1
EXHIBIT 4.2
XXXXXXXXXXXX.XXX INC.
THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
DECEMBER 22, 1999
2
TABLE OF CONTENTS
PAGE
----
SECTION 1
RESTRICTIONS ON TRANSFERABILITY; REGISTRATION RIGHTS...........................2
1.1 CERTAIN DEFINITIONS..............................................2
1.2 RESTRICTIONS.....................................................4
1.3 RESTRICTIVE LEGEND...............................................4
1.4 NOTICE OF PROPOSED TRANSFERS.....................................5
1.5 REQUESTED REGISTRATION...........................................5
1.6 COMPANY REGISTRATION.............................................7
1.7 REGISTRATION ON FORM S-3.........................................8
1.8 EXPENSES OF REGISTRATION.........................................9
1.9 REGISTRATION PROCEDURES..........................................9
1.10 INDEMNIFICATION.................................................11
1.11 INFORMATION BY HOLDER...........................................13
1.12 RULE 144 REPORTING..............................................13
1.13 TRANSFER OF REGISTRATION RIGHTS.................................13
1.14 STANDOFF AGREEMENT..............................................14
1.15 TERMINATION OF RIGHTS...........................................14
1.16 OTHER REGISTRATION RIGHTS.......................................14
SECTION 2
RIGHT OF FIRST OFFER AND ELECTION OF DIRECTORS................................15
2.1 INVESTORS' RIGHT OF FIRST OFFER.................................15
2.2 ELECTION OF DIRECTORS...........................................16
2.3 TERMINATION OF RIGHT OF FIRST OFFER AND ELECTION OF DIRECTORS...18
SECTION 3
AFFIRMATIVE COVENANTS OF THE COMPANY..........................................18
3.1 FINANCIAL INFORMATION...........................................18
3.2 DELIVERY OF INFORMATION.........................................18
3.3 INSPECTION......................................................18
3.4 EXPENSES OF THE BOARD OF DIRECTORS..............................19
3.5 RESERVED EMPLOYEE SHARES........................................19
3.6 ACQUISITION OF STOCK............................................19
3.7 TITLES AND SALARIES.............................................19
3.8 BOARD OF DIRECTORS MEETINGS.....................................19
3.9 IRC SECTION 305.................................................19
3.10 BOARD OF DIRECTORS..............................................19
3.11 POSITIVE COVENANTS..............................................20
3.12 NEGATIVE COVENANTS..............................................21
3.13 STOCK RESTRICTION AGREEMENTS....................................22
3.14 OBSERVER RIGHTS.................................................20
3.15 TERMINATION OF SECTION 3 RIGHTS.................................22
i
3
SECTION 4
MISCELLANEOUS.................................................................22
4.1 GOVERNING LAW...................................................22
4.2 THIRD PARTIES...................................................22
4.3 SURVIVAL........................................................22
4.4 SUCCESSORS AND ASSIGNS..........................................22
4.5 ENTIRE AGREEMENT; AMENDMENT.....................................22
4.6 EFFECT OF AMENDMENT OR WAIVER...................................23
4.7 RIGHTS OF HOLDERS...............................................23
4.8 NOTICES, ETC....................................................23
4.9 DELAYS OR OMISSIONS.............................................24
4.10 COUNTERPARTS....................................................24
4.11 SEVERABILITY OF THIS AGREEMENT..................................24
EXHIBIT A SERIES A PREFERRED INVESTOR SCHEDULE
EXHIBIT B SERIES B PREFERRED INVESTOR SCHEDULE
EXHIBIT C SERIES C PREFERRED INVESTOR SCHEDULE
ii
4
THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
THIS THIRD AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (the
"Agreement") is entered into as of this 22nd day of December, 1999 by and among
(i) XxxxxxxXxxxx.xxx Inc., a Delaware corporation (the "Company"), with
principal offices located at 0000 X Xxxxxx, X.X., Xxxxx Xxxxx, Xxxxxxxxxx, X.X.
00000, (ii) those holders of the Company's Series A Preferred Stock (the "Series
A Preferred") listed on Exhibit A attached hereto (the "Series A Investors"),
(iii) Xxxxx & Xxxxxx, Inc. ("B&T"), a Delaware corporation with its principal
office at Five LakePointe Plaza, Suite 500, 0000 Xxxxx Xxxxx Xxxxxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000, (iv) those holders of the Company's Series B Preferred
Stock (the "Series B Preferred") listed on Exhibit B attached hereto (the
"Series B Investors"), (v) those holders of the Company's Series C Preferred
Stock (the "Series C Preferred" and together with the Series A Preferred and
Series B Preferred, the "Preferred Stock") listed on Exhibit C attached hereto
(the "Series C Investors"), (vi) Xxxx X. Xxxx, (vii) Xxxxxxx X. Xxxx, and
(viii) America Online, Inc. ("AOL" and together with the Series A Investors,
the Series B Investors and Series C Investors, the "Investors").
R E C I T A L S :
WHEREAS, the Company, the Series A Investors and B&T have entered into
that certain Investors' Rights Agreement (the "Original Agreement"), dated as of
August 6, 1998;
WHEREAS, the Company, the Series A Investors, Series B Investors and B&T
entered into that certain Amended and Restated Investors Rights Agreement (the
"Second Agreement"), dated as of February 25, 1999;
WHEREAS, the Company, the Series A Investors, Series B Investors, the
Series C Investors, Xxxx Xxxx, Xxxxxxx Xxxx and B&T entered into that certain
Second Amended and Restated Investors Rights Agreement (the "Third Agreement"),
dated as of August 27, 1999;
WHEREAS, on the date hereof, the Company and ICQ, Inc. are entering into
that certain Interactive Marketing Agreement (the "Marketing Agreement")
pursuant to which the Company shall grant that certain contingent Stock
Subscription Warrant (the "Warrant") dated as of December 22, 1999, to AOL to
purchase an aggregate of up to 463,246 shares of the Common Stock of the
Company;
WHEREAS, it is a condition to the Warrant and to the closing of the
transactions contemplated by the Marketing Agreement that the Company and the
Investors enter into this Agreement to, among other things, amend and restate
the rights granted pursuant to the Third Agreement in order to provide AOL with
certain rights in connection with the Warrant;
WHEREAS, pursuant to Section 4.5 of the Third Agreement, the Third
Agreement or any term thereof may be amended, waived, discharged or terminated
by a written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought; provided, however, that
(i) a majority of the outstanding Registrable Securities whether or not
converted by the Series A Investors and B&T and (ii) a majority of the
outstanding Registrable Securities whether or not converted held by the Series B
Investors, each
1
5
group voting separately as a class, may waive or amend, on behalf of the
Investors and other holders of Shares, any provisions of the Second Agreement
benefiting the Series A Investors and Series B Investors so long as the effect
thereof will be that the Series A Investors and Series B Investors and other
holders of Shares will be treated equally, and (iii) a majority of the
outstanding Registrable Securities (whether or not converted) held by the Series
C Investors, each group voting separately as a class, may waive or amend, on
behalf of the Investors and other holders of Shares, any provisions of the Third
Agreement benefiting the Investors so long as the effect thereof will be that
the Investors and other holders of Shares will be treated equally; provided,
further, that (i) any action that would affect the rights of Xx. Xxxx or Xx.
Xxxx under the Third Agreement will only be effective with their written consent
and (ii) the rights of any series of Preferred Stock, any individual, or any
entity to nominate a director under Section 2.2 will not be amended without the
consent of such individual or a majority of the holders of such series; and
WHEREAS, by entering into this Agreement, the Series A Investors whose
signatures are set forth on the signature pages hereto, which Series A Investors
constitute a majority of the outstanding Registrable Securities; the Series B
Investors whose signatures are set forth on the signature pages hereto, which
Series B Investors constitute a majority of the outstanding Registrable
Securities; the Series C Investors whose signatures are set forth on the
signature pages hereto, which Series C Investors constitute a majority of the
outstanding Registrable Securities; B&T; Xxxx Xxxx and Xxxxxxx Xxxx, hereby
consent to amending the Third Agreement in the manner set forth herein.
