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EXHIBIT 10.7
XXXXXX.XXX, INC.
AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
FEBRUARY 11, 2000
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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......................................................3
1.3 Company Registration..........................................................5
1.4 Form S-3 Registration.........................................................6
1.5 Obligations of the Company....................................................7
1.6 Furnish Information...........................................................8
1.7 Expenses of Registration......................................................8
1.8 Underwriting Requirements.....................................................9
1.9 Delay of Registration.........................................................9
1.10 Indemnification..............................................................10
1.11 Reports Under Securities Exchange Act of 1934................................12
1.12 Assignment of Registration Rights............................................12
1.13 Limitations on Subsequent Registration Rights................................13
1.14 Market-Standoff Agreement....................................................13
1.15 Termination of Registration Rights...........................................14
2. Covenants of the Company................................................................14
2.1 Delivery of Financial Statements.............................................14
2.2 Inspection...................................................................15
2.3 Right of First Offer.........................................................15
2.4 Option Vesting...............................................................16
2.5 Right of First Refusal.......................................................17
2.6 Capital Stock Change of Controls to Competitors of News America..............18
2.7 Right to Purchase Shares in Public Offering..................................18
2.8 Insurance....................................................................19
2.8 Insurance....................................................................19
2.9 Termination of Covenants.....................................................19
3. Covenants of News America...............................................................20
3.1 Limitation on Ownership......................................................20
3.2 Notice of Capital Stock Purchases............................................20
3.3 Acquisition by Pooling.......................................................21
3.4 Right to Require Sale of the Company.........................................21
3.5 NAI Voting Limitation........................................................21
4. Mutual Non-Solicitation Clause..........................................................22
5. Miscellaneous...........................................................................22
5.1 Successors and Assigns.......................................................22
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5.2 Amendments and Waivers.......................................................22
5.3 Notices......................................................................23
5.4 Severability.................................................................23
5.5 Governing Law................................................................23
5.6 Counterparts.................................................................23
5.7 Titles and Subtitles.........................................................23
5.8 Aggregation of Stock.........................................................23
5.9 Termination of Prior Rights..................................................23
5.10 Confidentiality and Non-Disclosure...........................................24
5.11 Sale of the Company..........................................................25
5.12 Waiver.......................................................................25
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XXXXXX.XXX, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
This Amended and Restated Investor Rights Agreement (the "Agreement") is
made as of the 11th day of February, 2000, by and among Xxxxxx.xxx, Inc., a
Washington corporation (formerly known as Rivalnet, Inc.) (the "Company"), the
holders of shares of Series A Preferred Stock of the Company listed on Exhibit A
attached hereto (the "Series A Investors"), the holders of shares of Series B
Preferred Stock of the Company listed on Exhibit B attached hereto (the "Series
B Investors"), the investors listed on Exhibit C attached hereto (the "Series C
Investors"), the investors listed on Exhibit D attached hereto (the "Series E
Investors" and, collectively with the Series A Investors, the Series B Investors
and the Series C Investors, the "Investors") and the holders of options to
purchase shares of Common Stock of the Company set forth on Exhibit E attached
hereto (the "Officers").
RECITALS
The Company, the Series A Investors, the Series B Investors and the
Series C Investors are parties to the Investor Rights Agreement dated as of
September 30, 1999 (the "Prior Agreement"). The Company and the Series E
Investors have entered into a Series E Preferred Stock Purchase Agreement (the
"Series E Purchase Agreement") dated as of December 21, 1999 pursuant to which
the Company desires to sell to the Series E Investors, and the Series E
Investors desire to purchase from the Company, shares of the Company's Series E
Preferred Stock, and the Company desires to issue to the Series E Investors the
Warrant (as defined in the Series E Purchase Agreement). A condition to the
Series E Investors' obligations under the Series E Purchase Agreement is that
the Company, the Investors and the Officers enter into this Agreement in order
to provide the Investors with (i) certain rights to register shares of the
Company's Common Stock issuable upon conversion of the Preferred Stock held by
the Investors, (ii) certain rights to receive or inspect information pertaining
to the Company and (iii) a right of first offer with respect to certain
issuances by the Company of its securities, as well as to provide certain
additional rights to NAI. The Company, the Series A Investors, the Series B
Investors, the Series C Investors and the Officers each desire to induce the
Series E Investors to purchase shares of Series E Preferred Stock pursuant to
the Series E Purchase Agreement by agreeing to the terms and conditions set
forth herein and to amend and restate the Prior Agreement in its entirety as set
forth herein.
AGREEMENT
The parties hereby agree as follows:
1. Registration Rights. The Company, the Investors and the Officers
covenant and agree as follows:
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1.1 Definitions. For purposes of this Section 1:
(a) The terms "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities Act
of 1933, as amended (the "Securities Act"), and the declaration or ordering of
effectiveness of such registration statement or document;
(b) The term "Registrable Securities" means (i) the
shares of Common Stock issuable or issued upon conversion of shares of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock or Series F Preferred Stock of the
Company; provided, however, that, for the purposes of Sections 1.2, 1.4 and
1.13, the shares of Common Stock issuable or issued upon conversion of shares of
Series A Preferred Stock of the Company shall not be deemed Registrable
Securities, and the Series A Investors will not be deemed Holders, (ii) the
shares of Common Stock of the Company issuable or issued upon exercise of
options to purchase shares of Common Stock of the Company granted to the
Officers; provided, however, that, for purposes of Sections 1.2, 1.4 and 1.13,
such shares shall not be deemed Registrable Securities, and the Officers will
not be deemed Holders, (iii) the shares of Common Stock of the Company issuable
or issued upon exercise of the NAI Common Warrant (as defined in the Series C
Preferred Stock Purchase Agreement, dated as of September __, 1999, between the
Company and the investors listed on Exhibit A attached thereto (the "Series C
Purchase Agreement")), (iv) any shares of Common Stock of the Company issued to
New America Incorporated ("NAI") in a private placement effected pursuant to
Section 3.2 ("Private Placement Shares"), and (v) any other shares of 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 listed in (i), (ii), (iii) and (iv); provided, however, that the
foregoing definition shall exclude in all cases any Registrable Securities sold
by a person in a transaction in which his or her rights under this Agreement are
not assigned. Notwithstanding the foregoing, Common Stock or other securities
shall only be treated as Registrable Securities if and so long as they have not
been (A) sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, or (B) sold in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act under Section 4(1) thereof so that all transfer restrictions, and
restrictive legends with respect thereto, if any, are removed upon the
consummation of such sale;
(c) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities;
(d) The term "Holder" means any person owning or having
the right to acquire Registrable Securities or any assignee thereof in
accordance with Section 1.12 of this Agreement;
(e) The term "Form S-3" means such form under the
Securities Act as
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in effect on the date hereof or any successor form under the Securities Act;
(f) The term "SEC" means the Securities and Exchange
Commission; and
(g) The term "Qualified IPO" means a firm commitment
underwritten public offering by the Company of shares of its Common Stock
pursuant to a registration statement under the Securities Act, the public
offering price of which is not less than $8.85 per share (appropriately adjusted
for any stock split, dividend, combination or other recapitalization) and which
results in aggregate gross proceeds to the Company of at least $15,000,000
(prior to deduction of underwriting discounts and commissions and offering
expenses).
(h) The term "Affiliate" means, with respect to any
Person (the "Subject"), any other Person which, directly or indirectly, Controls
or is Controlled by or is under common Control with the Subject and, without
limiting the generality of the foregoing, shall in any event include (i) any
Person which beneficially owns or holds 5% or more of any class of voting
securities of the Subject or 5% or more of the legal or beneficial interest in
the Subject and (ii) any Person of which the Subject beneficially owns or holds
5% or more of any class of voting securities or 5% or more of the legal or
beneficial interest.
(i) The term "Control" (including with correlative
meanings, the terms "Controlled by" and "under common Control with"), as used
with respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise.
