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EXHIBIT 4.02
THE 3DO COMPANY
FOURTH SHAREHOLDERS' RIGHTS AGREEMENT
This Fourth Shareholders' Rights Agreement (the "Agreement") is made and
entered into as of ___________, 1994 by and among The 3DO Company, a California
corporation (formerly SMSG, Inc.) (the "Company"), Electronic Arts Inc., a
Delaware corporation ("EA"), Xxxxxxx Xxxxxxx Xxxxxxxx & Xxxxx V, a California
limited partnership ("KPCB"), KPCB Zaibatsu Fund I, a California limited
partnership ("Zaibatsu"), TW/Three D Holding Co., a New York general partnership
and successor to the rights and obligations of Time Warner Enterprises, Inc.,
Warner Communications, Inc., and Time Warner Entertainment Company, L.P.
("TWEC") under this Agreement and any prior shareholders' rights agreement
ultimately replaced by this Agreement (including its predecessors, "TW/Three
D"), Technology Partners West Fund IV, L.P. ("TP"), Matsushita Electric
Industrial Co., Ltd. ("MEI"), MCA, Inc. ("MCA"), AT&T and Creative Technology
Ltd. ("Creative"). EA, KPCB, Zaibatsu, TW/Three D, TP, MEI, MCA and AT&T are
collectively referred to herein as the "Existing Shareholders" and Creative is
referred to herein as a "New Shareholder." Each party individually is referred
to herein as a "Shareholder."
R E C I T A L S
A. Pursuant to a Series A Preferred Stock Purchase Agreement dated
September 30, 1991 (the "First Series A Purchase Agreement"), TWEC purchased
5,000,000 shares of the Company's Series A Preferred Stock ("Series A Stock")
from the Company, KPCB purchased 3,610,000 shares of Series A Stock from the
Company and acquired an option to purchase an additional 950,000 shares of
Series A Stock from EA, Zaibatsu purchased 190,000 shares of Series A Stock from
the Company and acquired an option to purchase an additional 50,000 shares of
Series A Stock from EA, and TP purchased 400,000 shares of Series A Stock from
the Company. Pursuant to a Series A Preferred Stock Purchase Agreement dated
April 9, 1992 (the "Second Series A Purchase Agreement"), MEI purchased
5,000,000 shares of Series A Stock from the Company. Subsequently, each of MCA
and TWEC exercised options to purchase 666,666 shares of Series A Stock from the
Company. Pursuant to a Series B Preferred Stock Purchase Agreement dated January
5, 1993 (the "Series B Purchase Agreement"), certain individuals and certain of
the Shareholders named on Exhibit A to the Series B Purchase Agreement are
purchasing an aggregate of 2,666,673 shares of Series B Preferred Stock ("Series
B Stock") from the Company. The shares of Common Stock of the Company into which
the Series A Stock and Series B Stock are convertible are referred to herein as
"Conversion Stock."
B. As of September 14, 1993, TWEC assigned to TW/Three D all shares of the
Company's common stock owned by it as of such date and all rights and
obligations relating to such stock. Contemporaneously with such assignments,
TW/Three D accepted such stock and assumed all rights and obligations relating
thereto.
C. Pursuant to a stock purchase agreement between the Company and MEI
dated effective September 1994 (the "MEI Agreement"), the Company has agreed to
issue to MEI two
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shares of the Company Common Stock for each hardware system shipped by MEI, at
or below certain suggested retail prices as defined in the MEI Agreement, from
February 1, 1994 through September 30, 1994. Pursuant to a letter agreement
dated May 10, 1994 between the Company and Creative (as supplemented by a letter
agreement dated May 27, 1994 between the Company and Creative) (collectively,
the "Creative Letter"), the Company has agreed to issue to Creative two shares
of the Company's Common Stock for each Qualifying PC Card (as defined in the
Creative Letter) sold and shipped by Creative (or its subsidiaries) and received
by a retail account, at or below certain suggested retail prices as defined in
the Creative Letter, through December 31, 1994. The shares of Common Stock of
the Company issuable pursuant to the MEI Agreement and the Creative Letter are
referred to herein as "Incentive Stock."
D. In connection with the First Series A Purchase Agreement, the Company,
EA, KPCB, Zaibatsu, TW/Three D and TP entered into a Shareholders' Rights
Agreement dated as of September 30, 1991 ("First Shareholders' Rights
Agreement"). The First Shareholders' Rights Agreement was terminated and
replaced by a second Shareholders' Rights Agreement dated April 9, 1992 ("Second
Shareholders' Rights Agreement"). The Second Shareholders' Rights Agreement was
terminated and replaced by a Third Shareholders' Rights Agreement dated January
13, 1993 (the "Third Shareholders' Rights Agreement"), which is, in turn, being
terminated and replaced by this Agreement.
E. The share numbers and dollar amounts in this Agreement (including in
these Recitals) have been adjusted to reflect the two-for-one stock split of the
Company's outstanding capital that occurred in October 1992 and the one-for-two
reverse stock split that occurred in March 1993.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. INFORMATION RIGHTS.
