
or transferred, the nature of such sale or transfer, the consideration to be
paid, and the name and address of each prospective purchaser or transferee.
(c) Each Investor shall have the right, exercisable upon
written notice to Founder within fifteen (15) days after receipt of the Notice,
to participate in such sale of Stock on the same terms and conditions. To the
extent one or more of the Investors exercise such right of participation in
accordance with the terms and conditions set forth below, the number of shares
of Stock that Founder may sell in the transaction shall be correspondingly
reduced.
(d) Each Investor may sell all or any part of that number
of shares of Stock equal to the product obtained by multiplying (i) the
aggregate number of shares of Stock covered by the Notice by (ii) a fraction,
the numerator of which is the number of shares of Common Stock (including shares
of Common Stock issuable upon conversion of Preferred Stock) owned by the
Investor at the time of the sale or transfer and the denominator of which is the
total number of shares of Stock owned by Founder plus the number of shares of
Common Stock (including shares of Common Stock issuable upon conversion of
Preferred Stock) owned by all of the Investors at the time of the sale or
transfer.
(e) If any Investor fails to elect to fully participate in
Founder's sale pursuant to this Section 2.6, Founder shall promptly give notice
of such failure to the Investors who did so elect (the "Participants"). Such
notice may be made by telephone if confirmed in writing within two (2) days. The
Participants shall have five (5) days from the date such notice was given to
agree to sell their pro rata share of the unsold portion. For purposes of this
paragraph, a Participant's pro rata share shall be the ratio of (i) the number
of shares of Common
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Stock (including shares of Common Stock issuable upon conversion of Preferred
Stock) held by such Participant to (ii) the number of shares of Common Stock
(including shares of Common Stock issuable upon conversion of Preferred Stock)
held by all the Participants and Founder.
(f) Each Participant shall effect its participation in the
sale by promptly delivering to Founder for transfer to the prospective purchaser
one or more certificates, properly endorsed for transfer, which represent:
(i) the type and number of shares of Common Stock which
such Participant elects to sell; or
(ii) that number of shares of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and/or Series D
Preferred Stock which is at such time convertible into the number of shares of
Common Stock which such Participant elects to sell; provided, however, that if
the prospective purchaser objects to the delivery of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock and/or Series D Preferred
Stock in lieu of Common Stock, such Participant shall convert such Preferred
Stock into Common Stock and deliver Common Stock as provided above. The Company
agrees to make any such conversion concurrent with the actual transfer of such
shares to the purchaser.
(g) The stock certificate or certificates that the
Participant delivers to the Founder pursuant to paragraph 2.6(f) shall be
transferred to the prospective purchaser in consummation of the sale of the
Stock pursuant to the terms and conditions specified in the Notice, and the
Founder shall concurrently therewith remit to such Participant that portion of
the sale proceeds to which such Participant is entitled by reason of its
participation in such sale. To the extent that any prospective purchaser or
purchasers prohibits such assignment or otherwise refuses to purchase shares or
other securities from a Participant exercising its rights of co-sale hereunder,
the Founder shall not sell to such prospective purchaser or purchasers any Stock
unless and until, simultaneously with such sale, the Founder shall purchase such
shares or other securities from such Participant for the same consideration and
on the same terms and conditions as the proposed transfer described in the
Notice. The exercise or non-exercise of the rights of the Participants hereunder
to participate in one or more sales of Stock made by the Founder shall not
adversely affect their rights to participate in subsequent sales of Stock
subject to Section 2.6 (i).
(h) If none of the Investors elect to participate in the
sale of the Stock subject to the Notice, the Founder may, not later than sixty
(60) days following delivery to the Company and each of the Investors of the
Notice, conclude a transfer of not less than all of the Stock covered by the
Notice on terms and conditions not more favorable to the transferor than those
described in the Notice. Any proposed transfer on terms and conditions more
favorable than those described in the Notice, as well as any subsequent proposed
transfer of any of the Stock by the Founder, shall again be subject to the
co-sale rights of the Stockholders and shall require compliance by the Founder
with the procedures described in this Section 2.6.
(i) Notwithstanding the foregoing, the co-sale rights of
the Investors shall not apply to (i) any pledge of Stock made pursuant to a bona
fide loan transaction that creates a mere security interest, (ii) any transfer
to the ancestors, descendants or spouse or to
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trusts for the benefit of such persons or Founder; (iii) any bona fide gift;
provided that (w) Founder shall inform the Investors of such pledge, transfer or
gift prior to effecting it and (x) the pledgee, transferee or donee shall
furnish the Investors with a written agreement to be bound by and comply with
all provisions of this Section 2.6 of this Agreement. Such transferred Stock
shall remain "Stock" hereunder, and such pledgee, transferee or donee shall be
treated as a "Founder" for purposes of this Agreement, (iv) the sale of any
Stock to the public pursuant to a registration statement filed with, and
declared effective by, the SEC under the Act, or (v) the sale of any Stock to
the Company.