(j) The term "Person" means any individual, partnership,
limited liability company, joint-stock company, firm, corporation, association,
unincorporated organization, joint venture, trust or other entity.
1.2 Request for Registration.
(a) If the Company shall receive at any time after the
earlier of (i) March 5, 2004, or (ii) six (6) months after 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 an SEC Rule 145 transaction), a written request from
the Holders of at least one-third (1/3) of the Registrable Securities then
outstanding that are issuable or issued upon conversion of shares of Series A
Preferred Stock and Series B Preferred Stock of the Company that the Company
file a registration statement under the Securities Act covering the registration
of Registrable Securities with an anticipated aggregate offering price, net of
underwriting discounts and commissions, of at least $5,000,000, then the Company
shall, within ten (10) days of the receipt thereof, give written notice of such
request to all Holders and shall, subject to the limitations of subsection
1.2(d), use its best efforts to effect as soon as practicable, and in any event
within 60 days of the receipt of such request, the registration under the
Securities Act of all Registrable Securities which the Holders request to be
registered within twenty (20) days of the
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mailing of such notice by the Company in accordance with Section 5.3.
(b) If the Company shall receive at any time after the
earlier of (i) March 5, 2004, or (ii) six (6) months after 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 an SEC Rule 145 transaction), a written request from
the Holders of at least one-third (1/3) of the Registrable Securities then
outstanding that are issuable or issued upon conversion of shares of Series C
Preferred Stock of the Company that the Company file a registration statement
under the Securities Act covering the registration of Registrable Securities
with an anticipated aggregate offering price, net of underwriting discounts and
commissions, of at least $5,000,000, then the Company shall, within ten (10)
days of the receipt thereof, give written notice of such request to all Holders
and shall, subject to the limitations of subsection 1.2(d), use its best efforts
to effect as soon as practicable, and in any event within 60 days of the receipt
of such request, the registration under the Securities Act of all Registrable
Securities which the Holders request to be registered within twenty (20) days of
the mailing of such notice by the Company in accordance with Section 5.3.
(c) If the Company shall receive at any time after the
earlier of (i) March 5, 2004, or (ii) six (6) months after 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 an SEC Rule 145 transaction), a written request from
the Holders of at least one-third (1/3) of the Registrable Securities then
outstanding that are issuable or issued upon conversion of shares of Series E
Preferred Stock and Series F Preferred Stock of the Company that the Company
file a registration statement under the Securities Act covering the registration
of Registrable Securities with an anticipated aggregate offering price, net of
underwriting discounts and commissions, of at least $5,000,000, then the Company
shall, within ten (10) days of the receipt thereof, give written notice of such
request to all Holders and shall, subject to the limitations of subsection
1.2(d), use its best efforts to effect as soon as practicable, and in any event
within 60 days of the receipt of such request, the registration under the
Securities Act of all Registrable Securities which the Holders request to be
registered within twenty (20) days of the mailing of such notice by the Company
in accordance with Section 5.3.
(d) 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 this Section 1.2 and the
Company shall include such information in the written notice referred to in
subsection 1.2(a), subsection 1.2(b) or subsection 1.2(c), as the case may be.
The underwriter will be selected by a majority in interest of the Initiating
Holders 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
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securities through such underwriting shall (together with the Company as
provided in subsection 1.5(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 Initiating Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the Initiating
Holders 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 (i) first, among the Initiating Holders, in proportion (as nearly as
practicable) to the amount of Registrable Securities of the Company owned by
each Initiating Holder and (ii) second, among all other Holders thereof who are
not Initiating Holders, in proportion (as nearly as practicable) to the amount
of Registrable Securities of the Company owned by each such other 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.
(e) 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 such filing
for a period of not more than 90 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-month period.
(f) 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) After the Company has effected two (2)
registrations pursuant to Section 1.2(a), Section 1.2(b) and Section 1.2(c) (a
total of six (6)), as the case may be, and such registrations have been declared
or ordered effective;
(ii) 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
(iii) 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 1.4 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 shareholders other than the Holders) any of its
stock under the Securities 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 or a transaction
covered by Rule
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145 under the Securities Act, a registration in which the only stock being
registered is Common Stock issuable upon conversion of debt securities which are
also being registered, or any registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities), 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 5.3,
the Company shall, subject to the provisions of Section 1.8, cause to be
registered under the Securities Act all of the Registrable Securities that each
such Holder has requested to be registered.
1.4 Form S-3 Registration. In case the Company shall receive
from any Holder or Holders of not less than thirty percent (30%) of the
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, 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 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 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 1.4: (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
$1,000,000; (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 90
days after receipt of the request of the Holder or Holders under this Section
1.4; provided, however, that the Company shall not utilize this right more than
once in any twelve month period; (iv) if the Company has, within the twelve (12)
month period preceding the date of such request, already effected two
registrations on Form S-3 for the Holders pursuant to this Section 1.4; (v) 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; or (vi) during the period ending
one hundred eighty (180) days after the effective date of a registration
statement subject to Section 1.3.
(c) Subject to the foregoing, the Company shall file a
registration
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statement covering the Registrable Securities and other securities so requested
to be registered as soon as practicable after receipt of the request or requests
of the Holders. Registrations effected pursuant to this Section 1.4 shall not be
counted as demands for registration or registrations effected pursuant to
Sections 1.2 or 1.3, respectively, and the Holders shall have the right to
request an unlimited number of such registrations (subject to the provisions of
Section 1.4).
(d) For each 500,000 Private Placement Shares (as
adjusted for stock splits, stock dividends, recapitalizations and the like)
purchased by NAI, NAI shall be entitled to request one (1) registration pursuant
to and in accordance with this Section 1.4 without regard to the thirty percent
(30%) limitation set forth in the first sentence of this Section 1.4.
1.5 Obligations of the Company. Whenever required under this
Section 1 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 up to 90 days. The
Company shall not be required to file, cause to become effective or maintain the
effectiveness of any registration statement that contemplates a distribution of
securities on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act.
(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 for up to one hundred twenty
(120) days.
(c) Furnish to the Holders such numbers 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 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.
(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
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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, such obligation to continue for one hundred twenty (120) days.
(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.
(i) Use its best efforts to furnish, at the request of
any Holder requesting registration of Registrable Securities pursuant to this
Section 1, on the date that such Registrable Securities are delivered to the
underwriters for sale in connection with a registration pursuant to this Section
1, 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 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 to the Holders requesting registration of Registrable Securities and
(ii) a letter dated 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 to the Holders requesting
registration of Registrable Securities.
1.6 Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 1
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 reasonably be required to effect the registration of
such Holder's Registrable Securities. The Company shall have no obligation with
respect to any registration requested pursuant to Section 1.2 or Section 1.4 of
this Agreement if, as a result of the application of the preceding sentence, the
number of shares or the anticipated aggregate offering price of the Registrable
Securities to be included in the registration does not equal or exceed the
number of shares or the anticipated aggregate offering price required to
originally trigger the Company's obligation to initiate such registration as
specified in subsection 1.2(a), subsection 1.2(b), subsection 1.2(c) or
subsection 1.4(b)(2), whichever is applicable.
1.7 Expenses of Registration. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, 1.3 and 1.4
including (without limitation) all registration, filing and
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qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company, and the reasonable fees and disbursements of one
counsel for the selling Holders selected by them with the approval of the
Company, which approval shall not be unreasonably withheld, shall be borne by
the Company; provided, however, that the Company shall not be required to pay
for any expenses of any registration proceeding begun pursuant to Section 1.2 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), unless (a) the Holders of a
majority of the Registrable Securities agree to forfeit their right to one
demand registration pursuant to Section 1.2 or (b) such withdrawal directly
results from the Initiating Holders becoming aware of material adverse
information about the Company not known to them prior to the request for
registration.