1.1 Information to Board Members. The Company agrees that the
Company will:
(a) Annual Budget. Furnish to each member of the Company's
Board of Directors as soon as practicable, and in any event no later than thirty
(30) days after the close of each fiscal year of the Company, an annual
operating plan and budget, prepared on a monthly basis, for the next immediate
fiscal year. The Company will also furnish to each member of the Company's Board
of Directors, within a reasonable time of its preparation, amendments to the
annual budget, if any; and
(b) Monthly Reports. Furnish to each member of the Company's
Board of Directors as soon as practicable, and in any case within thirty (30)
days after the end of each calendar month, monthly unaudited financial
statements, including an unaudited Balance Sheet an unaudited Statement of
Income and an unaudited Statement of Cash Flows, together with a comparison to
the Company's operating plan and budget.
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(c) Additional Information. Furnish to any member of the
Company's Board of Directors any additional documents or information regarding
the Company and its business requested by such Board member that is reasonably
required to enable such Board member to fulfill his or her duties as a Board
member.
1.2 144A Information. The Company agrees to provide each Existing
Shareholder who holds at least 400,000 shares of Series A Stock and/or Series B
Stock and/or the equivalent number (on an as-converted basis) of shares of
Conversion Stock upon request, with such written information as may be required
in order to permit such Shareholder to resell any shares of the Company's stock
pursuant to Rule 144A promulgated under the Securities Act, if applicable.
1.3 Determination of Shares. For purposes of this Section 1, the
requisite number of shares of Series A Stock and/or Series B Stock and/or
Conversion Stock required to be held by a Shareholder to qualify for any
particular rights set forth in this Section shall be adjusted proportionally to
reflect any subdivisions, combinations or stock dividends affecting the
outstanding number of shares of such stock after the date of this Agreement.
1.4 Assignment of Information Rights. Rights of any Shareholder
under any Section of this Section 1 may be assigned only to a party who acquires
from a Shareholder (or any permitted successor or assignee of a Shareholder) at
least that number of shares of Series A Stock and/or Series B Stock and/or
Conversion Stock that a Shareholder is required to hold under the terms of such
Section in order to be entitled to such rights.
1.5 Termination of Information Rights. The information rights
granted pursuant to this Section 1 will terminate at the earlier of ten years
after the Company's Initial Public Regis tration or at such time after two years
after the Company's Initial Public Registration as all Registrable Securities
held by a Holder can be resold freely without registration under Rule 144(k).
2. REGISTRATION RIGHTS.
2.1 Definitions. For purposes of this Section 2:
(a) Registration. The terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement.
(b) Registrable Securities. The term "Registrable Securities"
means: (1) all the shares of Common Stock of the Company issued or issuable upon
the conversion of any shares of Series A Stock or Series B Stock that are now
owned or may hereafter be acquired by any Shareholder or any other party who
purchases Series A Stock or Series B Stock from the Company and subsequently
becomes a party and signatory to this Agreement as a "Shareholder" hereunder;
(2) any shares of Common Stock of the Company issued as Incentive Stock; and (3)
any shares of
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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,
all such shares of Common Stock described in clause (1) of this subsection (b);
excluding in all cases, however, any Registrable Securities sold by a person in
a transaction in which rights under this Section 2 are not assigned in
accordance with this Agreement or any Registrable Securities sold to the public
or sold pursuant to Rule 144 promulgated under the Securities Act.
(c) Registrable Securities Then Outstanding. The number of
shares of "Registrable Securities then outstanding" shall mean the number of
shares of Common Stock which are Registrable Securities and (1) are then issued
and outstanding or (2) are then issuable pursuant to the exercise or conversion
of then outstanding and then exercisable options, warrants or convertible
securities.
(d) Holder. For purposes of this Section 2, the term "Holder"
means any person owning of record Registrable Securities (aggregating as a
single Holder Registrable Securities held by any TW/Three D Affiliate, and
aggregating as a single Holder Registrable Securities held by any MEI Affiliate,
and aggregating as a single Holder Registrable Securities held by any AT&T
Affiliate, as defined in Section 4.1(d) of the Third Shareholders' Rights
Agreement) that have not been sold to the public or pursuant to Rule 144
promulgated under the Securities Act or any assignee of record of such
Registrable Securities to whom rights under this Section 2 have been duly
assigned in accordance with this Agreement; provided, however, that for purposes
of this Agreement, a record holder of shares of Series A Stock or Series B Stock
convertible into such Registrable Securities shall be deemed to be the Holder of
such Registrable Securities; and provided, further, that the Company shall in no
event be obligated to register shares of Series A Stock or Series B Stock, and
that Holders of Registrable Securities will not be required to convert their
shares of Series A Stock or Series B Stock into Common Stock in order to
exercise the registration rights granted hereunder until immediately before the
closing of the offering to which the registration relates.
(e) Form S-3. The term "Form S-3" means such form under the
Securities Act as is in effect on the date hereof or any successor registration
form under the Securities Act subsequently adopted by the SEC which permits
inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
(f) SEC. The term "SEC" or "Commission" means the U.S.
Securities and Exchange Commission.