NOW THEREFORE, in consideration of the mutual agreements, covenants and
conditions contained herein, the Company and each of the Investors hereby agree
as follows:
SECTION 1
RESTRICTIONS ON TRANSFERABILITY; REGISTRATION RIGHTS
1.1 CERTAIN DEFINITIONS.
All capitalized terms used herein and not defined below shall have the
meanings set forth in the Series C Stock Purchase Agreement. The following terms
shall have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
"CONVERSION SHARES" shall mean the Common Stock issued or issuable
upon conversion of the Preferred Stock.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"HOLDER" shall mean Xx. Xxxx, Xx. Xxxx, B&T any Investor holding
Registrable Securities and any person holding Registrable Securities to whom the
rights under this Agreement have been transferred in accordance with Section
1.13 hereof.
2
6
"INITIATING HOLDERS" shall mean any Investors or transferees of
any Investors under Section 1.13 hereof who in the aggregate are Holders of not
less than twenty percent (20%) of the Registrable Securities; provided, that Xx.
Xxxx or Xx. Xxxx shall be Initiating Holders for purposes of Section 1.7 without
regard to the percentage of Registrable Securities held by them, and provided,
that AOL shall be an Initiating Holder for purposes of Sections 1.5 and 1.7
without regard to the percentage of Registrable Securities held by AOL.
"REGISTER", "REGISTERED" and "REGISTRATION" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in complying with Sections 1.5 and 1.6 hereof, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, all fees and disbursements of one counsel for the Holders (as
limited by Section 1.8), and the expense of any special audits incident to or
required by any such registration (but excluding the compensation of regular
employees of the Company which shall be paid in any event by the Company).
"REGISTRABLE SECURITIES" shall mean (i) the Conversion Shares; and
(ii) any Common Stock of the Company issued or issuable in respect of the Shares
or Conversion Shares or other securities issued or issuable with respect to the
Shares or Conversion Shares upon any stock split, stock dividend,
recapitalization, or similar event, or any Common Stock otherwise issued or
issuable with respect to the Shares or Conversion Shares; (iii) the shares of
Common Stock purchased by B&T pursuant to that certain Stock Purchase Agreement
and Warrant, each dated July 10, 1998; (iv) the shares of Common Stock held by
Xx. Xxxx and Xx. Xxxx; and (v) the shares of Common Stock purchased by AOL
pursuant to the Warrant, provided, however, that shares of 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 Rule 144 so that all transfer restrictions and
restrictive legends with respect thereto are removed upon the consummation of
such sale
"RESTRICTED SECURITIES" shall mean the securities of the Company
required to bear the legend referred to by the Securities Act as set forth in
Section 1.3 hereof.
"RULE 144" means Rule 144 promulgated under the Securities Act.
"RULE 145" means Rule 145 promulgated under the Securities Act.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holders and, except as set forth under "Registration Expenses," all fees and
disbursements of counsel for any Holder.
3
7
"SHARES" shall mean the shares of Series A Preferred sold pursuant
to the Series A Convertible Preferred Stock Purchase Agreement, dated August 6,
1998, the shares of Series B Preferred sold pursuant to the Series B Convertible
Stock Purchase Agreement dated February 25, 1999, the shares of Series C
Preferred sold pursuant to the Series C Stock Purchase Agreement, the shares of
Common Stock purchased by B&T pursuant to that certain Stock Purchase Agreement
and Warrant, each dated July 10, 1998, and the shares of Common Stock purchased
by AOL pursuant to the Warrant dated December 22, 1999.
1.2 RESTRICTIONS.
The Shares and the Conversion Shares shall not be sold, assigned,
transferred or pledged except upon the conditions specified in this Agreement,
which conditions are intended to ensure compliance with the provisions of the
Securities Act. Each Investor will cause any proposed purchaser, assignee,
transferee or pledgee of the Shares and the Conversion Shares to agree to take
and hold such securities subject to the provisions and upon the conditions
specified in this Agreement.
1.3 RESTRICTIVE LEGEND.
Each certificate representing (i) the Shares, (ii) the Conversion Shares,
and (iv) any other securities issued in respect of the securities referenced in
clauses (i) and (ii) upon any stock split, stock dividend, recapitalization,
merger, consolidation or similar event, shall (unless otherwise permitted by the
provisions of Section 1.4 below) be stamped or otherwise imprinted with legends
in the following form (in addition to any legend required under applicable state
securities laws):
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR
PLEDGED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH SALE OR
TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SAID ACT. THE COMPANY MAY REASONABLY REQUEST AN
OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY) STATING
THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT."
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED
ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY."
4
8
Each Investor and Holder consents to the Company making a notation
on its records and giving instructions to any transfer agent of the Restricted
Securities in order to implement the restrictions on transfer established in
this Section 1.
1.4 NOTICE OF PROPOSED TRANSFERS.
The holder of each certificate representing Restricted Securities, by
acceptance thereof, agrees to comply in all respects with the provisions of this
Section 1. Prior to any proposed sale, assignment, transfer or pledge of any
Restricted Securities, unless there is in effect a registration statement under
the Securities Act covering the proposed transfer, the holder thereof shall give
written notice to the Company of such holder's intention to effect such
transfer, sale, assignment or pledge. Each such notice shall describe the manner
and circumstances of the proposed transfer, sale, assignment or pledge in
sufficient detail, and shall be accompanied at such holder's expense by either
(i) an unqualified written opinion of legal counsel who shall be, and whose
legal opinion shall be, reasonably satisfactory to the Company, addressed to the
Company, to the effect that the proposed transfer of the Restricted Securities
may be effected without registration under the Securities Act, (ii) a "no
action" letter from the Commission to the effect that the transfer of such
securities without registration will not result in a recommendation by the staff
of the Commission that action be taken with respect thereto, or (iii) any other
evidence reasonably satisfactory to counsel to the Company, whereupon the holder
of such Restricted Securities shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered by the holder to
the Company. The Company will not require such a legal opinion or "no action"
letter (a) in any transaction in compliance with Rule 144, (b) in any
transaction in which an Investor which is a corporation distributes Restricted
Securities solely to its majority-owned subsidiaries, affiliates or stockholders
for no consideration, or (c) in any transaction in which an Investor which is a
partnership or a limited liability company distributes Restricted Securities
solely to partners, members or other equity holders thereof for no
consideration; provided that each transferee agrees in writing to be subject to
the terms of this Section 1.4. Each certificate evidencing the Restricted
Securities transferred as above provided shall bear, except if such transfer is
made pursuant to Rule 144, the appropriate restrictive legends referring to the
Securities Act set forth in Section 1.3 above, except that such certificate
shall not bear such restrictive legend if, in the opinion of counsel for such
holder and the Company, such legend is not required in order to establish
compliance with any provisions of the Securities Act.
1.5 REQUESTED REGISTRATION.
(a) Request for Registration. In case the Company shall receive
from Initiating Holders a written request that the Company effect any
registration, qualification or compliance with respect to the Registrable
Securities, the reasonably anticipated aggregate offering price of which exceeds
five million dollars ($5,000,000), the Company will:
(i) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(ii) as soon as practicable, use its best efforts to
effect such registration, qualification or compliance (including, without
limitation, the execution of an
5
9
undertaking to file post-effective amendments, appropriate qualification under
applicable blue sky or other state securities laws and appropriate compliance
with applicable regulations issued under the Securities Act and any other
governmental requirements or regulations) as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any Holder or Holders joining in
such request as are specified in a written request received by the Company
within thirty (30) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to take any action to
effect any such registration, qualification or compliance pursuant to this
Section 1.5:
(1) In any particular jurisdiction in which the
Company would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(2) Prior to the earlier of (i) six (6) months
following the closing date of the first public offering of the Company's
securities to the general public which is effected pursuant to a registration
statement filed with, and declared effective by, the Commission under the
Securities Act (the "Initial Public Offering") or (ii) August 6, 2001;
(3) Prior to ninety (90) days following the closing
date of the Company's Initial Public Offering;
(4) If the Company delivers notice to the Holders
within thirty (30) days of such request that the Company intends to file a
registration statement for the Company's Initial Public Offering within ninety
(90) days;
(5) (a) After the Company has effected two (2) such
registrations pursuant to this Section 1.5(a) with respect to rights held
hereunder by the Series A Investors, (b) after the Company has effected two (2)
such registrations pursuant to this Section 1.5(a) with respect to rights held
hereunder by the Series B Investors, (c) after the Company has effected two (2)
such registrations pursuant to this Section 1.5(a) with respect to rights held
hereunder by the Series C Investors, and (d) after the Company has effected two
(2) such registrations pursuant to this Section 1.5(a) with respect to rights
held hereunder by AOL, provided that, notwithstanding any provision hereof to
the contrary, AOL shall not initiate more than one (1) registration pursuant to
this Section 1.5(a) prior to the first anniversary of the Initial Public
Offering; or
(6) If the Company shall furnish to such Holders a
certificate, signed by the President of the Company, stating that in the good
faith judgment of the Board of Directors it would be detrimental to the Company
or its shareholders for a registration statement to be filed in the near future,
then the Company's obligation to use its best efforts to register, qualify or
comply under this Section 1.5 shall be deferred for a period not to exceed
ninety (90) days from the date of receipt of written request from the Initiating
Holders; provided, however, that the Company may not utilize this right more
than once in any twelve (12) month period.