1.8 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 so
included to be apportioned pro rata among the selling shareholders according to
the total amount of securities entitled to be included therein owned by each
selling shareholder or in such other proportions as shall mutually be agreed to
by such selling shareholders) but in no event shall (i) the amount of securities
of the selling Holders included in the offering be reduced below thirty percent
(30%) 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 shareholders may be excluded if the underwriters make the
determination described above and no other shareholder's securities are included
or (ii) any Registrable Securities that are issued or issuable to an Officer
upon exercise of an option to purchase shares of Common Stock of the Company or
upon conversion of shares of Series A Preferred Stock of the Company and any
securities owned by an officer, director or employee of the Company be included
if any other Registrable Securities held by any other selling Holder are
excluded. For purposes of the preceding parenthetical concerning apportionment,
for any selling shareholder which is a holder of Registrable Securities and
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 "selling shareholder," and any
pro-rata reduction with respect to such "selling shareholder" shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling shareholder," as defined in
this sentence.
1.9 Delay of Registration. No Holder shall have any right to
obtain or seek an
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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.
1.10 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
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 Securities
Exchange Act of 1934, as amended (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
state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law; and the Company will pay to
each such 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 1.10(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable to any Holder, underwriter or controlling person 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 Securities 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 Securities Act, the Exchange 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 1.10(b), in
connection with investigating or defending any such loss, claim, damage,
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liability, or action; provided, however, that the indemnity agreement contained
in this subsection 1.10(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Holder, which consent shall not be unreasonably
withheld; provided, that in no event shall any indemnity under this subsection
1.10(b) exceed the net proceeds from the offering received by such Holder,
except in the case of willful fraud by such Holder.
(c) Promptly after receipt by an indemnified party under
this Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the 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 reasonable 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 liability to the indemnified party under this Section 1.10
to the extent of such prejudice, 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 1.10.
(d) If the indemnification provided for in this Section
1.10 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; provided, that in no event shall any contribution by a Holder
under this Subsection 1.10(d), when combined with any amounts legally required
to be paid under Section 1.10(c), exceed the net proceeds from the offering
received by such Holder, except in the case of willful fraud by such Holder. 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
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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.
(f) The obligations of the Company and Holders under
this Section 1.10 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
1.11 Reports Under Securities Exchange Act of 1934. With a view
to making available to the Holders the benefits of Rule 144 promulgated under
the Securities 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 or pursuant to a registration on Form S-3, 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 so long as the
Company remains subject to the periodic reporting requirements under Sections 13
or 15(d) of the Exchange Act;
(b) take such action, including the voluntary
registration of its Common Stock under Section 12 of the Exchange Act, as is
necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities, such action to be taken as soon as practicable after the
end of the fiscal year in which the first registration statement filed by the
Company for the offering of its securities to the general public is declared
effective;
(c) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(d) 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 Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), or that it qualifies as a registrant whose securities may be
resold pursuant to Form S-3 (at any time after it so qualifies), (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.
1.12 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 (i) a Holder to a transferee
or assignee of at least 250,000 shares of such securities or (ii) in the case of
a Holder of Registrable Securities issuable or issued upon conversion of Series
E Preferred Stock or Series F Preferred Stock, any Affiliate of such Holder or
of SOFTBANK Corp., a Japanese corporation, including, without limitation, any
other
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partnership or other entity of which any direct or indirect subsidiary of
SOFTBANK Corp. is a general partner or has investment discretion, or any
employees of any of the foregoing; provided 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; and provided, further, that 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 Securities 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 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 Section 1.
1.13 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 outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company which would allow such holder or prospective
holder to (a) include such securities in any registration filed under Section
1.2 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, (b) 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 subsection
1.2(a) or within one hundred twenty (120) days of the effective date of any
registration effected pursuant to Section 1.2 or (c) exercise rights of
registration that are otherwise in preference to those granted to the Investors
hereunder.
1.14 Market-Standoff Agreement.
(a) Market-Standoff Period; Agreement. In connection
with the initial public offering of the Company's securities and upon request of
the Company or the underwriters managing such offering of the Company's
securities, each Holder agrees not to sell, make any short sale of, loan, grant
any option for the purchase of, or otherwise dispose of any securities of the
Company (other than those included in the registration) without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed 180 days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the Company's initial public offering.
(b) Limitations. The obligations described in Section
1.14(a) shall apply only if all officers, directors and holders of at least one
percent (1%) of the outstanding shares of capital stock of the Company enter
into similar agreements, and shall not apply to a registration relating solely
to employee benefit plans, or to a registration relating solely to a
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transaction pursuant to Rule 145 under the Securities Act.
(c) Stop-Transfer Instructions. In order to enforce the
foregoing covenants, the Company may impose stop-transfer instructions with
respect to the securities of each Holder (and the securities of every other
person subject to the restrictions in Section 1.14(a)).
(d) Transferees Bound. Each Holder agrees that prior to
the Company's initial public offering it will not transfer securities of the
Company unless each transferee agrees in writing to be bound by all of the
provisions of this Section 1.14.
1.15 Termination of Registration Rights. No Holders shall be
entitled to exercise any right provided for in this Section 1 after the earlier
of (i) seven (7) years following the consummation of a Qualified IPO, or (ii)
such time as Rule 144 or another similar exemption under the Securities Act is
available for the sale of all of such Holder's shares during a three (3)-month
period without registration.
2. Covenants of the Company.
2.1 Delivery of Financial Statements.
(a) The Company shall deliver to each Holder of at least
200,000 shares of Registrable Securities (as adjusted for stock splits, stock
dividends, recapitalizations and the like) who is an Investor (i) 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 for such year, such year-end financial
reports to be in reasonable detail, prepared in accordance with generally
accepted accounting principles ("GAAP"), and audited and certified by an
independent public accounting firm of nationally recognized standing selected by
the Company, and (ii) 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, and, as soon as prepared, any other
budgets or revised budgets prepared by the Company.
(b) The Company shall deliver to each Holder of at least
500,000 shares of Registrable Securities (as adjusted for stock splits, stock
dividends, recapitalizations and the like) who is an Investor, within thirty
(30) days of the end of each month, an unaudited income statement and a
statement of cash flows and balance sheet for and as of the end of such month,
in reasonable detail, accompanied by an instrument executed by the Chief
Financial Officer or President of the Company and certifying that such
financials were prepared in accordance with GAAP consistently applied with prior
practice for earlier periods (with the exception of footnotes that may be
required by GAAP) and fairly present the financial condition of the Company and
its results of operation for the period specified, subject to year-end audit
adjustment, provided that the foregoing shall not restrict the right of the
Company to change its accounting principles consistent with GAAP, if the Board
of Directors determines that it is in the best interest of the Company to do so.
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(c) The Company shall deliver to each Holder of at least
500,000 shares of Registrable Securities issuable or issued upon conversion of
Series E Preferred Stock or Series F Preferred Stock (as adjusted for stock
splits, stock dividends, recapitalizations and the like) who is an Investor (i)
within 15 days of the end of each month or other relevant period, management
reports explaining significant variances from management forecasts and all other
significant developments of the Company and (ii) as soon as practicable, any
other financial or other Company information as such Holders may reasonably
request.