2.2 Demand Registration.
(a) Request for Registration. Subject to terms and conditions
of this Section 2, if the Company shall receive:
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(i) Holders Request. At any time after September
30, 1994, a written request from the Holders of at least twenty-five
percent (25%) of the Registrable Securities then outstanding that the
Company file a registration statement under the Securities Act covering
the registration of Registrable Securities (which request shall expressly
state that it is being made pursuant to this Section 2.2(a)(i)); or
(ii) TW/Three D Request. A written request from
TW/Three D that the Company file a registration statement under the
Securities Act covering the registration of Registrable Securities (which
request by TW/Three D shall expressly state that it is being made pursuant
to this Section 2.2(a)(ii));
(iii) MEI Request. A written request from MEI that
the Company file a registration statement under the Securities Act
covering the registration of Registrable Securities (which request by MEI
shall expressly state that it is being made pursuant to this Section
2.2(a)(iii));
(iv) AT&T Request. A written request from AT&T
that the Company file a registration statement under the Securities Act
covering the registration of Registrable Securities (which request by AT&T
shall expressly state that it is being made pursuant to this Section
2.2(a)(iv));
then the Company shall, within ten (10) business days of the receipt of such
written request, give written notice of such request (a "Request Notice") to all
Holders, and effect, as soon as practicable, the registration under the
Securities Act of all Registrable Securities which Holders request to be
registered and included in such registration by written notice given by such
Holders to the Company within twenty (20) days after the Company has mailed the
Request Notice to the Holders, subject only to the limitations of this Section
2.2; provided, however, that the Registrable Securities requested by all Holders
to be registered pursuant to such request must have an anticipated aggregate
public offering price (before any underwriting discounts and commissions) of not
less than $3,000,000 (or $7,500,000 if such requested registration is under
Section 2.2(a)(i) and is the first public offering of the Company's stock
registered under the Securities Act); and provided further that MEI shall not in
any event exercise its rights under Sections 2.2(a)(i) or 2.2(a)(iii) hereof
with respect to more than 2,570,547 shares before April 2, 1996 and that
Creative shall not in any event exercise its rights under Section 2.2(a)(i)
hereof before April 1, 1997.
(b) Underwriting. If the Holder or Holders initiating a
registration request under this Section 2.2 ("Initiating Holder" or "Initiating
Holders", as applicable) intend to distribute the Registrable Securities covered
by their request by means of an underwriting, then the Initiating Holder or
Initiating Holders shall so advise the Company as a part of its or their request
for registration made pursuant to this Section 2.2 and the Company shall include
such information in the Request Notice. 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
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inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by the Initiating Holder or a majority in interest of
the Initiating Holders, as applicable, and such Holder) to the extent provided
herein. All Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with
the managing underwriter or underwriters selected for such underwriting by the
Company and the Initiating Holder or a majority in interest of the Initiating
Holders, as applicable. Notwithstanding any other provision of this Section 2.2,
if the underwriters advise the Company in writing that marketing factors require
a limitation of the number of securities to be underwritten then the Company
shall so advise all Holders of Registrable Securities which would otherwise be
registered and underwritten pursuant hereto, and the number of Registrable
Securities that may be included in the underwriting shall be reduced as required
by the underwriter(s) and allocated among the Holders of Registrable Securities
on a pro rata basis according to the number of Registrable Securities then
outstanding held by each Holder requesting registration (including the
Initiating Holder or Initiating Holders); provided, however, that the number of
shares of Registrable Securities to be included in such underwriting and
registration shall not be reduced unless all other securities of the Company are
first entirely excluded from the underwriting and registration; and provided,
further, that (i) if TW/Three D has requested to include Registrable Securities
in such underwriting and registration pursuant to Section 2.2(a)(ii) and if the
number of TW/Three D's Registrable Securities to be included is reduced pursuant
to this sentence, then such request by TW/Three D shall not be deemed to be a
request for registration pursuant to Section 2.2(a)(ii) for purposes of Section
2.2(c), below; (ii) if MEI has requested to include Registrable Securities in
such underwriting and registration pursuant to Section 2.2(a)(iii) and if the
number of MEI's Registrable Securities to be included is reduced pursuant to
this sentence, then such request by MEI shall not be deemed to be a request for
registration pursuant to Section 2.2(a)(iii) for purposes of Section 2.2(c),
below; and (iii) if AT&T has requested to include Registrable Securities in such
underwriting and registration pursuant to Section 2.2(a)(iv) and if the number
of AT&T's Registrable Securities to be included is reduced pursuant to this
sentence, then such request by AT&T shall not be deemed to be a request for
registration pursuant to Section 2.2(a)(iv) for purposes of Section 2.2(c),
below. Any Registrable Securities excluded and withdrawn from such underwriting
shall be withdrawn from the registration.
(c) Maximum Number of Demand Registrations. The Company is
obligated to effect only one (1) registration pursuant to Section 2.2(a)(i),
only one (1) registration pursuant to Section 2.2(a)(ii), only one (1)
registration pursuant to Section 2.2(a)(iii) and only one (1) registration
pursuant to Section 2.2(a)(iv).
(d) Deferral. Notwithstanding the foregoing, if the Company
shall furnish to Holders requesting the filing of a registration statement
pursuant to this Section 2.2, a certificate signed by the President or Chief
Executive Officer 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, then
the Company shall have the right to defer such filing for a period of not more
than 120 days after receipt of the request of the Initiating Holders;
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provided, however, that the Company may not utilize this right more than once in
any twelve (12) month period.
(e) Expenses.