6
10
Subject to the foregoing clauses (1) through (6), the Company shall file
a registration statement covering the Registrable Securities so requested to be
registered as soon as practicable after receipt of the request or requests of
the Initiating Holders.
(b) Underwriting. If a registration pursuant to Section 1.5 is for
a registered public offering involving an underwriting, the Company shall so
advise the Holders as part of the notice given pursuant to Section 1.5(a)(i).
The right of any Holder to registration pursuant to Section 1.5 shall be
conditioned upon such Holder's participation in the underwriting arrangements
required by this Section 1.5 and the inclusion of such Holder's Registrable
Securities in the underwriting, to the extent requested, to the extent provided
herein.
The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter selected for such underwriting
by a majority in interest of the Initiating Holders (which managing underwriter
shall be reasonably acceptable to the Company). Notwithstanding any other
provision of this Section 1.5, if the managing underwriter advises the
Initiating Holders in writing that marketing factors require a limitation of the
number of shares to be underwritten, then the Company shall so advise all
Holders of Registrable Securities and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated first among all Holders thereof other than Xx. Xxxx and Xx. Xxxx in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by such Holders at the time of filing the registration statement
and then, to the extent any Registrable Securities may be included that are held
by Xx. Xxxx and Xx. Xxxx, in proportion to the amounts held by them; provided,
however, that with respect to any public offering following the Initial Public
Offering, the number of shares allocated among all Holders (including Xx. Xxxx
and Xx. Xxxx) shall not be less than thirty percent (30%) of the number of
shares to be sold in such public offering. No Registrable Securities excluded
from the underwriting by reason of the underwriter's marketing limitation shall
be included in such registration. To facilitate the allocation of shares in
accordance with the above provisions, the Company or the underwriters may round
the number of shares allocated to any Holder to the nearest one hundred (100)
shares.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, the managing underwriter and the Initiating Holders. The
Registrable Securities and/or other securities so withdrawn shall also be
withdrawn from registration.
1.6 COMPANY REGISTRATION.
(a) Notice of Registration. If at any time or from time to time,
the Company shall determine to register any of its securities, either for its
own account or the account of a security holder or holders other than (i) the
Company's Initial Public Offering, (ii) a registration relating solely to
employee benefit plans, or (iii) a registration relating solely to a transaction
subject to Rule 145, the Company will:
(i) promptly give to each Holder written notice thereof;
and
7
11
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests made within thirty (30) days after receipt of such written notice
from the Company by any Holder.
(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 1.6(a)(i). In such event, the right of any Holder to
registration pursuant to Section 1.6 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and the other holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting by the Company (or by the
Holders who have demanded such registration). Notwithstanding any other
provision of this Section 1.6, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the number of Registrable
Securities to be included in the registration and underwriting, on a pro rata
basis based on the total number of securities (including, without limitation,
Registrable Securities) entitled to registration pursuant to registration rights
granted to the participating Holders other than Xx. Xxxx and Xx. Xxxx by the
Company at the time of the filing of the registration statement and then, to the
extent any Registrable Securities may be included that are held by Xx. Xxxx and
Xx. Xxxx, in proportion to the amounts held by them; provided, however, that (i)
in no event shall any shares being sold by a shareholder exercising a demand
registration right either pursuant to or substantially the same as that granted
in Section 1.5 hereof be excluded from the offering, except as provided in
Section 1.5(b), and (ii) that with respect to any public offering following the
Initial Public Offering, the number of shares allocated among all Holders of
Registrable Securities exercising its rights under this Section 1.6 shall not be
less than thirty percent (30%) of the number of shares to be sold in such public
offering. To facilitate the allocation of shares in accordance with the above
provisions, the Company or the underwriters may round the number of shares
allocated to any Holder or other holder to the nearest one hundred (100) shares.
If any Holder or other holder disapproves of the terms of any such underwriting,
he or she may elect to withdraw therefrom by written notice to the Company and
the managing underwriter. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
(c) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 1.6 prior to the effectiveness of such registration, whether or not any
Holder has elected to include securities in such registration.
1.7 REGISTRATION ON FORM S-3.
In addition to the rights set forth in Section 1.5, if the Initiating
Holders request that the Company file a registration statement on Form S-3 (or
any successor thereto) for a public offering of shares of Registrable Securities
the reasonable anticipated aggregate price to the public of which would exceed
one million dollars ($1,000,000), and the Company is a registrant
8
12
entitled to use Form S-3 to register securities for such offering, the Company
shall use its best efforts to cause such shares to be registered for the
offering on such form (or any successor thereto). The Company shall not be
obligated to file (i) more than four (4) registration statements under this
Section 1.7 in any consecutive twelve (12) month period.
1.8 EXPENSES OF REGISTRATION.
All Registration Expenses incurred in connection with demand
registrations pursuant to Section 1.5, all Company registrations pursuant to
Section 1.6, and all registrations on Form S-3 pursuant to Section 1.7 shall be
borne by the Company, provided that the Company shall not be required to pay the
Registration Expenses of any registration proceeding begun pursuant to Section
1.5, the request of which has been subsequently withdrawn by the Initiating
Holders. In such case, (i) the Holders of Registrable Securities to have been
registered shall bear all such Registration Expenses pro rata on the basis of
the number of shares to have been registered, and (ii) the Company shall be
deemed not to have effected a registration pursuant to subparagraph 1.5(a) of
this Agreement. Notwithstanding the foregoing, however, if at the time of the
withdrawal, the Holders have learned of a material adverse change in the
condition, business or prospects of the Company from that known to the Holders
at the time of their request, of which the Company had knowledge at the time of
the request, then the Holders shall not be required to pay any of said
Registration Expenses. In such case, the Company shall be deemed not to have
effected a registration pursuant to subparagraph 1.5(a) of this Agreement.
Unless otherwise stated, all Selling Expenses relating to securities registered
on behalf of the Holders and all other registration expenses incurred in
connection with any registration pursuant to this Section 1 shall be borne by
the Holders of the registered securities included in such registration pro rata
on the basis of the number of shares so registered.
1.9 REGISTRATION PROCEDURES.
In the case of each registration, qualification or compliance effected by
the Company pursuant to this Section 1, the Company will keep each Holder
advised in writing as to the initiation of each registration, qualification and
compliance and as to the completion thereof. At its expense the Company will:
(a) Prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for at least one hundred
eighty (180) days or until the distribution described in the registration
statement has been completed;
(b) Furnish to the Holders participating in such registration and
to the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities;
(c) Use its best efforts to register and qualify the securities
covered by the 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
9
13
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;
(d) In the event of any underwritten public offering, enter into
and perform all 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;
(e) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statement therein not misleading in light of the circumstances then existing;
and, at the request of such Holder, prepare and furnish to such Holder a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the offerees
of such shares, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing;
(f) Notify each Holder promptly (i) of the receipt by the Company
of any notification with respect to any comments by the Commission with respect
to such registration statement or prospectus or any amendment or supplement
thereto or any request by the Commission for the amending or supplementing
thereof or for additional information with respect thereto, (ii) of the receipt
by the Company of any notification with respect to the issuance by the
Commission of any stop order suspending the effectiveness of such registration
statement or prospectus or any amendment or supplement thereto or the initiation
or threatening of any proceeding for that purpose and (iii) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of such Registrable Securities, for sale in any jurisdiction or
the initiation or threatening of any proceeding for such purposes;
(g) Use its best efforts to cause such Registrable Securities to
be registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of the
Company to enable the seller or sellers thereof to consummate the disposition of
such Registrable Securities;
(h) Use its best efforts to obtain from its independent certified
public accountants "comfort" letters in customary form and at customary times
and covering matters of the type customarily covered by comfort letters;
(i) Use its best efforts to obtain from its counsel an opinion or
opinions in customary form;
(j) Provide a transfer agent and registrar (which may be the same
entity and which may be the Company) for such Registrable Securities; and
(k) Issue to any underwriter to which any Holder of Registrable
Securities may sell shares in such offering certificates evidencing such
Registrable Securities;
10
14
1.10 INDEMNIFICATION.
(a) The Company will indemnify each Holder of Registrable
Securities included in a registration pursuant to this Agreement, each of its
officers directors and partners, and each person controlling such Holder within
the meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any 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 any violation by the Company of the
Securities Act, the Exchange Act, state securities laws or any rule or
regulation promulgated under such laws applicable to the Company in connection
with any such registration, qualification or compliance, and the Company will
reimburse each such Holder, each of its officers and directors, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, as such expenses are incurred, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission or alleged untrue statement or omission, made in reliance
upon and in conformity with written information furnished to the Company by an
instrument duly executed by any Holder, controlling person or underwriter and
stated to be specifically for use therein.