2.2 Inspection. The Company shall permit each Holder of at least
500,000 shares of Registrable Securities (as adjusted for stock splits, stock
dividends, recapitalizations and the like) who is an Investor, at such Holder'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 Right of First Offer. Subject to the terms and conditions
specified in this Section 2.3, the Company hereby grants to each Major Investor
(as hereinafter defined) a right of first offer with respect to future sales by
the Company of its Shares (as hereinafter defined). For purposes of this Section
2.3, a "Major Investor" shall mean any Investor who holds at least 750,000
shares of Common Stock (including Common Stock issuable upon the conversion of
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock, Series E Preferred Stock or Series F Preferred Stock
of the Company), as adjusted for stock splits, stock dividends,
recapitalizations and the like. For purposes of this Section 2.3, a Major
Investor includes any general partners and affiliates of a Major Investor. A
Major Investor who chooses to exercise the right of first offer may designate as
purchasers under such right itself or its partners or 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 Major Investor in accordance with the following provisions:
(a) The Company shall deliver a notice by certified mail
("Notice") to the Major 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) Within fifteen (15) calendar days after delivery of
the Notice, the Major 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 and exercise of all convertible or
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exercisable securities then held, by such Major Investor bears to the total
number of shares of Common Stock then outstanding (assuming full conversion and
exercise of all convertible or exercisable securities). The Company shall
promptly, in writing, inform each Major Investor that purchases all the shares
available to it (each, a "Fully-Exercising Investor") of any other Major
Investor's failure to do likewise. During the ten (10)-day period commencing
after receipt of such information, each Fully-Exercising Investor shall be
entitled to obtain that portion of the Shares for which Major Investors were
entitled to subscribe but which were not subscribed for by the Major Investors
that is equal to the proportion that the number of shares of Common Stock issued
and held, or issuable upon conversion and exercise of all convertible or
exercisable securities then held, by such Fully-Exercising Investor bears to the
total number of shares of Common Stock held by all Fully-Exercising Investors
(assuming full conversion and exercise of all convertible or exercisable
securities).
(c) The Company may, during the 45-day period following
the expiration of the period provided in subsection 2.3(b) hereof, offer the
remaining unsubscribed portion of the 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 30 days of 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 Major Investors in accordance herewith.
(d) The right of first offer in this paragraph 2.3 shall
not be applicable (i) to the issuance or sale of Common Stock (or options
therefor) to employees, consultants, officers and directors pursuant to a stock
option, stock purchase or other equity incentive plan or agreement approved by
the Board of Directors of the Company, (ii) to or after consummation of a
Qualified IPO, (iii) to the issuance of securities pursuant to the conversion or
exercise of convertible or exercisable securities outstanding on the date hereof
or that were subject to (or exempted from) such right of first offer upon the
initial issuance of such convertible or exercisable securities, (iv) to the
issuance of securities in connection with a bona fide business acquisition of or
by the Company approved by the Board of Directors of the Company, whether by
merger, consolidation, sale of assets, sale or exchange of stock or otherwise,
(v) to the issuance of securities to financial institutions or lessors in
connection with commercial credit arrangements, equipment financings, or similar
transactions approved by the Board of Directors of the Company in which the
Company's purpose is other than equity financing, (vi) to the issuance or sale
of any shares of Series E Preferred Stock or Series F Preferred Stock of the
Company, (vii) securities issued or issuable in connection with business
combinations or corporate partnering agreements approved by the Board of
Directors of the Company in which the Company's principal purpose is other than
equity financing, (viii) to the issuance of securities that, with unanimous
approval of the Board of Directors of the Company, are not offered to any
existing shareholder of the Company, or (ix) to the issuance of securities in
connection with the right of first refusal set forth in Section 2.5.
2.4 Option Vesting. Unless otherwise unanimously approved by the
Board of Directors of the Company, all options to purchase shares of the
Company's Common Stock granted to employees of the Company shall vest over a
four-year period, with 25% vesting on the first anniversary of the date of grant
or the commencement of service to the Company, as the
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case may be, and the remainder vesting in equal monthly installments thereafter.
2.5 Right of First Refusal.
(a) The provisions of this Section 2.5(a) shall remain
in effect for so long as either (i) NAI and/or its Affiliates hold at least ten
percent (10%) of the issued and outstanding shares of Common Stock of the
Company (assuming the conversion and exercise of all outstanding convertible or
exercisable securities) or (ii) NAI and/or its Affiliates at all times have held
an aggregate of at least 4,238,999 shares of Common Stock of the Company (on an
as-converted basis, and as adjusted for stock splits, stock dividends,
recapitalizations and the like); provided, however, that in any event this
Section 2.5(a) shall terminate on the fourth anniversary of the date of the
Prior Agreement. The Company agrees that if the Company's Board of Directors
(the "Board") proposes or is required to effect or recommend a Sale (as defined
in Section 2.9(a)) of the Company, or a transaction resulting in the transfer of
majority voting control of the Company (collectively, with a Sale, a "Change of
Control") to any of the entities set forth on Exhibit F attached hereto or any
of their respective Affiliates (the "Primary NAI Competitors"), or, prior to the
Standstill Termination Date (as defined in Section 3.1), to any of the entities
set forth on Exhibit G attached hereto or any of their respective Affiliates
(the "Secondary NAI Competitors") then, prior to engaging in any discussions
with any such Primary NAI Competitor or Secondary NAI Competitor, as the case
may be, for any purposes other than clarification of terms of such proposed
Change of Control, deliver to NAI a term sheet (the "Term Sheet") outlining all
material provisions of such proposed Change of Control, including, but not
limited to, price, payment terms and form of consideration. NAI shall have
fifteen (15)-days from the date of receipt of the Term Sheet to notify the
Company in writing as to whether NAI accepts or rejects the Term Sheet. If,
within such fifteen (15)-day period, NAI notifies the Company that it accepts
the Term Sheet, then the Company and NAI shall both use their reasonable efforts
to promptly complete such Change of Control of the Company to NAI upon the terms
set forth in the Term Sheet. If NAI notifies the Company within such fifteen
(15)-day period that it rejects the Term Sheet or if NAI fails to send written
notice to the Company accepting the Term Sheet within such fifteen (15)-day
period, the Board shall have ninety (90) days from the date of receipt of the
rejection notice or the lapse of such fifteen (15)-day period, as the case may
be, to enter into a definitive agreement or a binding letter of intent with
respect to such Change of Control on terms that are, in the opinion of the
Board, no more favorable in any material respect than those set forth in the
Term Sheet, and the Board shall have one hundred twenty (120) days from the date
of receipt of the rejection notice or the lapse of such fifteen (15)-day period,
as the case may be, to complete such Change of Control; provided, however, that
such one hundred twenty (120) day period shall be extended in the event that the
Change of Control involves registration of securities with the SEC and such
registration process requires a longer time period by the number of days
reasonably required to complete such registration process.
In the event that the Company (A) does not enter into a definitive
agreement or a binding letter of intent with respect to such proposed Change of
Control on terms that are, in the opinion of the Board, no more favorable in any
material respect than those set forth in the Term Sheet within such ninety
(90)-day period, (B) fails to complete the proposed Change of Control within
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such one hundred twenty (120)-day period or (C) fails to complete such Change of
Control on terms that are, in the opinion of the Board, more favorable in any
material respect than those set forth in the Term Sheet, then, prior to
effecting any Change of Control, the Company shall resubmit the original Term
Sheet or submit the new Term Sheet, as applicable, to NAI for its acceptance or
rejection in accordance with the procedures outlined in the first paragraph of
this Section 2.5(a).
(b) NAI may, by written notice to the Company, add to
the list of Primary NAI Competitors attached hereto as Exhibit F; provided,
however, that any such additional Primary NAI Competitor must be ranked in the
top five (5) Persons in terms of number of viewers in the United States of
televised sports video broadcasting during the preceding calendar quarter, as
determined by the Xxxxxxx ratings (or, if such service no longer exists in its
current form, by a comparable service selected by NAI and reasonably acceptable
to the Company). In addition, the parties may remove entities from the list of
Primary NAI Competitors attached hereto as Exhibit F in the event that the
parties shall mutually agree that, due to a change in circumstances, such entity
no longer fits the profile to constitute a Primary NAI Competitor. In the event
that any Primary NAI Competitor shall acquire or be acquired by a Secondary NAI
Competitor, whether by merger, Change of Control of assets, acquisition of stock
or otherwise, such Secondary NAI Competitor shall be deemed a Primary NAI
Competitor.
2.6 Capital Stock Sales to Competitors of NAI. Unless in
connection with a Change of Control of the Company effected in compliance with
the terms and conditions of this Agreement, for so long as either (i) NAI and/or
its Affiliates hold at least ten percent (10%) of the issued and outstanding
shares of Common Stock of the Company (assuming the conversion and exercise of
all outstanding convertible or exercisable securities) or (ii) NAI and/or its
Affiliates at all times have held an aggregate of at least 4,238,999 shares of
Common Stock of the Company (on an as-converted basis, and as adjusted for stock
splits, stock dividends, recapitalizations and the like), the Company shall not,
without the prior written consent of NAI, issue additional equity securities
(including convertible or exercisable securities) totaling more than two percent
(2%) of the outstanding shares of capital stock of the Company to any Primary
NAI Competitor.