(j) In the event the Founder should sell any Stock in
contravention of the co-sale rights of the Investors under this Agreement (a
"Prohibited Transfer"), the Investors, in addition to such other remedies as may
be available at law, in equity or hereunder, shall have the put option provided
in (k) below, and the Founder shall be bound by the applicable provisions of
such option.
(k) In the event of a Prohibited Transfer, each Investor
shall have the right to sell to the Founder the type and number of shares of
Stock equal to the number of shares each Investor would have been entitled to
transfer to the purchaser under Section 2.6(d) hereof had the Prohibited
Transfer been effected pursuant to and in compliance with the terms hereof. Such
sale shall be made on the following terms and conditions:
(i) The price per share at which the shares are to be
sold to the Founder shall be equal to the price per share paid by the purchaser
to the Founder in the Prohibited Transfer. The Founder shall also reimburse each
Investor for any and all fees and expense, including legal fees and expenses,
incurred pursuant to the exercise or the attempted exercise of the Investor's
rights under Section 2.6.
(ii) Within ninety (90) days after the later of the
dates on which the Investor (w) received notice of the Prohibited Transfer or
(x) otherwise become aware of the Prohibited Transfer, each Investor shall, if
exercising the option created hereby, deliver to the Founder the certificate or
certificates representing shares to be sold, each certificate to be properly
endorsed for transfer.
(iii) The Founder shall, upon receipt of the
certificate or certificates for the shares to be sold by an Investor, pursuant
to this subparagraph, pay the aggregate purchase price therefor and the amount
of reimbursable fees and expenses, as specified in Section 2.6(k)(i) of this
Agreement, in cash or by other means acceptable to the Investor.
(iv) Notwithstanding the foregoing, any attempt by
Founder to transfer Stock in violation of Section 2.6 hereof shall be void and
the Company agrees it will not effect such a transfer nor will it treat any
alleged transferee as the holder of such shares without the written consent of a
majority in interest of the Investors.
2.7 Key-Man Insurance. The Company shall use its best
efforts to obtain from financially sound and reputable insurers term life
insurance on the life of A. Xxxxxxxxx Xxxxxxxxx in the amount of $1,000,000.
Such policy shall name the Company as loss
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payee and shall not be cancelable by the Company without prior approval of the
Board of Directors.
2.8 Observer Rights.
(a) As long as Vantage Point Venture Partners ("Vantage
Point") owns not less than seventy-five percent (75%) of the shares of the
Series C Preferred Stock it purchased pursuant to the Series C Preferred Stock
Purchase Agreement by and among the Company and the Investors listed on Schedule
A thereto, dated May 15, 1998 (the "Series C Agreement"), (or an equivalent
amount of Common Stock issued upon conversion thereof) and does not have a
representative on the Company's Board of Directors, the Company shall invite a
representative of Vantage Point to attend all meetings of its Board of Directors
in a nonvoting observer capacity and, in this respect, shall give such
representative copies of all notices, minutes, consents, and other materials
that it provides to its directors; provided, however, that such representative
shall agree to hold in confidence and trust and to act in a fiduciary manner
with respect to all information so provided; and, provided further, that the
Company reserves the right to withhold any information and to exclude such
representative from any meeting or portion thereof if access to such information
or attendance at such meeting could adversely affect the attorney-client
privilege between the Company and its counsel or would result in disclosure of
trade secrets to such representative or if such Investor or its representative
is a direct competitor of the Company.
(b) As long as CGI, LLC ("CGI") owns not less than
seventy-five percent (75%) of the shares of the Series D Preferred Stock it
purchased pursuant to the Series D Preferred Stock and Warrant Purchase
Agreement by and among the Company and the Investors listed on Schedule A
thereto of even date herewith (the "Series D Agreement"), (or an equivalent
amount of Common Stock issued upon conversion thereof) and does not have a
representative on the Company's Board of Directors, the Company shall invite a
representative of CGI to attend all meetings of its Board of Directors in a
nonvoting observer capacity and, in this respect, shall give such representative
copies of all notices, minutes, consents, and other materials that it provides
to its directors; provided, however, that such representative shall agree to
hold in confidence and trust and to act in a fiduciary manner with respect to
all information so provided; and, provided further, that the Company reserves
the right to withhold any information and to exclude such representative from
any meeting or portion thereof if access to such information or attendance at
such meeting could adversely affect the attorney-client privilege between the
Company and its counsel or would result in disclosure of trade secrets to such
representative or if such Investor or its representative is a direct competitor
of the Company.