(b) Each Holder, severally and not jointly, will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors and officers, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers, directors and
partners and each person controlling such Holder within the meaning of Section
15 of the Securities Act, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company, such Holders, such directors, officers, partners,
persons, underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability or action, as such expenses are incurred, in each
case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder and stated to be
specifically for use therein.
11
15
Notwithstanding the foregoing, the liability of each Holder under this Section
1.10(b) shall be limited to an amount equal to the net proceeds of the shares
sold by such Holder.
(c) Each party entitled to indemnification under this Section 1.10
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense; provided, however, that an Indemnified Party (together with all
other Indemnified Parties which may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the fees and
expenses to be paid by the Indemnifying Party, if representation of such
Indemnified Party by the counsel retained by the Indemnifying Party would be
inappropriate due to actual or potential differing interests between such
Indemnified Party and any other party represented by such counsel in such
proceeding. The failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Section 1.10 unless the failure to give such notice is materially prejudicial to
an Indemnifying Party's ability to defend such action. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
(d) If the indemnification provided for in this Section is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, claim, damage, liability or action referred to herein, then
the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amounts paid or payable by such indemnified
party as a result of such loss, claim, damage, liability or action 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 which resulted in such loss, claim, damage or
liability as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged 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.
The Company and the Holders of Registrable Securities agree that it would not be
just and equitable if contributions pursuant to this paragraph were determined
by pro rata allocation or by any other method of allocation which did not take
into account the equitable considerations referred to herein. The amount paid or
payable to an indemnified party as a result of the losses, claims, damages,
liabilities or expenses referred to above shall be deemed to include, subject to
the limitation set forth in this Section (h)(iv), any legal or other expenses
reasonably incurred in connection with investigating or defending the same.
Notwithstanding the foregoing, in no event shall the amount contributed by a
Holder of
12
16
Registrable Securities exceed the aggregate net offering proceeds received by
such Holder from the sale of such Holder's Registrable Securities.
1.11 INFORMATION BY HOLDER.
The Holder or Holders of Registrable Securities included in any
registration shall furnish to the Company such information regarding such Holder
or Holders, the Registrable Securities held by them and the distribution
proposed by such Holder or Holders as the Company may request in writing and as
shall be required in connection with any registration, qualification or
compliance referred to in this Section 1.
1.12 RULE 144 REPORTING.
With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of the
Restricted Securities to the public without registration, after such time as a
public market exists for the Common Stock of the Company, the Company agrees to
use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144, at all times after the effective date that
the Company becomes subject to the reporting requirements of the Securities Act
or the Exchange Act;
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements); and
(c) So long as an Investor owns any Restricted Securities, to
furnish to each Investor forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after ninety (90) days after the effective date of the first
registration statement filed by the Company for an offering of its securities to
the general public), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company and other information in the possession of or
reasonably obtainable by the Company as an Investor may reasonably request in
availing itself of any rule or regulation of the Commission allowing an Investor
to sell any such securities without registration.
1.13 TRANSFER OF REGISTRATION RIGHTS.
The rights to cause the Company to register securities granted Investors
under Sections 1.5, 1.6 and 1.7 may be assigned to a transferee or assignee
reasonably acceptable (unreasonable transferees or assignees would include, but
not be limited to, competitors or potential competitors of the Company as
determined by the Board of Directors prior to transfer) to the Company in
connection with any transfer or assignment of Registrable Securities by an
Investor (together with any affiliate); provided that (a) such transfer may
otherwise be effected in accordance with applicable securities laws, (b) notice
of such assignment is given to the
13
17
Company, (c) such transferee or assignee covenants to be bound by the
registration rights provisions in this Agreement, and (d) such transferee or
assignee (i) is a wholly-owned subsidiary, affiliate, or constituent partner
(including limited partners, retired partners, spouses and ancestors, lineal
descendants and siblings of such partners or spouses who acquire Registrable
Securities by gift, will or intestate succession) of such Investor, (ii) is any
family member or trust for the benefit of Xx. Xxxx, Xx. Xxxx or any individual
Investor, or (iii) acquires from Xx. Xxxx, Xx. Xxxx or such Investor at least
fifty thousand (50,000) shares of Restricted Securities (as appropriately
adjusted for stock splits and the like).
1.14 STANDOFF AGREEMENT.
Each Holder holding more than one percent (1 %) of the Company's Common
Stock on a fully-diluted basis agrees in connection with the Initial Public
Offering and the first public offering of the Company's securities thereafter
(other than a registration of securities in a transaction subject to Rule 145 or
with respect to an employee benefit plan) that, upon request of the Company or
the underwriters managing any underwritten offering of the Company's securities,
not to sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any Registrable Securities (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 one
hundred eighty (180) days from the effective date of such registration) as may
be requested by the Company or such managing underwriters; provided, that (i)
the officers and directors of the Company also agree to such restrictions, and
(ii) the holders of the Company's securities with registration rights similar to
those granted in Sections 1.5, 1.6 and 1.7 herein also agree to, or are bound
by, such restrictions.
1.15 TERMINATION OF RIGHTS.
The rights of any particular Holder to cause the Company to register
securities under Sections 1.5, 1.6 and 1.7 shall terminate with respect to such
Holder on the fifth year anniversary of the effective date of the Company's
Initial Public Offering.
1.16 OTHER REGISTRATION RIGHTS.
The Company shall not grant any registration rights to any existing or
future holder of equity securities of the Company, or securities convertible
into Common Stock of the Company, which rights are more favorable than the
registration rights granted to the Investors.
14
18
SECTION 2
RIGHT OF FIRST OFFER AND ELECTION OF DIRECTORS
2.1 INVESTORS' RIGHT OF FIRST OFFER.
(a) Right of First Offer. Subject to the terms and conditions
contained in this Section 2.1, the Company hereby grants to each Investor the
right of first offer to purchase its Pro Rata Portion of any New Securities (as
defined in subsection 2.1(b)) which the Company may, from time to time, propose
to sell and issue. An Investor's "Pro Rata Portion" for purposes of this Section
2.1 is the ratio that (x) the sum of the number of shares of the Company's
Common Stock then held by such Investor and the number of shares of the
Company's Common Stock issuable upon conversion of the Preferred Stock then held
by such Investor bears to (y) the sum of the total number of shares of Company's
Common Stock then outstanding and the number of shares of the Company's Common
Stock issuable upon conversion of the then outstanding securities exercisable
for or convertible into, directly or indirectly, shares of Common Stock.
(b) Definition of New Securities. Except as set forth below, "New
Securities" shall mean any shares of capital stock of the Company, including
Common Stock and Preferred Stock, whether authorized or not, and rights, options
or warrants to purchase said shares of Common Stock or Preferred Stock, and
securities of any type whatsoever that are, or may become, convertible into said
shares of Common Stock or Preferred Stock. Notwithstanding the foregoing, "New
Securities" does not include (i) the Shares or the Conversion Shares, (ii)
securities offered to the public generally pursuant to a registration statement
under the Securities Act, (iii) securities issued pursuant to the acquisition of
another corporation by the Company by merger, purchase of substantially all of
the assets or shares or other reorganization whereby the Company or its
shareholders own not less than a majority of the voting power of the surviving
or successor corporation, (iv) any shares of the Company's Common Stock or
related options convertible into or exercisable for such Common Stock issued to
employees, officers and directors of, and consultants to, the Company, pursuant
to any arrangement approved by the Board of Directors of the Company including
the members of the Board of Directors appointed by the Series B Investors and
Series C Investors, (v) shares of the Company's Common Stock or related options
convertible into or exercisable for such Common Stock issued to any bank,
equipment lessor or other similar financial institution if and to the extent
that the transaction in which such sale or grant is to be made is unanimously
approved by the Company's Board of Directors, (vi) shares of the capital stock
of the Company issued pursuant to any existing rights or agreements that have
been disclosed to the Investors, including, without limitation, convertible
securities, options and warrants, provided that the Company shall have complied
with the right of first offer established by this Section 2.1 with respect to
the initial sale or grant by the Company of such rights or agreements, (vii)
stock issued in connection with any stock split, stock dividend or
recapitalization by the Company; or (viii) the shares of Common Stock purchased
by AOL pursuant to the Warrant dated December 22, 1999; provided however, that
shares of the Company's Common Stock issued pursuant to (iv) shall not, in the
aggregate, exceed 2,030,836 shares of Common Stock, or such other number of
shares of Common Stock as the Board of Directors shall, in its sole discretion,
from time to time approve as being issuable pursuant to the Company's Stock
Option Plans in accordance with Section 3.12.