2.7 Right to Purchase Shares in Public Offering
(a) In the event that at any time following the
Qualified IPO but prior to the Standstill Termination Date, the Company in good
faith proposes to file a registration statement under the Securities Act (a
"Follow-On Registration Statement") with respect to an offering of shares of its
Common Stock to the public (other than a registration statement in connection
with a stock option, stock purchase or similar incentive plan of the Company or
in connection with an SEC Rule 145 transaction) (a "Follow-On Offering"), to the
extent permissible under the federal securities laws, the rules and regulations
of the National Association of Securities Dealers, Inc. (the "NASD"), and all
other applicable laws, rules and regulations, the Company shall use reasonable
efforts to cause the managing underwriter or underwriters (who were selected by
the Company's Board of Directors, in its sole discretion) for such Follow-On
Offering to offer to NAI the right to purchase up to such number of shares of
the
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Company's Common Stock to be sold in the Follow-On Offering (the "Follow-On
Offering Shares") sufficient to enable NAI to maintain its Percentage Ownership
in the Company, taking into account the issuance of the Follow-On Shares. To the
extent NAI's participation in the Follow-On Offering is not permissible, the
Company and NAI will negotiate in good faith to offer to NAI an alternative
transaction with similar economic effect. The Follow-On Shares shall be offered
to NAI on the same terms and conditions and at the same price at which they are
being offered to the public. If NAI wishes to purchase the Follow-On Shares, it
shall promptly respond to such offer within the time frame reasonably requested
by the managing underwriter(s). The foregoing provisions are not intended to be,
and shall not be construed as, an offer by the Company to sell the Follow-On
Shares. Any such offer will be made pursuant to applicable requirements of the
federal securities laws, the rules and regulations of the NASD, and all other
applicable laws, rules and regulations, as well as the provisions of this
Agreement.
(b) NAI's "Percentage Ownership" shall equal the
quotient of (i) the number of outstanding shares of Common Stock of the Company
held by NAI, divided by (ii) the number of outstanding shares of Common Stock on
a fully-diluted basis, assuming the conversion and exercise of all convertible
and exercisable securities and including all shares reserved for issuance under
the Company's stock option, stock purchase and similar equity incentive plans.
(c) NAI agrees that during the period of time commencing
on the date of the Election and terminating on the earlier of (i) ninety (90)
days following the effective date of the Follow-On Registration Statement and
(ii) the withdrawal of the Follow-On Registration Statement from registration,
it and its Affiliates shall not sell, offer to sell or otherwise transfer or
dispose of any securities of the Company. To enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to the shares held by
NAI and its Affiliates during such period. NAI agrees to execute any similar
market stand-off agreement that may be requested by the underwriters of the
Follow-On Offering.
(d) Notwithstanding anything to the contrary in this
Section 2.7, in the event that the managing underwriter of the Follow-On
Offering determines in its sole discretion that NAI's purchase of the shares
equivalent to its Percentage Ownership hereunder is not compatible with the
success of the Follow-On Offering, NAI shall only purchase the number of shares
that such managing underwriter determines will not jeopardize the success of the
Follow-On Offering.
2.8 Insurance. Within ninety (90) days of the Effective Date,
the Company covenants and agrees that it shall have publishers' liability
insurance and errors and omissions insurance with coverage and policy limits in
reasonable amounts customary for similarly-situated companies in its industry.
2.9 Termination of Covenants.
(a) The covenants set forth in Sections 2.1 through
Section 2.4 shall terminate as to each Investor and be of no further force or
effect (i) immediately prior to the
-22-
23
consummation of a Qualified IPO, or (ii) when the Company shall sell, convey, or
otherwise dispose of all or substantially all of its business or assets or merge
into or consolidate with any other corporation (other than a wholly-owned
subsidiary corporation) or effect any other transaction or series of related
transactions in which more than fifty percent (50%) of the voting power of the
Company is disposed of, provided that this subsection (ii) shall not apply to a
merger effected exclusively for the purpose of changing the domicile of the
Company (in each case, a "Sale").
(b) The covenants set forth in Sections 2.1 and 2.2
shall terminate as to each Holder and be of no further force or effect when the
Company first becomes subject to the periodic reporting requirements of Sections
13 or 15(d) of the Exchange Act, if this occurs earlier than the events
described in Section 2.5(a) above.
(c) the covenants set forth in Sections 2.5, 2.6, 2.7
and 2.8 shall terminate and be of no further force or effect upon the
consummation of any Sale of the Company.
3. Covenants of NAI. NAI hereby covenants and agrees as follows:
3.1 Limitation on Ownership
(a) Except with the prior written consent of a majority
of the Company's Board of Directors (excluding the vote of any director
designated by NAI or any of its Affiliates), NAI shall not, directly or
indirectly, acquire beneficial ownership of any capital stock of the Company,
any securities convertible into or exchangeable for capital stock of the Company
or any other right to acquire capital stock of the Company, including, but not
limited to, exercise of the NAI Warrants (except, in any case, by way of stock
dividends or other distributions or offerings made available to holders of any
capital stock generally), if the effect of such acquisition would be to increase
the number of shares of capital stock of the Company owned by NAI and its
Affiliates to a level exceeding 32.5% of the outstanding shares of Common Stock
of the Company (assuming the conversion and exercise of all convertible or
exercisable securities) (the "Threshold Amount"); provided, however, that the
foregoing limitation shall expire upon February 15, 2001 (the "Standstill
Termination Date").
(b) In the event that (i) the NAI Warrants shall not
have been exercised in full and (ii) the average of the closing prices of the
Company's Common Stock on the Nasdaq National Market or any securities exchange
over the twenty (20) trading days commencing on the one hundred twenty fifth
(125th) day following the closing of the Qualified IPO is greater than $14.15
per share (as adjusted for stock splits, stock dividends, recapitalizations and
the like), then, as of the termination of the NAI Common Warrant, the Threshold
Amount shall be reduced by the number of unexercised shares under the NAI
Warrants (appropriately adjusted for stock splits, stock dividends,
recapitalizations and the like).
3.2 Notice of Capital Stock Purchases; Option to Sell.
(a) NAI shall notify the Company as to any future
acquisition by it or
-23-
24
its Affiliates of beneficial ownership of capital stock of the Company, or
rights thereto, at least ten (10) business days prior to taking such action, in
order for the Company to monitor compliance with the terms of this Agreement.
All purchases of capital stock of the Company by NAI or its Affiliates shall be
made in compliance with applicable laws and regulations.
(b) At all times prior to the Standstill Termination
Date, NAI shall not make any purchases of Common Stock of the Company at a price
per share of less than $14.15 per share (as adjusted for stock splits, stock
dividends, recapitalizations and the like) without first notifying the Company
of its intention to do so and the number of shares which NAI intends to
purchase. Following such notice, the Company shall have a period of ten (10)
days in which to notify NAI, if it so elects, of its desire to effect a private
placement of shares of Common Stock of the Company to NAI. In the event that the
Company so notifies NAI, NAI and the Company shall negotiate in good faith to
effect such a private placement at the then current market price of the Common
Stock of the Company within forty-five (45) days of such notification by the
Company, and during such forty-five (45)-day period, NAI agrees that it and its
Affiliates shall not otherwise acquire beneficial ownership of any shares of
capital stock of the Company, or any rights thereto.