(i) Holder Requested Registration. All expenses
incurred in connection with a registration requested pursuant to Section
2.2(a)(i), including without limitation all registration and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for the
Company, and the reasonable fees and disbursements of one counsel (not to exceed
$25,000) for the selling Holders (but excluding underwriters' discounts and
commissions), shall be borne by the Company. Each Holder participating in a
registration pursuant to Section 2.2(a)(i) shall bear such Holder's
proportionate share (based on the total number of shares sold in such
registration other than for the account of the Company) of all discounts,
commissions or other amounts payable to underwriters or brokers in connection
with such offering. Notwithstanding the foregoing, the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to Section 2.2(a)(i) if the registration request is subsequently withdrawn at
the request of the Holders of a majority of the Registrable Securities to be
registered, unless the Holders of a majority of the Registrable Securities then
outstanding agree to forfeit their right to a demand registration pursuant to
Section 2.2(a)(i), in which case such right shall be forfeited by all Holders of
Registrable Securities); provided, further, 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 not known to the Holders at the
time of their request for such registration and have withdrawn their request for
registration with reasonable promptness after learning of such material adverse
change, then the Holders shall not be required to pay any of such expenses and
shall retain their rights pursuant to Section 2.2(a)(i).
(ii) TW/Three D, MEI or AT&T Requested
Registration. All expenses incurred in connection with a registration requested
by TW/Three D pursuant to Section 2.2(a)(ii), or a registration requested by MEI
pursuant to Section 2.2(a)(iii), or a registration requested by AT&T pursuant to
Section 2.2(a)(iv), including without limitation all registration and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company, the fees and disbursements of any counsel engaged to
represent the selling Holders in such registration and all underwriters'
discounts and commissions, shall be borne exclusively by the selling Holders on
a pro rata basis in proportion to the number of Registrable Securities owned by
each such selling Holder that are included in such registration at the time it
goes effective.
2.3 Piggyback Registrations. The Company shall notify all Holders of
Registrable Securities in writing at least thirty (30) days prior to filing any
registration statement under the Securities Act for purposes of effecting a
public offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding any registration statement relating to any registration
under Section 2.2 or 2.4 of this Agreement or to any employee benefit plan or a
corporate reorganization) and will
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afford each such Holder an opportunity to include in such registration statement
all or any part of the Registrable Securities then held by such Holder. Each
Holder desiring to include in any such registration statement all or any part of
the Registrable Securities held by such Holder shall, within twenty (20) days
after receipt of the above-described notice from the Company, so notify the
Company in writing, and in such notice shall inform the Company of the number of
Registrable Securities such Holder wishes to include in such registration
statement; provided, however, that MEI shall not in any event exercise its
rights under Section 2.3 hereof with respect to more than 2,570,547 shares
before April 2, 1996 and that Creative shall not in any event exercise its
rights under Section 2.3 hereof before April 1, 1997. If a Holder decides not to
include all of its Registrable Securities in any registration statement
thereafter filed by the Company, such Holder shall nevertheless continue to have
the right to include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the Company with respect
to offerings of its securities, all upon the terms and conditions set forth
herein.
(a) Underwriting. If a registration statement under which the
Company gives notice under this Section 2.3 is for an underwritten offering,
then the Company shall so advise the Holders of Registrable Securities. In such
event, the right of any such Holder's Registrable Securities to be included in a
registration pursuant to this Section 2.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their Registrable Securities through such
underwriting shall enter into an underwriting agreement in customary form with
the managing underwriter or underwriter(s) selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the managing
underwriter determine(s) in good faith that marketing factors require a
limitation of the number of shares to be underwritten, then the managing
underwriter(s) may exclude shares (including Registrable Securities) from the
registration and the underwriting, and the number of shares that may be included
in the registration and the underwriting shall be allocated, first, to the
Company, and second, to each of the Holders requesting inclusion of their
Registrable Securities in such registration statement on a pro rata basis based
on the total number of Registrable Securities then held by each such Holder;
provided, however, that the right of the underwriters to exclude shares
(including Registrable Securities) from the registration and underwriting as
described above shall be restricted so that the number of Registrable Securities
included in any such registration is not reduced below twenty-five percent (25%)
of the shares included in the registration. If any Holder disapproves of the
terms of any such underwriting, such Holder may elect to withdraw therefrom by
written notice to the Company and the underwriter, delivered at least ten (10)
business days prior to the effective date of the registration statement. Any
Registrable Securities excluded or withdrawn from such underwriting shall be
excluded and withdrawn from the registration. For any Holder which 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 "Holder," and any pro rata reduction with respect to such
"Holder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"Holder," as defined in this sentence.
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(b) Expenses. All expenses incurred in connection with a
registration pursuant to this Section 2.3 (excluding underwriters' and brokers'
discounts and commissions), including, without limitation all federal and "blue
sky" registration and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company and reasonable fees and
disbursements of one counsel for the selling Holders (not to exceed $25,000)
shall be borne by the Company.