2.9 Restrictions on Future Issuance of Stock. The Company
hereby covenants and agrees that it shall not issue any shares of Series D
Preferred Stock, other than shares of Series D Preferred Stock issued pursuant
to the Series D Agreement or pursuant to exercise of the Series D Warrants,
without the prior written consent of at least sixty-seven percent (67%) of the
voting power of the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock (voting together as a single class
and not as separate series, and on an as-converted basis).
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2.10 Termination of Certain Covenants. The covenants set
forth in Sections 2.5, 2.6, 2.7, 2.8 and 2.9 shall terminate and be of no
further force or effect upon the consummation of the sale of securities pursuant
to a registration statement filed by the Company under the Act in connection
with the firm commitment underwritten offering of its securities to the general
public.
3. Miscellaneous.
3.1 Successors and Assigns. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including transferees of any shares of Registrable Securities). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
3.2 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
3.3 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.4 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
3.5 Notices. Unless otherwise provided, any notice
required or permitted under this Agreement shall be given in writing and shall
be deemed effectively given upon personal delivery to the party to be notified
or upon deposit with the United States Post Office, by registered or certified
mail, postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other address
as such party may designate by ten (10) days' advance written notice to the
other parties.
3.6 Expenses. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
3.7 Amendments and Waivers. Any term of this Agreement may
be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
sixty-six and two-thirds percent (66 2/3%) of the Registrable Securities then
outstanding. Any amendment or waiver effected in accordance with this
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paragraph shall be binding upon each holder of any Registrable Securities then
outstanding, each future holder of all such Registrable Securities, and the
Company.
3.8 Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
3.9 Aggregation of Stock. All shares of Registrable
Securities held or acquired by affiliated entities or persons shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.
3.10 Entire Agreement. This Agreement (including the
Exhibits hereto, if any) constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.
3.11 Prior Agreement. The Prior Agreement is hereby
superseded in its entirety and shall be of no further force or effect.
3.12 Public Announcement. Neither the Company nor any
Investor (other than Intel Corporation) shall use Intel Corporation's or its
affiliates names or refer to Intel Corporation or its affiliates directly or
indirectly in connection with Intel Corporation's or its affiliates relationship
with the Company in any advertisement, news release, or professional or trade
publication, or in any other manner, unless otherwise required by law or with
Intel Corporation's prior written consent, which consent will generally not be
granted. The parties agree that there will be no press release or other public
statement issued by any party relating to this Agreement or the transactions
contemplated hereby unless required by law or mutually agreed to, and further
agree to keep the terms of this Agreement, the Series A Preferred Stock Purchase
Agreement dated July 2, 1996 (the "Series A Agreement"), the Series B Preferred
Stock Purchase Agreement dated June 12, 1997 (the "Series B Agreement"), the
Series C Agreement, and the Warrant issued to Intel Corporation (the "Intel
Warrant") in strictest confidence, it being understood that the restriction
shall not prohibit disclosure to the parties' counsel, accountants, and
professional advisors. If the Company determines that it is required by law or
under the rules and regulations of the SEC to disclose the terms and conditions
of the Agreement, the Series A Agreement, the Series B Agreement, the Series C
Agreement or the Intel Warrant, it shall, a reasonable time before making any
such disclosure or filing, consult with Intel Corporation regarding such
disclosure or filing and seek confidential treatment for such portions of those
agreements as may be reasonably requested by Intel Corporation.
Notwithstanding the above, the Company may disclose the existence
and terms and conditions of this Agreement, the Series A Agreement, the Series B
Agreement, the Series C Agreement and the Intel Warrant to bona fide potential
investors who are under obligations of nondisclosure, similar to those contained
herein and which the Company believes in good faith are seriously considering
investing in the Company.
21
24
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
COMPANY:
CYBERGOLD, INC.
By:
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A. Xxxxxxxxx Xxxxxxxxx
President
Address: 0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
25
FOUNDER:
-------------------------------------------------
A. Xxxxxxxxx Xxxxxxxxx
Address:
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Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
26
INVESTOR:
ALTA CALIFORNIA PARTNERS, L.P.
By: Alta California Management Partners, L.P.