15
19
(c) Notice of Right. In the event the Company proposes to
undertake an issuance of New Securities, it shall give each Investor written
notice of its intention, describing the type of New Securities and the price and
terms upon which the Company proposes to issue the same. Each Investor shall
have fifteen (15) days from the date of receipt of any such notice to agree to
purchase shares of such New Securities (up to the amount referred to in
subsection 2.1 (a)), for the price and upon the terms specified in the notice,
by giving written notice to the Company and stating therein the quantity of New
Securities to be purchased. If any Investor fails to agree to purchase its full
Pro Rata Portion within such fifteen (15) day period, the Company will give the
Investors that did so agree (the "Electing Investors") notice of the number of
shares which were not subscribed for by the non-electing Investors. Such notice
may be by telephone if followed by written confirmation within two (2) days. The
Electing Investors shall have ten (10) business days from the date of such
notice to agree to purchase their Pro Rata Portion of all of the New Securities
not purchased by such non-electing Purchasers.
(d) Exercise of Right. If any Investor exercises its right of
first offer hereunder, the closing of the purchase of the New Securities with
respect to which such right has been exercised shall take place within ninety
(90) calendar days after each Investor gives notice of such exercise, which
period of time shall be extended in order to comply with applicable laws and
regulations. Upon exercise of such right of first offer, the Company and such
Investor shall be legally obligated to consummate the purchase contemplated
thereby and shall use their best efforts to secure any approvals required in
connection therewith.
(e) Lapse and Reinstatement of Right. In the event an Investor
fails to exercise the right of first offer provided in this Section 2.1 within
said fifteen (15) day period, the Company shall have ninety (90) days thereafter
to sell or enter into an agreement (pursuant to which the sale of New Securities
covered thereby shall be closed, if at all, within sixty (60) days from the date
of said agreement) to sell the New Securities not elected to be purchased by
such Investor at the price and upon the terms no more favorable to the
purchasers of such securities than specified in the Company's notice. In the
event the Company has not sold the New Securities or entered into an agreement
to sell the New Securities within said ninety (90) day period (or sold and
issued New Securities in accordance with the foregoing within sixty (60) days
from the date of said agreement), the Company shall not thereafter issue or sell
any New Securities without first offering such securities to each Investor in
the manner provided above.
(f) Assignment. The right of each Investor to purchase any part of
the New Securities may be assigned in whole or in part to any partner,
subsidiary, affiliate or shareholder of an Investor, or other persons or
organizations who acquire at least one hundred thousand (100,000) shares of
Restricted Securities (as adjusted for stock splits and the like).
2.2 ELECTION OF DIRECTORS. The Holders shall vote their respective
shares of the Company's capital stock in favor of the nominees to the Company's
Board of Directors who are nominated as follows:
(i) for as long as at least 100,000 shares of Series A
Preferred are outstanding, the holders of at least one-half (50%) the Series A
Preferred then outstanding shall be entitled to nominate one (i) representative
to be elected as a member of the Company's Board of Directors;
16
20
(ii) for as long as at least 200,000 shares of Series B
Preferred are outstanding, FBR Technology Venture Partners I, LP shall be
entitled to nominate one (1) representative to be elected as a member of the
Company's Board of Directors and Xxxxxxxx Fund, LP shall be entitled to nominate
one (1) representative to be elected as a member of the Company's Board of
Directors;
(iii) for as long as B & T holds at least 500,000 shares of
Common Stock, B & T shall have the right to nominate one (1) representative to
be elected as a member of the Company's Board of Directors;
(iv) for as long as at least 900,000 shares of Series C are
outstanding (as adjusted for stock splits, combinations, dividends or similar
recapitalizations) shall remain outstanding, Tribune Company shall be entitled
to nominate one (1) representative;
(v) for so long as Xxxx X. Xxxx continues in the employ of the
Company or holds at least 100,000 shares of Common Stock, Xxxx X. Xxxx shall be
entitled to nominate a member of the Company's Board of Directors;
(vi) for so long as Xxxxxxx X. Xxxx continues in the employ or
the Company or holds at least 100,000 shares of Common Stock, Xxxxxxx X. Xxxx
shall be entitled to nominate a member of the Company's Board of Directors; and
(vii) any representatives to be elected as a member of the
Company's Board of Directors to replace any representative due to the failure of
the named parties in paragraphs (i) through (vi) above to continue to meet the
conditions of such respective provisions, shall be mutually agreed upon between
the Company and the holders of two-thirds (66 2/3%) of the then outstanding
Preferred Stock, which approval may be withheld or given in the sole and
absolute discretion of the holders of the Preferred Stock.
(c) In the case of any vacancy (other than a vacancy caused by
removal) in the office of a director occurring among the directors elected by
holder(s) of stock pursuant to this Section 2.2, the remaining directors so
elected by such holder(s) may by affirmative vote of at least one-half (50%)
thereof (or the remaining director so elected if there be but one and, if there
are no such directors remaining, by the holder(s) who has the right to designate
such director as described in this Section 2.2, if such holder(s) has the
authority to designate a representative to the Board of Directors or, if no such
particular stockholder has such rights by the affirmative vote of the holders of
a majority of the shares of that class or series), elect successor or successors
to hold office for the unexpired term of the director or directors whose place
or places shall be vacant. Any director who shall have been elected by any
particular holder(s) or by any directors so elected as provided in the
immediately preceding sentence hereof may be removed during the aforesaid term
of office, either with or without cause, by, and only by, the affirmative vote
of the holder(s) of stock entitled to elect such director or directors, given
either at a special meeting of such holder(s) duly called for that purposed or
pursuant to a written consent of stockholders, and any vacancy thereby created
may be filled by the holder(s) of stock represented at the meeting or pursuant
to unanimous written consent.
17
21
2.3 TERMINATION OF RIGHT OF FIRST OFFER AND ELECTION OF DIRECTORS. The
right of first offer granted under Section 2.1 of this Agreement and the
election of directors provision set forth under Section 2.2 of this Agreement
shall terminate immediately prior to and be of no further force or effect on or
after the date of the closing of the Company's first sale of its Common Stock
pursuant to an firm commitment underwritten public offering (a "Qualifying
Public Offering") pursuant to which all outstanding shares of Preferred Stock
are converted, automatically or otherwise, into shares of Common Stock of the
Company.
SECTION 3
AFFIRMATIVE COVENANTS OF THE COMPANY
The Company hereby covenants and agrees as follows:
3.1 FINANCIAL INFORMATION. So long as an Investor is a Holder, the
Company will furnish to such Holder, as soon as practicable after the end of
each fiscal year, but in no event more than ninety (90) days after the end of
such fiscal year, an audited consolidated balance sheet of the Company and
audited consolidated statements of income, shareholders' equity and cash flows
for such year, as well as annual budgets. Additionally, the Company will deliver
to such Holder, as soon as practicable after the end of each calendar quarter,
and calendar month, consolidated balance sheets of the Company and consolidated
statements of income and cash flow for such calendar quarter or calendar month
and for the current fiscal year to date.
3.2 DELIVERY OF INFORMATION. So long as a Series B Investor, Series C
Investor or AOL is a Holder, the Company will furnish to such Holder the same
written information it delivers to its Board of Directors. In addition, the
Company will deliver to a Holder all other information reasonably requested by
such Series B Investor, Series C Investor or AOL. All information hereafter
furnished to such Holder hereunder shall be deemed confidential and shall be
kept in strict confidence by such Holder under appropriate safeguards; provided,
that the foregoing restriction shall not apply to any information which (i) as
shown by written records, was lawfully in the possession of such Holder prior to
any disclosure by the Company, so long as the source of such information was not
bound by a confidentiality agreement with the Company in respect thereof, or
(ii) is generally available to the public other than as a result of disclosure
by such Holder.