2.4 Form S-3 Registration. In case the Company shall receive from
any Holder or Holders of at least twenty percent (20%) of all Registrable
Securities then outstanding 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 (provided, however, that MEI shall not in any event exercise its
rights under this Section 2.4 with respect to more than 2,570,547 shares before
April 2, 1996 and that Creative shall not in any event exercise its rights under
this Section 2.4 before April 1, 1997), then the Company will:
(a) Notice. Promptly give written notice of the proposed
registration and the Holder's or Holders' request therefor, and any related
qualification or compliance, to all other Holders of Registrable Securities; and
(b) Registration. 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 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 twenty (20) days after receipt of such written
notice from the Company; provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance pursuant
to this Section 2.4:
(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 of less than
$500,000;
(iii) if the Company shall furnish to the Holders
a certificate signed by the President or Chief Executive Officer 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 no more than once during any twelve (12)
month period for a period of
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not more than ninety (90) days after receipt of the request of the Holder
or Holders under this Section 2.4;
(iv) 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.
Subject to the foregoing, the Company shall file a Form S-3 registration
statement covering the Registrable Securities and other securities so requested
to be registered pursuant to this Section 2.4 as soon as practicable after
receipt of the request or requests of the Holders for such registration.
(c) Expenses. All expenses incurred in connection with any
registration requested pursuant to this Section 2.4 shall be borne by the
Holders on a pro rata basis in proportion to the number of Registrable
Securities owned by the Holders that are included in such registration at the
time it goes effective.
(d) Not Demand Registration. Form S-3 registrations shall not
be deemed to be demand registrations as described in Section 2.2 above.
2.5 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities under this Agreement, 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 up to 120 days.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them that are included in such registration.
(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
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connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify 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 Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(g) Furnish, at the request of any Holder requesting
registration of Registrable Securities, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities are
being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated as of such date, of
the counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten
public offering addressed to the underwriters, if any, and if there are no
underwriters, to the Holders requesting registration of Registrable Securities
and (ii) a "comfort" letter dated as of such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering addressed to the underwriters, if any, and if
there are no underwriters, to the Holders requesting registration of Registrable
Securities.
2.6 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 2.2, 2.3 or
2.4 that the selling Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them, and the intended
method of disposition of such securities as shall be required to timely effect
the registration of their Registrable Securities.
2.7 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 2.
2.8 Indemnification. In the event any Registrable Securities are
included in a registration statement under Section 2.2, 2.3 or 2.4:
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(a) By the Company. To the extent permitted by law, the
Company will indemnify and hold harmless each Holder, the partners, officers and
directors of each Holder, any underwriter (as defined in the Securities Act) for
such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Exchange Act against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages, 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 Securities Act, the Exchange Act, any federal or state
securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any federal or state securities law in connection
with the offering covered by such registration statement;
and the Company will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in con nection with investigating or defending
any such loss, claim, damage, liability or action; provided however, that the
indemnity agreement contained in this Section 2.8(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, underwriter
or controlling person of such Holder.
(b) By Selling Holders. 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 have signed the registration statement, each
person, if any, who controls the Company within the meaning of the Securities
Act, any underwriter and any other Holder selling securities under such
registration statement or any of such other Holder's partners, directors or
officers or any person who controls such Holder within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages or
liabilities (joint or several) to which the Company or any such director,
officer, controlling person, underwriter or other such Holder, partner or
director, officer or controlling person of such other Holder may become subject
under the Securities Act, the Exchange
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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 reimburse any legal or other expenses reasonably
incurred by the Company or any such director, officer, controlling person,
underwriter or other Holder, partner, officer, director or controlling person of
such other Holder in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 2.8(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; and provided further, that the total amounts
payable in indemnity by a Holder under this Section 2.8(b) in respect of any
Violation shall not exceed the net proceeds received by such Holder in the
registered offering out of which such Violation arises.
(c) Notice. Promptly after receipt by an indemnified party
under this Section 2.8 of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 2.8,
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 shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential conflict of 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
commence ment 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 2.8, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 2.8.
(d) Defect Eliminated in Final Prospectus. The foregoing
indemnity agreements of the Company and Holders are subject to the condition
that, insofar as they relate to any Violation made in a preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the SEC at the
time the registration statement in question becomes effective or the amended
prospectus filed with the SEC pursuant to SEC Rule 424(b) (the "Final
Prospectus"), such indemnity agreement shall not inure to the benefit of any
person if a copy of the Final Prospectus was furnished to the indemnified party
and was not furnished to the person asserting the loss, liability, claim or
damage at or prior to the time such action is required by the Securities Act.
(e) Contribution. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
either (i) any Holder exercising rights
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under this Agreement, or any controlling person of any such Holder, makes a
claim for indemnification pursuant to this Section 2.8 but it is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 2.8 provides for indemnification in
such case, or (ii) contribution under the Securities Act may be required on the
part of any such selling Holder or any such controlling person in circumstances
for which indemnification is provided under this Section 2.8; then, and in each
such case, the Company and such Holder will contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after contribution
from others) in such proportion so that such Holder is responsible for the
portion represented by the percentage that the public offering price of its
Registrable Securities offered by and sold under the registration statement
bears to the public offering price of all securities offered by and sold under
such registration statement, and the Company and other selling Holders are
responsible for the remaining portion; provided, however, that, in any such
case, (A) no such Holder will be required to contribute any amount in excess of
the public offering price of all such Registrable Securities offered and sold by
such Holder pursuant to such registration statement; and (B) no person or entity
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) will be entitled to contribution from any person or entity
who was not guilty of such fraudulent misrepresentation.
(f) Survival. The obligations of the Company and Holders under
this Section 2.8 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.