By:
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General Partner
ALTA EMBARCADERO PARTNERS, LLC
By:
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Member
Address:
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Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
27
VANTAGEPOINT VENTURE PARTNERS 1996
By: VantagePoint Associates LLC
By:
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Xxxx Xxxxxxx
Managing Member
Address:
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---------------------------------------
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Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
28
ALAFI CAPITAL CORPORATION
By:
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Print Name:
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Title:
-------------------------------------------
Address:
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Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
29
-------------------------------------------------
Xxx Xxxxx
Address:
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---------------------------------------
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Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
30
X.X. XXXXXXXXX AND XXXXXXXX X. XXXXXXXXX, JTWROS
By:
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Print Name:
--------------------------------------
Title:
-------------------------------------------
Address:
---------------------------------------
---------------------------------------
---------------------------------------
Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
31
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A. Xxxxxxxxx Xxxxxxxxx
Address:
---------------------------------------
---------------------------------------
---------------------------------------
Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
32
-------------------------------------------------
Xxxxx XxXxxxx
Address:
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---------------------------------------
---------------------------------------
Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
33
XXXXXX FAMILY TRUST
By:
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Print Name:
--------------------------------------
Title:
-------------------------------------------
Address:
---------------------------------------
---------------------------------------
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Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
34
XXXXX X. XXXXX 1996 CHARITABLE REMAINDER UNITRUST
By:
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Print Name:
--------------------------------------
Title:
-------------------------------------------
Address:
---------------------------------------
---------------------------------------
---------------------------------------
Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
35
-------------------------------------------------
Xxxxx Xxxxxxxx
Address:
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---------------------------------------
---------------------------------------
Telephone:
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Facsimile:
---------------------------------------
SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
36
-------------------------------------------------
Xxxxxx X. Xxxxxxx
Address:
---------------------------------------
---------------------------------------
---------------------------------------
Telephone:
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Facsimile:
---------------------------------------
SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
37
-------------------------------------------------
Xxxxx Xxxxxx
Address:
---------------------------------------
---------------------------------------
---------------------------------------
Telephone:
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Facsimile:
---------------------------------------
SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
38
-------------------------------------------------
Xxxx Xxxxxxx
Address:
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---------------------------------------
---------------------------------------
Telephone:
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Facsimile:
---------------------------------------
SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
39
-------------------------------------------------
Xxxxxxxx X. Xxxx
Address:
---------------------------------------
---------------------------------------
---------------------------------------
Telephone:
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Facsimile:
---------------------------------------
SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
40
-------------------------------------------------
Xxxxx X. Xxxx
Address:
---------------------------------------
---------------------------------------
---------------------------------------
Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
41
-------------------------------------------------
Xxxxxx Link
Address:
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---------------------------------------
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Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
42
-------------------------------------------------
Xxxxxx Xxxxxxx
Address:
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---------------------------------------
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Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
43
XXXXXXXXX TRUSTS PARTNERSHIP
By:
----------------------------------------------
Print Name:
--------------------------------------
Print Title:
-------------------------------------
Address: 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
44
GC&H INVESTMENTS
By:
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Print Name:
--------------------------------------
Print Title:
-------------------------------------
Address:
---------------------------------------
---------------------------------------
---------------------------------------
Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
45
OSPREY VENTURES, L.P.
By:
----------------------------------------------
Print Name:
--------------------------------------
Print Title:
-------------------------------------
Address:
---------------------------------------
---------------------------------------
---------------------------------------
Telephone:
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Facsimile:
---------------------------------------
SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
46
CGI, LLC
By: CG Investors, LLC
Its Manager
By:
----------------------------------------------
Xxxxxxx X. Xxxxxxxxxx
Managing Member
Address:
---------------------------------------
---------------------------------------
---------------------------------------
Telephone:
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Facsimile:
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SIGNATURE PAGE TO CYBERGOLD, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
47
SCHEDULE A
SCHEDULE OF INVESTORS
Alafi Capital Company
Alta California Partners, L.P.
Alta Embarcadero Partners, LLC
CGI, LLC
Xxx Xxxxx
Defta Partners
X.X. Xxxxxxxxx and Xxxxxxxx X. Xxxxxxxxx, JTWROS
Xxxxxxx X. Xxxxxx
Xxx X. Xxxxxxx
GC&H Investments
A. Xxxxxxxxx Xxxxxxxxx
Xxxxxx Xxxx
Intel Corporation
Xxxxx X. Xxxx
Xxxxxx Family Trust
Xxxxxx Link
Xxxxxx Xxxxxxx
Xxxxx XxXxxxx
Xxxx X. Xxxxxx and Xxxxxxx Xxx Xxxxxx, JTWROS
Osprey Ventures, X.X.
Xxxxx X. Xxxxx 1996 Charitable Remainder Unitrust
Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx
Xxxxxx X. Xxxxxxx
Xxxxx Xxxxxx
Xxxxx X. Xxxxxxxxx
Xxxx Xxxxxxx
VantagePoint Venture Partners 1996
Xxxxxxxx X. Xxxx
Xxxx Xxxxxx CUST FBO Xxxxxxxx X. Xxxx XXX Rollover DTD 11/21/97
Xxxxxxxxx Trusts Partnership