3.3 INSPECTION. The Company shall permit each Investor, at such
Investor's expense, to visit and inspect the Company's properties, to examine
its books of account and records and to discuss the Company's affairs, finances
and accounts with its officers, all at such reasonable times as may be requested
by such Investor; provided, however, that the Company shall not be obligated
pursuant to this Section 3.3 to provide access to any information which it
reasonably considers to be a trade secret or similar confidential information.
18
22
3.4 EXPENSES OF THE BOARD OF DIRECTORS. The Company shall pay the
reasonable, preapproved expenses of the members of the Board of Directors,
including airfare and hotel costs, incurred in connection with their service on
the Board of Directors.
3.5 RESERVED EMPLOYEE SHARES. The shares of Common Stock reserved for
employees, officers, of, and consultants to, the Company (the "Employee
Shares"), are to be issued from time to time solely under the Company's 1998
Stock Plan (the "Stock Plan") as may be determined and approved by the Board of
Directors subject to Section 3.12 hereof. Unless otherwise agreed to by the
Board of Directors and subject to Section 3.12 hereof, Employee Shares subject
to options issued under the Stock Plan or other approved plans will vest, until
the option holder's employment with or services to the Company terminate, over a
four year period on an equal monthly basis. The Company shall retain a right of
first refusal, which right shall be freely assignable and, with respect to all
such Employee Shares subject to such options, the holder of such Employee Shares
shall agree to a market standoff provision consistent with the market standoff
provision contained in Section 1.14.
3.6 ACQUISITION OF STOCK. All shares of Preferred Stock held or
acquired by the Investors or by affiliated entities or persons shall be
aggregated together for the purpose of determining the availability of any
rights under this Section 3.
3.7 TITLES AND SALARIES. Titles of Company management shall be agreed
upon by the Board of Directors. All salaries must be reviewed and approved by
the Board of Directors.
3.8 BOARD OF DIRECTORS MEETINGS. The Board of Directors shall meet on
a monthly basis until such time as the unanimous Board of Directors determine
otherwise. The meetings shall be held at the principal office of the Company or
in any other place the directors may determine. If the Chairman is not present
at a meeting of the Board of Directors, the directors present may appoint one of
their number to act as Chairman for the purpose of the meeting. A meeting of
directors may be held by means of any telephone, electronic or other
communications facilities which permit all persons participating in the meeting
to communicate with each other simultaneously and instantaneously, and a
director participating in a meeting by those facilities is deemed to be present
at that meeting.
3.9 IRC SECTION 305. So long as any shares of Preferred Stock remain
outstanding, the Company will not, without approval of holders of a majority of
each series of Preferred Stock then outstanding, do any act or thing which would
result in taxation of the holders of shares of the Preferred Stock under Section
305 of the Internal Revenue Code of 1986, as amended (or any comparable
provision of the Internal Revenue Code as hereafter from time to time amended).
3.10 BOARD OF DIRECTORS.
(a) In any and all elections of directors of the Company (whether
at a meeting or by written consent in lieu of a meeting), all parties hereto
shall vote or cause to be voted all shares of the Company's capital stock then
owned by him or it, or over which he or it has voting control, and otherwise use
his or its respective best efforts, so as to fix the number of directors as set
forth in Section 2.2 of this Agreement and to elect the nominees nominated in
accordance with Section 2.2 of this Agreement.
19
23
(b) The Company shall provide each of the Investors with 30 days'
prior written notice of any intended mailing of a notice to the Investors for a
meeting at which directors are to be elected. The Company agrees to nominate and
recommend for election as directors only the individuals designated pursuant to
Section 2.2 of this Agreement.
3.11 POSITIVE COVENANTS. Subject to Section 3.15, so long as
Registrable Securities are outstanding, the Company will:
(a) promptly pay and discharge, or cause to be paid and
discharged, when due and payable, all lawful taxes, assessments, and
governmental charges or levies imposed upon the income, profits, property, or
business of the Company or any subsidiary; provided, however, that any such tax,
assessment, charge, or levy need not be paid if the validity thereof shall
currently be contested in good faith by appropriate proceedings and if the
Company shall have set aside on its books adequate reserves with respect
thereof, and provided further, that the Company will pay all such taxes,
assessments, charges, or levies forthwith upon the commencement of proceedings
to foreclose any lien that may have attached as security therefor;
(b) keep its properties and those of its subsidiaries in good
repair, working order, and condition, reasonable wear and tear excepted, and
from time to time make all needful and proper repairs, renewals, replacements,
additions, and improvements thereto;
(c) keep its assets and those of its subsidiaries that are of an
insurable character insured by financially sound and reputable insurers against
loss or damage by fire, extended coverage, and explosion insurance in amounts
customary for companies in similar businesses similarly situated; and the
Company will maintain, with financially sound and reputable insurers, insurance
against other hazards, risks, and liabilities to persons and property to the
extent and in the manner customary for companies in similar businesses similarly
situated;
(d) keep true records and books of account in which full, true,
and correct entries will be made of all dealings or transactions in relation to
its business and affairs in accordance with generally accepted accounting
principles applied on a consistent basis;
(e) duly observe and conform to all valid requirements of
governmental authorities relating to the conduct of their businesses or to their
property or assets;
(f) maintain in full force and effect its corporate existence,
rights, and franchises and all licenses and other rights to use patents,
processes, licenses, trademarks, trade names, or copyrights owned or possessed
by it or any subsidiary and deemed by the Company to be necessary to the conduct
of its business;
(g) the Company will retain independent public accountants of
recognized national standing who shall certify the Company's financial
statements at the end of each fiscal year. In the event the services of the
independent public accountants so selected, or any firm of independent public
accountants hereafter employed by the Company are terminated, the Company will
promptly thereafter notify the Investors and will request the firm of
independent public accountants whose services are terminated to deliver to the
Investors a letter from such firm setting forth the reasons for the termination
of their services. In the event of such termination, the Company will promptly
thereafter engage another firm of independent public
20
24
accountants of recognized national standing. In its notice to the Investors the
Company shall state whether the change of accountants was recommended or
approved by the Board of Directors of the Company or any committee thereof;
(h) cause each person now or hereafter employed by it or any
subsidiary with access to confidential information to enter into a proprietary
information and inventions agreement substantially in form acceptable to the
Company and the Investors;
(i) and hold monthly meetings of the Board of Directors.
3.12 NEGATIVE COVENANTS.
(a) Subject to Section 3.15, so long as any shares of Series B
Preferred or Series C Preferred remain outstanding, the Company will not execute
any Major Actions (as hereinafter defined) without the majority vote of the
Board of Directors, which vote must include the affirmative vote of both members
of the Board of Directors nominated by the Series B Investors and the member of
the Board of Directors nominated by Tribune Company, as the case may be. Major
Actions shall be limited to the following:
(i) the issuance of indebtedness for borrowed money in
excess of One Hundred Thousand Dollars ($100,000);
(ii) the sale, conveyance, or other disposition,
including a merger, consolidation or reorganization, of all or substantially all
of the Company's property or business;
(iii) repurchase, redemption or other acquisition of
outstanding shares of the Company's capital stock (other than redemption from
employees in connection with their termination);
(iv) an acquisition by the Company of capital assets for
a consideration in excess of One Hundred Thousand Dollars ($100,000) or other
material expenditures in excess of Two Hundred Thousand Dollars ($200,000) not
included in the annual operating budget;
(v) changes in the list of Major Actions;
(vi) the approval of an annual budget;
(vii) any increase in the number of shares reserved for
issuance under the Company's stock option plans;
(viii) any option granted under the Company's stock option
plan (or shares for which options granted thereunder have been exercised) where
such grant vests at a rate in excess of 25% per annum from the date of issuance;
(ix) the entering into a new line of business not
specified or contemplated in the Business Plan dated July, 1999; and
21
25
(x) any amendment to the Company's Third Amended and
Restated Certificate of Incorporation or Bylaws.
(b) Subject to Section 3.15, the Company shall not enter into any
transaction with any director, officer or affiliated party unless such
transaction is approved by a majority of the disinterested members of the Board
of Directors. A "disinterested" director shall mean any director who does not
have any direct or indirect financial or other interest in a transaction except
for an interest arising as a result of his or her shareholdings in the Company.