2.9 Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Registrable Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company, the
Company agrees to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date of the first registration under the Securities Act
filed by the Company for an offering of its securities to the general public;
(b) Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); and
(c) So long as a Holder owns any Registrable Securities, to
furnish to the Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of Rule 144 (at any time
after 90 days after the effective date of the first registration statement filed
by the Company for an offering of its securities to the general public),
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and of the Securities Act and the Exchange Act (at any time after it has become
subject to the reporting requirements of the Exchange Act), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company as a Holder may reasonably request in availing itself
of any rule or regulation of the Commission allowing a Holder to sell any such
securities without registration (at any time after the Company has become
subject to the reporting requirements of the Exchange Act).
2.10 Limitations on Subsequent Registration Rights. From and after
the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the Registrable Securities then
outstanding, enter into any agreement with any holder or prospective holder of
any securities of the Company which would allow such holder or prospective
holder (a) to include such securities in any registration filed under Section
2.2 hereof, unless under the terms of such agreement, such holder or prospective
holder may include such securities in any such registration only to the extent
that the inclusion of his securities will not reduce the amount of the
Registrable Securities of the Holders which is included, or (b) to make a demand
registration which could result in such registration statement being declared
effective prior to the earlier of either of the dates set forth in Section
2.2(a)(i), (ii), (iii) or (iv), or within one hundred twenty (120) days of the
effective date of any registration effected pursuant to Section 2.2.
2.11 Assignment of Registration Rights. The rights of a Shareholder
under this Section 2 (other than TW/Three D's rights to initiate a demand
registration under Section 2.2(a)(ii), MEI's rights to initiate a demand
registration under Section 2.2(a)(iii) and AT&T's rights to initiate a demand
registration under Section 2.2(a)(iv)) may be assigned to any party who acquires
Registrable Securities or shares of Series A Stock or Series B Stock convertible
into Registrable Securities in a transfer not involving a distribution or
offering of such shares to the public and not made pursuant to Rule 144
promulgated under the Securities Act, who agrees in writing with the Company to
be bound by all of the provisions of this Section 2. TW/Three D's right to
initiate a demand registration under Section 2.2(a)(ii) may be assigned to any
party who acquires at least 80% of the Series A Stock originally acquired by
TW/Three D under the First Series A Purchase Agreement (or the Conversion Stock
with respect thereto) and who agrees in writing with the Company to be bound by
all of the provisions of this Section 2. MEI's right to initiate a demand
registration under Sec tion 2.2(a)(iii) may be assigned to any party who
acquires at least 80% of the Series A Stock originally acquired by MEI under the
Second Series A Purchase Agreement (or the Conversion Stock with respect
thereto) and who agrees in writing with the Company to be bound by all of the
provisions of this Section 2. AT&T's right to initiate a demand registration
under Section 2.2(a)(iv) may be assigned to any party who acquires at least 80%
of the Series B Stock originally acquired by AT&T under the Series B Purchase
Agreement (or the Conversion Stock with respect thereto) and who agrees in
writing with the Company to be bound by all of the provisions of this Section 2.
2.12 Termination of Registration Rights. The registration rights
granted pursuant to this Section 2 will terminate at the earlier of ten years
after the Company's Initial Public Regis-
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tration or at such time after two years after the Company's Initial Public
Registration as all Registrable Securities held by a Holder can be resold freely
without registration under Rule 144(k).
3. VOTING AGREEMENTS.
3.1 Election of Board of Directors.
(a) Voting; Board Designees. The Shareholders further agree to
vote all shares of the capital stock of the Company now or hereafter directly or
indirectly owned (of record or beneficially) by them or their affiliates, and to
nominate candidates for election to the Company's Board of Directors, as shall
be necessary to elect and appoint to the Board of Directors of the Company, and
to maintain as members of the Company's Board of Directors, the following
persons:
(i) one (1) individual designated by EA (the "EA
Designee"), so long (and only so long) as EA owns the Required Number of
Shares (as defined below);
(ii) one (1) individual designated by KPCB (the
"KPCB Designee"), so long (and only so long) as KPCB together with
Zaibatsu owns the Required Number of Shares;
(iii) one (1) individual designated by TW/Three D
(the "TW/Three D Designee"), so long (and only so long) as TW/Three D
together with all TW/Three D Affiliates owns the Required Number of
Shares;
(iv) one (1) independent individual nominated for
election to the Company's Board of Directors by KPCB who is not an officer
or employee of the Company or affiliated with KPCB or TW/Three D and whose
nomination is approved by a majority of the Company's Board of Directors
excluding the KPCB representative (the "KPCB Nominee"), so long (and only
so long) as KPCB owns the Required Number of Shares;
(v) one (1) independent individual nominated for
election to the Company's Board of Directors by TW/Three D who is not an
officer or employee of the Company or affiliated with KPCB or TW/Three D
and whose nomination is approved by a majority of the Company's Board of
Directors excluding the TW/Three D representative (the "TW/Three D
Nominee"), so long (and only so long) as TW/Three D owns the Required
Number of Shares;
(vi) the then-incumbent Chief Executive Officer of
the Company;
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(vii) one (1) individual designated by MEI (the
"MEI Designee"), so long (and only so long) as MEI together with all MEI
Affiliates owns the Required Number of Shares; provided that such
individual is either a senior operating executive employed by MEI's
consumer electronics group or is approved as a nominee by a majority of
the Company's Board of Directors excluding the MEI representative;
(viii) one (1) independent individual nominated
for election to the Company's Board of Directors by MEI who is not an
officer or employee of the Company or affiliated with MEI and whose
nomination is approved by a majority of the Company's Board of Directors
excluding the MEI representative (the "MEI Nominee"), so long (and only so
long) as MEI owns the Required Number of Shares; and
(ix) one (1) individual designated by AT&T (the
"AT&T Designee"), so long (and only so long) as AT&T together with all
AT&T Affiliates owns the Required Number of Shares.