Notwithstanding the foregoing, this Section 3.2(b) shall
not apply to purchases by NAI of shares of capital stock of the Company pursuant
to (i) the Amended and Restated Co-Sale Agreement dated as of the date hereof by
and among the Company, the Investors and certain holders of the Company's
securities, (ii) Section 2.3, 2.5 or 2.7 of this Agreement, (iii) the NAI
Warrants or (iv) any purchase of shares of capital stock of the Company, that,
following such purchase and assuming the exercise in full of the NAI Warrants
(even if earlier expired or terminated unless the NAI Warrants have not been
exercised and have expired or terminated) would result in the ownership of NAI
and its Affiliates of less than the Threshold Amount of the Company's capital
stock.
3.3 Acquisition by Pooling. If the Company enters into any
agreement providing for the acquisition of the Company by merger, sale of assets
or otherwise in a negotiated transaction approved by the Board of Directors of
the Company, then if such agreement provides, as a condition to closing, that
the transaction shall be treated as a pooling of interests under generally
accepted accounting principles, NAI shall (a) refrain from exercising any right
of appraisal and (b) not sell or otherwise reduce its risk relative to any
securities received in such combination until such time as financial results
covering at least thirty (30) days of post-transaction combined operations have
been published.
3.4 NAI Vote Regarding Sale of the Company. Prior to a Qualified
IPO, if more than 50%, or a greater percentage, if required for approval, of the
aggregate number of outstanding shares of Common and Preferred Stock of the
Company that are entitled to vote to approve a Sale of the Company are so voted,
then NAI and its Affiliates shall also vote all shares held by them in favor of
the Sale.
3.5 NAI Voting Limitations. In the event that at any time NAI
and its Affiliates shall hold greater than 32.5% of the outstanding voting
shares of capital stock of
-24-
25
Company, NAI covenants and agrees that NAI and its Affiliates will not take any
shareholder action with respect to any such shares in excess of 32.5%, whether
by vote, written consent or otherwise, unless (a) pursuant to Section 3.4 or (b)
with the unanimous written consent of the Board of Directors of the Company;
provided, however, that the foregoing limitation shall expire upon the
Standstill Termination Date. Additionally, until such time as NAI, in its sole
discretion, provides notice to the Company to the contrary, NAI and its
Affiliates will not take any shareholder action with respect to any of the
outstanding shares of capital stock of the Company in excess of 19.9%, whether
by vote, written consent or otherwise.
4. Non-Solicitation. Until the earlier of (a) the date upon which NAI
owns less than ten percent (10%) of the outstanding shares of Common Stock of
the Company (assuming the conversion and exercise of all convertible or
exercisable securities) and (b) the date that is one (1) year following the
termination of expiration of the License Agreement, (i) the Company and its
majority-owned subsidiaries shall not solicit, employ or retain or arrange to
have any other person, firm or entity solicit, employ or retain or otherwise
participate in the employment or retention of, any employee of News America
Digital Publishing, Inc. or the Fox Sports Television Group (including Fox
Sports Network and Fox Sports International) (including any independent
contractor or agent who devotes at least fifty percent (50%) of his or her
business time to News America Digital Publishing, Inc. or the Fox Sports
Television Group (including Fox Sports Network and Fox Sports International))
without the prior written consent of NAI and (ii) NAI agrees that News America
Digital Publishing, Inc. and the Fox Sports Net Television Group (including Fox
Sports Network and Fox Sports International) shall not solicit, employ or
retain, or arrange to have any other person, firm or entity solicit, employ,
retain, or otherwise participate in the employment or retention of, any person
who is an employee of the Company or any of its majority-owned subsidiaries
(including any independent contractor or agent who devotes at least fifty
percent (50%) of his or her business time to the Company or any of its
majority-owned subsidiaries) without the prior written consent of the Company.
5. Miscellaneous.
5.1 Successors and Assigns. Except as otherwise provided in this
Agreement, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective permitted successors and assigns of the
parties (including transferees of any of the Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock or Series F Preferred Stock of the Company or any Common Stock
issued upon conversion thereof). 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.
5.2 Amendments and Waivers. Any term of this Agreement may be
amended or waived only with the written consent of the Company and the holders
of a majority of the Registrable Securities then outstanding (not including
Registrable Securities held by the Officers); provided, however, that (i) if
such amendment affects the Officers in a manner different than the Investors and
adverse to the Officers, then such amendment shall also require
-25-
26
the consent of the holders of a majority of the Registrable Securities then
outstanding held by the Officers; and (ii) if such amendment affects the holders
of the Registrable Securities then outstanding that are issued or issuable upon
conversion of Series E Preferred Stock or Series F Preferred Stock (the "Series
E/F Holders") in a manner different than the other holders of Registrable
Securities then outstanding and adverse to the Series E/F Holders, then such
amendment shall all require the consent of the holders of a majority of the
Registrable Securities then outstanding held by the Series E/F Holders. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each holder of any Registrable Securities then outstanding, each future
holder of all such Registrable Securities, and the Company; and, provided
further, that Sections 2.5, 2.6, 2.7, 3 and 4 may only be amended or waived with
the consent of the Company and NAI.
5.3 Notices. Unless otherwise provided, any notice required or
permitted by this Agreement shall be in writing and shall be deemed sufficient
upon delivery, when delivered personally or by overnight courier or sent by
telegram or fax, or forty-eight (48) hours after being deposited in the U.S.
mail, as certified or registered mail, with postage prepaid, and addressed to
the party to be notified at such party's address or fax number as set forth
below or on Exhibit A, Exhibit B, Exhibit C or Exhibit D hereto or as
subsequently modified by written notice.
5.4 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith. In the event that the parties cannot
reach a mutually agreeable and enforceable replacement for such provision, then
(a) such provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
5.5 Governing Law. This Agreement and all acts and transactions
pursuant hereto shall be governed, construed and interpreted in accordance with
the laws of the State of Washington, without giving effect to principles of
conflicts of laws.
5.6 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.
5.7 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.
5.8 Aggregation of Stock. All shares of the Preferred Stock 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.
5.9 Termination of Prior Rights. Effective and contingent upon
execution of this Agreement by the Company and the holders of a majority of the
outstanding Registrable Securities (as such term is defined in the Prior
Agreement) and upon the closing of the transactions contemplated by the Series E
Purchase Agreement, the Prior Agreement shall be null
-26-
27
and void and amended and restated in its entirety to read as set forth in this
Agreement, and the Company and the Investors hereby shall be bound by the
provisions hereof as the sole agreement of the Company and the Investors with
respect to registration rights of the Company's securities and the other rights
set forth herein.
5.10 Confidentiality and Non-Disclosure. The terms and
conditions of this Agreement and the Agreements (as defined in the Series C
Purchase Agreement) (collectively, the "Financing Terms"), including their
existence, shall be considered confidential information and shall not be
disclosed by any party hereto to any third party except in accordance with the
provisions set forth below.
(a) Press Releases, Etc. Within sixty (60) days of the
Closing (as defined in the Series C Purchase Agreement), the Company may issue a
press release disclosing that the Investors have invested in the Company;
provided that the release does not disclose any of the Financing Terms and the
final form of the press release is approved in advance in writing by Intel
Corporation ("Intel") and a majority-in-interest of the Series C Investors.
Intel's name and the fact that Intel is an investor in the Company can be
included in a reusable press release boilerplate statement if such boilerplate
statement is reproduced in the form in which it was approved. No other
announcements regarding any Investor in any press release, conference,
advertisement, announcement, professional or trade publications, mass marketing
materials or otherwise to the general public may be made without such Investor's
prior written consent.
(b) Permitted Disclosures. Notwithstanding the
foregoing, (i) any party may disclose any of the Financing Terms to its current
or bona fide prospective investors, limited or general partners, employees,
investment bankers, lenders, accountants and attorneys, in each case only where
such persons or entities are under appropriate nondisclosure obligations, (ii)
any party may disclose (other than in a press release or other public
announcement described in subsection (a) solely the fact that the Investors are
investors in the Company to any third parties without the requirement for the
consent of any other party or nondisclosure obligations, and (iii) Intel may
disclose its investment in the Company and the Financing Terms to third parties
or to the public at its sole discretion and, if it does so, the other parties
hereto shall have the right to disclose to third parties any such information
disclosed in a press release or other public announcement made by Intel.