3.13 STOCK RESTRICTION AGREEMENTS. The Company will cause each person
now or hereafter employed by the Company or any subsidiary of the Company to
enter into stock restriction and market stand-off agreements substantially in
form acceptable to the Investors.
3.14 OBSERVER RIGHTS. For so long as Carlyle Venture Partners, L.P. or
its affiliates shall be a stockholder, such entities shall be entitled to the
rights specified in the Management Letter dated August 26, 1999, attached to the
Series C Stock Purchase Agreement as Exhibit H.
3.15 TERMINATION OF SECTION 3 RIGHTS. The rights granted under this
Section 3 shall terminate immediately prior to and be of no further force or
effect on or after the date of the closing of the first Qualifying Public
Offering.
SECTION 4
MISCELLANEOUS
4.1 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of Delaware without reference to conflict of laws of
principles.
4.2 THIRD PARTIES. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto, and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
4.3 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by any Investor and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or exhibit delivered by or on
behalf of the Company pursuant hereto shall be deemed to be the representations
and warranties of the Company hereunder as of such date of such certificate or
exhibit.
4.4 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
4.5 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
documents delivered pursuant hereto constitute the full and entire understanding
and agreement among the parties with regard to the subjects hereof and thereof
and supercede any prior discussions, agreements or understandings of the parties
hereto relating to the matters contained herein, including without limitation,
the Equity Investment and Operating Agreement, dated as of July
22
26
10, 1988 (as amended by the First Amendment, dated as of October 9, 1998) by and
between the Company and Xxxxx & Xxxxxx, Inc (in particular, Article 5 thereof),
the Original Agreement, the Second Agreement and the Third Agreement. Neither
this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought;
provided, however, that (i) a majority of the outstanding Registrable Securities
(whether or not converted) held by the Series A Investors and B&T, (ii) a
majority of the outstanding Registrable Securities (whether or not converted)
held by the Series B Investors and (iii) a majority of the outstanding
Registrable Securities (whether or not converted) held by the Series C
Investors, each group voting separately as a class, may waive or amend, on
behalf of the Investors and other holders of Shares, any provisions hereof
benefiting the Investors so long as the effect thereof will be that the
Investors and other holders of Shares will be treated equally; provided,
further, that (i) any action that would affect the rights of AOL, Xx. Xxxx or
Xx. Xxxx under this Agreement shall only be effective with their written consent
and (ii) the rights of any series of Preferred Stock, any individual, or any
entity to nominate a director under Section 2.2 shall not be amended without the
consent of such individual or a majority of the holders of such series.
4.6 EFFECT OF AMENDMENT OR WAIVER. Each Investor and its successors
and assigns acknowledge that by the operation of Section 4.5 hereof the Company
and the holders of a majority of the outstanding Registrable Securities held by
the parties specified will have the right and power to diminish or eliminate any
or all rights or increase any or all obligations pursuant to this Agreement.
4.7 RIGHTS OF HOLDERS. Each holder of Registrable Securities shall
have the absolute right to exercise or refrain from exercising any right or
rights that such holder may have by reason of this Agreement, including, without
limitation, the right to consent to the waiver or modification of any obligation
under this Agreement, and such holder shall not incur any liability to any other
holder of any securities of the Company as a result of exercising or refraining
from exercising any such right or rights.
4.8 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
the earlier of (a) when received, (b) upon personal delivery to the party to be
notified, (c) one business day after delivery via facsimile, (d) one day after
being deposited with an overnight courier service or (e) three days after
deposit with the United States Post Office, by registered or certified mail,
postage prepaid, return receipt requested, and addressed (i) if to an Investor,
at such Investor's address set forth on Exhibit A, Exhibit B, or Exhibit C or at
such address as such Investor shall have furnished to the Company in writing, or
(ii) if to any other holder of any Shares, at such address as such holder shall
have furnished the Company in writing, or, until any such holder so furnishes an
address to the Company, then to and at the address of the last holder of such
Shares who has so furnished an address to the Company, or (iii) if to the
Company, at its address set forth on the first page of this Agreement addressed
to the attention of the Corporate Secretary, or at such other address as the
Company shall have furnished to the Investors. If notice is provided by mail,
notice shall be deemed to be given upon proper deposit with the United States
mail.
23
27
4.9 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any holder of any Shares upon any breach or default
of the Company under this Agreement shall impair any such right, power or remedy
of such holder, nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence thereof or of any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any holder of any breach or default under this Agreement, or any
waiver on the part of any holder of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing or as provided in this Agreement. All
remedies, either under this Agreement or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.
4.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all parties hereto,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
4.11 SEVERABILITY OF THIS AGREEMENT. If any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement will continue in full force and effect
without said provision and the parties agree to replace such provision with a
valid and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such provisions; provided that no such
severability will be effective against a party if it materially and adversely
changes the economic benefits of this Agreement to such party.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
24
28
IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Investors' Rights Agreement as of the date first above written.
XXXXXXXXXXXX.XXX INC.
By: /s/ XXXX X. XXXX
-----------------------------------
Xxxx X. Xxxx
Chief Executive Officer
25
29
XXXXXX PRIVATE EQUITY INVESTMENTS, LLC
c/o Stone Pine Companies
0000 Xxxxxx Xxxxxx, #000
Xxxxx, XX 00000
By: /s/ XXXXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxxxx X. Xxxxxx
XXXXX PINE XXXXXXXXXXXX.XXX, LLC
0000 Xxxxxx Xxxxxx, #000
Xxxxx, XX 00000
By: /s/ XXXXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Chairman/Manager
30
Xxxx X. XxXxx, Xx.
0000 Xxxx Xxxxx Xxxx.
0xx Xxxxx
Xxxxxx, XX 00000
By:
-------------------------------
Name: Xxxx X. XxXxx, Xx.
XXXXXXX Financial, F.B.O.
Xxxx X. Xxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
By:
-------------------------------
Name:
Title:
FBR TECHNOLOGY VENTURE
PARTNERS I, L.P.
Potomac Tower
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
By FBR Venture Capital Managers, Inc.
By: /s/ XXXX XXXXXXXX
-------------------------------
Name: Xxxx Xxxxxxxx
Title: Managing Director
XXXXXXXX IX
A Delaware Limited Partnership
c/x Xxxxxxxx Fund, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
By: Xxxxxxxx IX Management, L.L.C.
A Delaware Limited Liability Company,
Its General Partner
By: /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Authorized Signatory
31
XXXXXXXX ASSOCIATES FUND IV
c/x Xxxxxxxx Fund, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
A Delaware Limited Partnership
By: Xxxxxxxx IX Management, L.L.C.
A Delaware Limited Liability Company,
Its General Partner
By: /s/ XXXXXX X. XXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Authorized Signatory
Xxxxxxx Xxxxx
000 Xxxxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
By:
------------------------------
Name: Xxxxxxx Xxxxx
Xxxxxx X. Xxxxxxx
8 Coach and Xxxx Xxxx
Xxxxxxxxx, XX 00000
By:
------------------------------
Name: Xxxxxx X. Xxxxxxx
32
XXXXXXX MANAGEMENT TRADING, INC.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
By:
------------------------------
Name:
Title
XXXX IRREVOCABLE TRUST DATED
7/30/98
Xxxxxx Xxxxx, Esq. Trustee
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
By:
------------------------------
Name: Xxxxxx Xxxxx, Esq.