As to any remaining members of the Company's Board of Directors, the
Shareholders may vote their shares as they deem appropriate. The provisions of
this Section 3 will be binding on all Share holders and their transferees
regardless of whether any of them continue to hold the Required Number of
Shares.
(b) Required Number of Shares. As used herein, the term
"Required Number of Shares" with respect to EA, KPCB, TW/Three D and MEI means
3,000,000 shares of Series A Stock and/or Series B Stock, and with respect to
AT&T means 2,000,000 shares of Series B Stock, and/or in each case the
equivalent number (on an as-converted basis) of shares of Conversion Stock (such
numbers of shares of Series A Stock, Series B Stock and Common Stock being
subject to proportional adjustment to reflect subsequent subdivisions,
combinations, stock dividends and similar events affecting the number of
outstanding shares of such stock after the date of this Agreement).
(c) Changes in Board Seats. If from time to time any party
authorized to designate or nominate an individual to serve on the Company's
Board of Directors under clauses (i) through (v), (vii) and (viii) of Section
3.1(a) (an "Electing Party"), elects to:
(i) remove from the Company's Board of Directors
an individual who was designated or nominated for election to the Board by
such Electing Party under Section 3.1; and/or
(ii) designate a different individual to occupy
that Board seat, or to fill a vacancy in such Board seat;
then the Shareholders shall vote all shares of the capital stock of the Company
then directly or indirectly owned (of record or beneficially) by them or their
affiliates to cause the individual designated by such Electing Party to be
removed from, or elected to, the Company's Board of Directors, as the case may
be.
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(d) Notice; Cumulative Voting. The Company shall promptly give
each Shareholder written notice of any election to, or appointment of, or change
in composition of, the Board of Directors of the Company. In any election of
directors, the Shareholders shall utilize cumulative voting, if necessary, to
carry out their voting obligations under this Section 3.
3.2 Further Assurances. Each of the Shareholders and the Company
agree not to vote any shares of Company stock, or to take any other actions, in
any manner that would defeat, impair or adversely effect the stated goals and
intentions of the parties under this Section.
3.3 Effect of Transfer of Shares; Legend.
(a) Restrictions Against Assignment. No party may assign,
delegate or otherwise transfer to any person or entity (including but not
limited to any transferee of shares of the Company's stock) any rights of such
party to designate or nominate any individual for election to the Company's
Board of Directors under this Section 3, except that TW/Three D may transfer
such rights to any TW/Three D Affiliate, MEI may transfer such rights to any MEI
Affiliate and AT&T may transfer such rights to any AT&T Affiliate.
(b) Transferees. Each and every transferee or assignee of
shares of capital stock of the Company from any Shareholder shall be bound by
and subject to all the terms and conditions of this Section 3 (except that no
such transferee or assignee, other than a TW/Three D Affiliate, MEI Affiliate or
AT&T Affiliate pursuant to Section 3.3(a), shall acquire or succeed to any right
to designate or nominate any individual for election to the Company's Board of
Directors). So long as the provisions of this Section 3 are in effect, the
Company shall require, as a condition precedent to the transfer of any shares of
Company stock covered by this Section 3, that the transferee agrees in writing
to be bound by, and subject to, the terms and conditions of this Section 3 as
provided in this Section 3.3(b) and to ensure that his transferees of Company
stock shall be likewise bound.
(c) Legend. The Company and the Shareholders agree that, so
long as the provisions of this Section 3 are in effect, all Company share
certificates now or hereafter held by each Shareholder will be stamped or
otherwise imprinted with a legend in substantially the following form:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO AGREEMENTS,
COVENANTS AND RESTRICTIONS IN REGARD TO THE VOTING OF SUCH SHARES
AND THEIR TRANSFER, AS PROVIDED IN THE PROVISIONS OF A SHAREHOLDERS'
RIGHTS AGREEMENT, A COPY OF WHICH IS ON FILE IN THE OFFICE OF THE
SECRETARY OF THE CORPORATION.
3.4 Specific Performance. Each of the parties acknowledge that all
other parties hereto will be irreparably damaged in the event that the
provisions of this Section are not specifically enforced. Accordingly, should
any dispute arise pursuant this Agreement, the parties agree that a
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decree of specific performance shall be an appropriate remedy. Such remedy shall
be cumulative and shall be in addition to any other remedies which any party may
have at law or in equity.
3.5 Termination of Voting Agreements. The rights and obligations of
the parties granted pursuant to this Section 3 will terminate at the earlier of
eighteen months after the Company's Initial Public Registration or on the
termination of the Lock-Up Agreements between the Existing Shareholders and the
Underwriters of the Company's Initial Public Registration.