(c) Legally Compelled Disclosure. In the event that any
party is requested or becomes legally compelled (including without limitation,
pursuant to securities laws and regulations) to disclose the existence of any of
the Financing Terms hereof in contravention at this Section 5.10, such party
(the "Disclosing Party") shall act reasonably to provide the other parties (the
"Non-Disclosing Parties") with prompt written notice of that fact so that the
appropriate party may seek (with the cooperation and reasonable efforts of the
other parties) a protective order, confidential treatment or other appropriate
remedy. In such event, the Disclosing Party shall furnish only that portion of
the information which is legally required and shall exercise reasonable efforts
to obtain reliable assurance that confidential treatment will be accorded such
information to the extent reasonably requested by any Non-Disclosing Party.
-27-
28
(d) Other Information. The provisions of this Section
5.10 shall be in addition to, and not in substitution for, the provisions of any
separate nondisclosure agreement executed by any of the parties hereto with
respect to the transactions contemplated by the Series C Purchase Agreement.
Additional disclosures and exchange of confidential information between the
Company and Intel (including without limitation, any exchanges of information
with any Intel board observer) shall be governed by the terms of the Corporate
Non-Disclosure Agreement No. 0272085, dated March 2, 1999, executed by the
Company and Intel, and any Confidential Information Transmittal Records provided
in connection therewith.
(e) All notices required under this Section 5.10 shall
be made pursuant to Section 5.3 of this Agreement.
(f) Notwithstanding anything to the contrary in this
Section 5.10, the provisions of this Section 5.10 shall not apply to entities
affiliated with Hummer Winblad Venture Partners, including, but not limited to,
its general or limited partners or employees.
5.11 Sale of the Company. In the event that a Sale of the
Company is approved by (a) the Board of Directors of the Company and (b) the
holders of a majority of the then-outstanding shares of Preferred Stock and
Common Stock of the Company (not including shares held by Intel Corporation),
voting together as a single class, not as separate classes or series, and on an
as-converted basis, Intel hereby agrees to:
(i) not exercise any dissenters' rights under applicable
law at any time for such Sale of the Company; and
(ii) refrain from transferring any securities of the
Company, the acquirer, or any other applicable company during any period
prohibited by then applicable "pooling of interests" accounting treatment rules,
whether before or after the Sale of the Company, provided that such period of
restriction prior to the closing of a Sale of the Company shall not exceed one
hundred twenty (120) days; and provided further that this Section 4.11 shall
only apply if the Company's independent accountants determine, in their sole
professional judgment, that such restrictions must apply to Intel in order to
obtain and preserve "pooling of interests" accounting treatment and Intel is
provided with written notice of such conclusion.
5.12 Waiver. By execution of this Agreement, each Major Investor
(as defined in the Prior Agreement) hereby waives its rights of first offer
pursuant to Section 2.3 of the Prior Agreement, and any applicable notice
provisions relating thereto, with respect to all outstanding shares of Series B
Preferred Stock of the Company, the shares of Series C Preferred Stock of the
Company issued pursuant to the Series C Purchase Agreement, the shares of Series
E Preferred Stock of the Company issued pursuant to the Series E Purchase
Agreement, the NAI Warrants, the Xxxxxxx Media Warrant (as defined in the Series
C Purchase Agreement), the shares of Common Stock and Series D Preferred Stock
of the Company issuable upon exercise of the NAI Warrants, the shares of Series
C Preferred Stock issuable upon exercise of the Xxxxxxx Media Warrant, the
shares of Series F Preferred Stock issuable upon exercise of the Warrant (as
defined in the Series E Purchase Agreement) and the shares of Common Stock of
the Company issuable upon conversion of such shares of Series B Preferred Stock,
Series C Preferred Stock, Series D
-28-
29
Preferred Stock, Series E Preferred Stock and Series F Preferred Stock.
-29-
30
The parties have executed this Amended and Restated Investor Rights
Agreement as of the date first written above.
THE COMPANY:
XXXXXX.XXX, INC.
By:
Xxxxx X. Xxxxxxx, Xx.
President
Address: 00 Xxxxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
INVESTORS:
NEWS AMERICA INCORPORATED
By:
Name:
(print)
Title:
SIGNATURE PAGE TO XXXXXX.XXX, INC. INVESTORS RIGHTS AGREEMENT
31
HUMMER WINBLAD VENTURE PARTNERS III,
L.P.
By:
Name:
(print)
Title:
HUMMER WINBLAD TECHNOLOGY FUND III,
L.P.
By:
Name:
(print)
Title:
HUMMER WINBLAD VENTURE PARTNERS IV,
L.P.
By:
Name:
(print)
Title:
SIGNATURE PAGE TO XXXXXX.XXX, INC. INVESTORS RIGHTS AGREEMENT
32
INTEL CORPORATION
By:
Name:
(print)
Title:
SIGNATURE PAGE TO XXXXXX.XXX, INC. INVESTORS RIGHTS AGREEMENT
33
THE PHOENIX PARTNERS III B
LIMITED PARTNERSHIP
By: The Phoenix Management Partners
III, its General Partner
By:
---------------------------------
Xxxxx X. Xxxxxxxx,
General Partner
THE PHOENIX PARTNERS IV LIMITED
PARTNERSHIP
By: The Phoenix Management Partners
IV LLC, its General Partner
By:
---------------------------------
Xxxxx X. Xxxxxxxx,
Member
SIGNATURE PAGE TO XXXXXX.XXX, INC. INVESTORS RIGHTS AGREEMENT
34
Xxxx Xxxxxxx
XXXXXXX MEDIA, INC.
By:
Name:
(print)
Title:
SIGNATURE PAGE TO XXXXXX.XXX, INC. INVESTORS RIGHTS AGREEMENT
35
SOFTBANK CAPITAL PARTNERS LP
By: SOFTBANK Capital Partners LLC
Its General Partner
By:
------------------------------
Name:
Title:
SOFTBANK CAPITAL ADVISORS FUND LP
By: SOFTBANK Capital Partners LLC
Its General Partner
By:
------------------------------
Name:
Title:
SIGNATURE PAGE TO XXXXXX.XXX, INC. INVESTORS RIGHTS AGREEMENT
36
OFFICERS:
------------------------------------
Xxxxx X. Xxxxxxx, Xx.
------------------------------------
Xxxxxxx X. Xxxx
------------------------------------
Xxxx Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxx
------------------------------------
Xxxx Xxxxxxxxx
------------------------------------
Xxxxxxx Xxxxxxx
------------------------------------
Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
SIGNATURE PAGE TO XXXXXX.XXX, INC. INVESTORS RIGHTS AGREEMENT
37
EXHIBIT A
SERIES A INVESTORS
NAME/ADDRESS/FAX NO. OF SHARES
---------------- -------------
Xxxxxx Xxxxxx 300,000
000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxx 00000-0000
Xxxx Xxxxxxx III and Xxxxx Xxx Xxxxxxx, 300,000
trustees of the Xxxxxxx 96 Revocable
Trust dated November 13, 1996
c/o Bay Partners
00000 Xxxxx Xx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Xxxxxxx X. Xxxxx 280,000
000 Xxxx Xxxxxx #000
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Xxxxx X. and Xxx Xxxxxxx 140,000
000 Xxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Xxxxxxx Media, Inc.
c/o Xxxxxx.xxx, Inc. 1,240,000
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx, Xx.
Xxxx X. Xxxxxxx and Xxxxxx Xxxxxx 200,000
000 Xxxxx X Xxxxxx
Xxxxxxxxxxx, Xxxxx 00000-0000
Xxxxx X. Xxxxxxxx 260,000
c/o The Phoenix Partners
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000-0000
T. Xxxx Xxxxx 200,000
0000 - 00xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxxxxx 00000-0000
Xxxxx Xxxxx 300,000
c/o Xxxxxx.xxx, Inc.