4. SHAREHOLDER CONFIDENTIALITY. Each Shareholder hereby agrees to
safeguard against disclosure to third parties and not to use except as
specifically authorized herein (or by agreements executed pursuant hereto) all
confidential information concerning the business of the Company that may be
disclosed to such Shareholder by reason of such Shareholder's access to the
books, records, properties or personnel of the Company before or after the date
hereof (collectively, "Company Confidential Information") by using reasonable
secrecy measures and in no event less than the same degree of care as such
Shareholder uses for such Shareholder's own similar proprietary information.
However, a Shareholder shall not be obligated to maintain any such Company
Confidential Information in confidence to the extent that: (i) the Company
Confidential Information is or becomes public knowledge other than through the
fault of such Shareholder; (ii) the Company Confidential Information is or
becomes available on an unrestricted basis to such Shareholder from a source
other than the Company; or (iii) the Company Confidential Information is
required to be disclosed by such Shareholder, under a court order or
governmental action, provided that such Shareholder provides not less than 30
days' prior written notification to the Company of such obligation and seeks, or
allows the Company to seek, an appropriate protective order, and provided
further that disclosure solely pursuant to this clause (iii) shall not release a
Shareholder from such Shareholder's obligation to maintain confidentiality.
5. MISCELLANEOUS.
5.1 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties.
5.2 Governing Law. This Agreement shall be governed by and construed
under the internal laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California, without reference to principles of conflict of laws or choice of
laws.
5.3 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
5.4 Headings. The headings and captions used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs, exhibits and schedules shall, unless otherwise
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provided, refer to sections and paragraphs hereof and exhibits and schedules
attached hereto, all of which are incorporated herein by this reference.
5.5 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 (including
delivery via facsimile) or three (3) days after 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 set forth on the signature page of this
Agreement, or at such other address as such party may designate by ten (10) days
advance written notice to all other parties.
5.6 Attorneys' Fees. 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.
5.7 Representation by Counsel. Each party to this Agreement
acknowledges that it has had the opportunity to obtain the advice of independent
legal counsel.
5.8 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 holders of a majority of the
Series A Stock and/or Series B Stock and/or Conversion Stock then held by all
Shareholders, acting as a single class. Any such amendment or waiver will be
binding on all parties hereto except where the amendment or waiver affects a
right that is specific to a party named herein, in which event the amendment or
waiver of such right requires the consent of such party.
5.9 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms to the maximum extent possible.
5.10 Entire Agreement. This Agreement, together with all exhibits
and schedules hereto, constitutes the entire understanding and agreement of the
parties with respect to the subject matter hereof and supersedes all prior
negotiations, correspondence, agreements, understandings, duties or obligations
among the parties with respect to the subject matter hereof.
5.11 Further Assurances. From and after the date of this Agreement,
upon the request of a party, the other parties shall execute and deliver such
instruments, documents or other writings as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.
5.12 Expenses. Each party will bear its own expenses incurred in
connection with the negotiation and preparation of this Agreement.
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21
5.13 Termination of Prior Agreements. Upon the execution of this
Agreement by Shareholders holding a majority of the Series A Stock subject to
the Third Shareholders' Rights Agreement, the Third Shareholders' Rights
Agreement shall terminate and shall be of no further force or effect (and the
First Shareholders' Rights Agreement and the Second Shareholders' Rights
Agreement each shall remain terminated).
5.14 Determination of Shares. For purposes of this Agreement, the
requisite number of shares of Series A Stock and/or Series B Stock and/or
Conversion Stock and/or Incentive Stock required to be held by a Shareholder to
qualify for any particular rights set forth in this Agreement shall be adjusted
proportionately to reflect any subdivision, combination or stock dividend
affecting the outstanding number of shares of such Stock effected after the date
of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SHAREHOLDERS
ELECTRONICS ARTS INC. MCA, INC.
a Delaware corporation
By: /S/ XXXX X. XXXXXXX By:
------------------------------- ----------------------------------
Title: VP, General Counsel Title:
---------------------------- --------------------------------
XXXXXXX XXXXXXX XXXXXXXX & TECHNOLOGY PARTNERS WEST,
XXXXX V, a California Limited FUND IV, L.P.
Partnership
By: /S/ XXXXX XXXXXX By: /S/ XXXXXXX XXXX
------------------------------- ----------------------------------
Title: General Partner Title: Managing Partner
---------------------------- --------------------------------
KPCB ZAIBATSU FUND I, a TW/THREE D HOLDING CO.
California Limited Partnership By: TW Service Holding I, L.P.
By: /S/ XXXXX XXXXXX By: /S/ XXXXX X. XXXX
------------------------------- ----------------------------------
Title: General Partner Title: Vice President
---------------------------- --------------------------------
MATSUSHITA ELECTRIC AT&T
INDUSTRIAL CO., LTD.
By: /S/ H. TACHIBANA By: /S/ XXXX X. XXXXXXXXXX
------------------------------- ----------------------------------
Title: Dir., Interactive Media Div. Title: VP, New Business Ventures
---------------------------- --------------------------------
CREATIVE TECHNOLOGY LTD.
By:
-------------------------------
Title:
----------------------------
COMPANY
THE 3DO COMPANY
By: /S/ XXXXX XXXX XXXX
-------------------------------
Title: Secretary
----------------------------
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