38
NAME/ADDRESS/FAX NO. OF SHARES
---------------- -------------
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Saffron, LLC 100,000
00000 Xxxxxxxxx Xxx
Xxxx Xxxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx Xxxxx
Xxxx X. Xxxxxxxx 200,000
X.X. Xxx 00000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Xxxxx X. Xxxx 80,000
6598 - 000xx Xxxxxx X.X.
Xxxxxxxx, Xxxxxxxxxx 00000
Xxxxxxx Xxxxxx 40,000
0000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Xxxxx X. Xxxxxx 80,000
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Xxxxxxx Xxxxxx 80,000
0000 Xxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Great Northern Ventures LLC 60,000
0000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Xxxxxxx X. Xxxx 200,000
0000 00xx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
-38-
39
EXHIBIT B
SERIES B INVESTORS
NAME/ADDRESS/FAX NO. OF SHARES
---------------- -------------
Hummer Winblad Venture Partners III, L.P. 3,620,656
0 Xxxxx Xxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxx
Fax: (000) 000-0000
Hummer Winblad Technology Fund III, L.P. 190,561
0 Xxxxx Xxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxx
Fax: (000) 000-0000
Intel Corporation 1,905,609
Attn: Merger & Acquisitions Portfolio Manager
RN6-46
0000 Xxxxxxx Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
The Phoenix Partners IV Limited Partnership 714,603
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
The Phoenix Partners III B Limited Partnership 238,201
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
Venture Law Group Investments 1999 15,238
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Xxxxx X. Xxxxxxx 3,809
c/o Venture Law Group
40
NAME/ADDRESS/FAX NO. OF SHARES
---------------- -------------
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Xxxx Xxxx 48,871
0000 00xx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
RIP General Partnership 97,743
Attn: Xxxx Xxxxx
00000 - 00xx Xxxxx X.
Xxxxxxx, Xxxxxxxxxx 00000
Rock Creek Partners 48,871
Attn: Xxxx Xxxxxx
0000 Xxxxxx Xxxxxx X., Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Xxxx Xxxxxxx 48,871
0000 - 00xx Xxxxxx XX
Xxxxxx Xxxxxx, Xxxxxxxxxx 00000
Overlake Orthopaedic & Fracture 48,819
Center Profit Sharing Trust
Attn: X.X. Xxxxxxxx
0000 Xxxxx Xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Willamette Trust dated 10/25/95 48,151
Attn: Xxxxxx Xxxxxxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Dakota Capital Partners, L.L.C. 19,201
Attn: Xxxxx Xxxxxxxxx
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxxx and Xxxxxxx Xxxxxxxxx 48,433
c/o MPC, Inc.
000 Xxxxxx Xxxxxx X.
Xxxxxxx, Xxxxx 00000
Great Northern Ventures LLC 192,104
-40-
41
NAME/ADDRESS/FAX NO. OF SHARES
---------------- -------------
Attn: Xxxx Xxxxxxx
0000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Xxxxxxx Xxxxx 47,984
0000 - 000xx Xxxxxx XX
Xxxxxxx, Xxxxxxxxxx 00000
Xxx Xxxxxxxx 12,032
0000 - 000xx Xxxxxx XX
Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxx Xxxxxxxxx 12,024
00 Xxxxxxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxx 00000
Xxxxxxx Xxxxx 12,024
00000 - 00xx Xxxxx XX
Xxxx Xxxxx, Xxxxxxxxxx 00000
Staenberg Private Capital, LLC 47,963
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Xxxx Xxxxxxxxx 19,201
c/o Kirkland & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Xxxxxxx X. and Xxxx X. Xxxxx 48,151
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxx Xxxxxx, Xxxxxxx 00000
Xxxxxx Xxxxxx 48,527
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxx 00000-0000
Xxxxxx Xxxxx 24,195
000 Xxxxx 00xx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Xxxxxx Xxxx 12,024
0000 Xxxxxx Xxxxxx
-41-
42
NAME/ADDRESS/FAX NO. OF SHARES
---------------- -------------
Xxx Xxxxx, Xxxxxxxxxx 00000
Xxxx Xxxxxxxxx 25,000
0000 - 000xx Xxxxxx XX
Xxxxxxxx, Xxxxxxxxxx 00000
Xxxxxxx X. Xxxxx 47,619
0000 X. Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
-42-
43
EXHIBIT C
SERIES C INVESTORS
NAME/ADDRESS/FAX NO. OF SHARES
---------------- -------------
News America Incorporated 4,238,999
c/o News America Digital Publishing, Inc.
620 Avenue of the Americas, Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxx, Senior Vice President,
Finance and Business Operations
Fax: (000) 000-0000
Hummer Winblad Venture Partners IV, L.P. 1,313,509
0 Xxxxx Xxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxx
Fax: (000) 000-0000
Intel Corporation 656,755
Attn: Mergers & Acquisitions Portfolio Manager
RN6-46
0000 Xxxxxxx Xxxxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
The Phoenix Partners IV Limited Partnership 328,377
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
Xxxxxxx Media, Inc. 0
c/o Xxxxxx.xxx Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Xxxx Xxxxxxx 100,000
c/o Xxxxxx.xxx Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
44
EXHIBIT C
SERIES C INVESTORS
NAME/ADDRESS/FAX NO. OF SHARES
---------------- -------------
EXHIBIT D
SERIES E INVESTORS
NAME/ADDRESS/FAX NO. OF SHARES
---------------- -------------
SOFTBANK Capital Partners LP 2,957,100
00 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Fax: (000) 000-0000
SOFTBANK Capital Advisors Fund LP 42,900
00 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Fax: (000) 000-0000
45
NAME/ADDRESS/FAX NO. OF SHARES
---------------- -------------
EXHIBIT E
OFFICERS
NAME/ADDRESS/FAX
Xxxxx X. Xxxxxxx Xx. 00 Xxxxxxxx Xxxxxx, Xxxxx 000
c/o Xxxxxx.xxx Inc. Xxxxxxx, Xxxxxxxxxx 00000
00 Xxxxxxxx Xxxxxx, Xxxxx 000 Fax: (000) 000-0000
Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000 Xxxxx Xxxxxx
c/o Xxxxxx.xxx Inc.
Xxxxxxx X. Xxxx 00 Xxxxxxxx Xxxxxx, Xxxxx 000
c/o Xxxxxx.xxx Inc. Xxxxxxx, Xxxxxxxxxx 00000
00 Xxxxxxxx Xxxxxx, Xxxxx 000 Fax: (000) 000-0000
Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000 Xxxxx Xxxxxx
c/o Xxxxxx.xxx Inc.
Xxxx Xxxxxxx 00 Xxxxxxxx Xxxxxx, Xxxxx 000
c/o Xxxxxx.xxx Inc. Xxxxxxx, Xxxxxxxxxx 00000
00 Xxxxxxxx Xxxxxx, Xxxxx 000 Fax: (000) 000-0000
Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Xxxxxxx X. Xxxxx
c/o Xxxxxx.xxx Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Xxxx Xxxxxxxxx
c/o Xxxxxx.xxx Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Xxxxxxx Xxxxxxx
c/o Xxxxxx.xxx Inc.
-45-
46
EXHIBIT C
SERIES C INVESTORS
NAME/ADDRESS/FAX NO. OF SHARES
---------------- -------------
EXHIBIT F
PRIMARY NAI COMPETITORS
CBS Worldwide Inc.
National Broadcasting Company (General Electric)
ABC/ESPN (Disney Corporation)
CNN/SI (Time Warner Corporation)
The Sporting News (Times Mirror)
Viacom, Inc. (effective only upon completion of its
proposed merger with CBS Worldwide, Inc.)
47
EXHIBIT C
SERIES C INVESTORS
NAME/ADDRESS/FAX NO. OF SHARES
---------------- -------------
EXHIBIT G
SECONDARY NAI COMPETITORS
America Online, Inc.
RealNetworks
Yahoo! Inc.
Vulcan Ventures
Microsoft Corporation