Title: Trustee
Xxxxxx and Blossom Xxxxxxxxx, JTWRS
0000 Xxxxxxxx Xx Xxxxx
Xxxxx, XX 00000
By:
------------------------------
Name: Xxxxxx Xxxxxxxxx
By:
------------------------------
Name: Blossom Xxxxxxxxx
Xxxxxxx X. Xxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
By:
------------------------------
Name: Xxxxxxx X. Xxxx
Xxxx X. Xxxx
0000 Xxxxxx Xxxxxx, X.X., Xxx. 0000
Xxxxxxxxxx, X.X. 00000
By: /s/ XXXX X. XXXX
------------------------------
Name: Xxxx X. Xxxx
33
Xxxxx and Xxxxx Xxxx, JTWRS
0000 Xxxxxxxx Xx Xxxxx
Xxxxx, XX 00000
By:
------------------------------
Name: Xxxxx Xxxx
By:
------------------------------
Name: Xxxxx Xxxx
Xxxxx Xxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
By: /s/ XXXXX XXXX
------------------------------
Name: Xxxxx Xxxx
Xxxxxxx X. Xxxx
0000 Xxxxxx Xxxxxx, X.X., Xxx. 000
Xxxxxxxxxx, X.X. 00000
By: /s/ XXXXXXX X. XXXX
------------------------------
Name: Xxxxxxx X. Xxxx
Xxxxx Xxxxxxx
0000 Xxxx Xxxxxx Xxxx
Xxx Xxxxxxx, XX 00000
By:
------------------------------
Name: Xxxxx Xxxxxxx
Xxxxx Xxxxxxxxx
0000 XX 000xx Xxxxxx
Xxxxx Xxxxx, XX 00000
By:
------------------------------
Name: Xxxxx Xxxxxxxxx
34
Xxxxx X. Xxxxxxxxxxxxx &
Xxxxxx X. Xxxxxxxxxxxxx
0000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
By:
------------------------------
Name: Xxxxx X. Xxxxxxxxxxxxx
By:
------------------------------
Name: Xxxxxx X. Xxxxxxxxxxxxx
Xxxxxxx X. Xxxx
000 Xxx Xxxxx
Xxxxxxx, XX 00000
By:
------------------------------
Name: Xxxxxxx X. Xxxx
Xxxxx X. Xxxx
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxxx, XX 00000
By:
------------------------------
Name: Xxxxx X. Xxxx
Xxxx X. Xxxx
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxxx, XX 00000
By:
------------------------------
Name: Xxxx X. Xxxx
Xxxxxxx X. Xxxx
000 Xxxxxxx Xxxx Xxxx, #0X
Xxx Xxxx, XX 00000
By:
------------------------------
Name: Xxxxxxx X. Xxxx
35
Xxxxxx Xxxx
0000 Xxxxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, X.X. 00000
By:
------------------------------
Name: Xxxxxx Xxxx
Xxxxxx Xxxxx
0000 00xx Xxxxxx, X.X. # 0000
Xxxxxxxxxx, X.X.
By:
------------------------------
Name: Xxxxxx Xxxxx
Xxxxxx Xxxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX
By:
------------------------------
Name: Xxxxxx Xxxxxxxx
XXXXX FAMILY TRUST U/D/T
DATED JANUARY 13, 1998
1950 TASSO
Xxxx Xxxx, XX 00000
Lawrence, NY
By:
------------------------------
Name:
Title: Trustee
36
WS INVESTMENT COMPANY 98B
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
By:
------------------------------
Name:
Title
SDJ CAPITAL, INC.
c/o Xxx Xxxxxxxx
0000 Xxxxxxxx, Xxx. 00X
Xxx Xxxx, XX 00000
By:
------------------------------
Name: Xxx Xxxxxxxx
THE TRIBUNE COMPANY
000 X. Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
By: /s/ XXXXXX XXXXXXXXX
--------------------------------
Name: Xxxxxx Xxxxxxxxx
------------------------------
Title: President/Tribune Ventures
-----------------------------
37
CARLYLE VENTURES PARTNERS, L.P.
By: Its General Partner, TCG Ventures, Ltd.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000 Xxxxx
Xxxxxxxxxx, XX 00000
By: /s/ J. XXXXXXXX XXXXX
------------------------------
J. Xxxxxxxx Xxxxx
Attorney-In-Fact
C/S VENTURE INVESTORS, L.P.
By: Its General Partner, TCG Ventures, Ltd.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000 Xxxxx
Xxxxxxxxxx, XX 00000
By: /s/ J. XXXXXXXX XXXXX
------------------------------
J. Xxxxxxxx Xxxxx
Attorney-In-Fact
CARLYLE U.S. VENTURE PARTNERS, L.P.
By: Its General Partner, TCG Ventures, L.L.C.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000 Xxxxx
Xxxxxxxxxx, XX 00000
By: /s/ J. XXXXXXXX XXXXX
------------------------------
J. Xxxxxxxx Xxxxx
Attorney-In-Fact
CARLYLE VENTURE COINVESTMENT L.L.C.
By: Its Manager TCG Ventures, L.L.C.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000 Xxxxx
Xxxxxxxxxx, XX 00000
By: /s/ J. XXXXXXXX XXXXX
------------------------------
J. Xxxxxxxx Xxxxx
Attorney-In-Fact
38
VARSITY BOOK TRUST
c/x Xxxxxxxx Fund
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
By: /s/ XXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Authorized Signatory
Xxxxx Xxxxxx
c/x Xxxxxxxx Fund
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
------------------------------------
Xxxxx Xxxxxx
SOUTHEASTERN TECHNOLOGY FUND, L.P.
By: Southeastern Capital Company, L.L.C.,
Its General Partner
Attn: Xxxxxxx Xxxx
0000 Xxxxx Xxxxx, Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
By:
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Managing Member
AFFILIATED E-COMMERCE INVESTMENTS, LLC
0000 Xxxxxx Xxxxxx #000
Xxxxx, XX 00000
By: /s/ XXXXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Chairman/Manager
39
FBR TECHNOLOGY VENTURE PARTNERS, I.L.P.
Attn: Potomac Tower
0000 00xx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
By: /s/ XXXX XXXXXXXX
--------------------------------
Name: Xxxx Xxxxxxxx
Title: Managing Director
ROLLINGWOOD CAPITAL PARTNERS L.L.C.
0000 Xxxxxx Xxxxxxxxx
Xxxxx 000
XxXxxx XX 00000
By:
--------------------------------
Name:
Title:
XXXXXX.XXX INVESTMENTS I, L.P.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
By:
--------------------------------
Name:
Title:
XXXXX X. XXXX AND XXXXX XXXX JTWROS
0000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
By:
--------------------------------
Name: Xxxxx X. Xxxx
By:
--------------------------------
Name: Xxxxx Xxxx
Xxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
40
By:
--------------------------------
Name: Xxxxx Xxxxxxxx
Xxxxxxx Xxxxx
000 Xxxxx Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
By:
--------------------------------
Name: Xxxxxxx Xxxxx
Xxxxxx X. Xxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
By: /s/ XXXXXX X. XXXXX
--------------------------------
Name: Xxxxxx X. Xxxxx
B&T Enterprises, L.L.C.
Attn: Xxxxxx Xxxxx
The Carlyle Group
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000 Xxxxx
Xxxxxxxxxx, XX 00000
By: CPLCF I, L.P,
Its Managing Member
By: The Carlyle Group, L.P.,
Its General Partner
By: TWC Virginia, Inc.,
Its General Partner
By: /s/ XXXXXX X. X'XXXXXXX
--------------------------------
Name: Xxxxxx X. X'Xxxxxxx
Title: Executive Vice President
EAGLE ROCK VENTURES, L.P.
41
c/o xxxX.xxx
0 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
By:
--------------------------------
Name:
Title:
Xxxxxx X. Xxxx
c/o xxxX.xxx
0 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
By:
--------------------------------
Name: Xxxxxx O. Xxxx
Xxx Argilages
c/o xxxX.xxx
0 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
By:
--------------------------------
Name: Xxx Argilages
ESHER LIMITED
X.X. Xxx 000
Hemisphere House
00 Xxxxxxxx Xxxxxx
Xx Xxxxxx, Xxxxxx XX0 0XX
Channel Islands
United Kingdom
By:
--------------------------------
Name:
Title:
Xxxxx X. Xxxxxxxx
Xxxxxxxx Companies
0000 XXX Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
By:
--------------------------------
Name: Xxxxx X. Xxxxxxxx
42
America Online, Inc.
00000 XXX Xxx
Xxxxxx, XX 00000-0000
By: /s/ XXXX X. XXXXXX
--------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Xxxxxxxxx XxXxxxxx
c/o Xxxx Xxxxxx
Xxxxx Xxxx Law Firm
0000 Xxxxxxx Xxxxx
Xxxxx, Xxx 00000
By: /s/ XXXXX XxXXXXX
--------------------------------
Name: Xxxxx XxXxxxx, as agent
Xxxxxxxxx XxXxxxx
c/o Xxxx Xxxxxx
Xxxxx Xxxx Law Firm
0000 Xxxxxxx Xxxxx
Xxxxx, Xxx 00000
By: /s/ XXXXX XxXXXXX
--------------------------------
Name: Xxxxx XxXxxxx, as agent
Xxxxx Xxxxxxxx
c/o Xxxx Xxxxxx
Xxxxx Xxxx Law Firm
0000 Xxxxxxx Xxxxx
Xxxxx, Xxx 00000
By: /s/ XXXXX XxXXXXX
--------------------------------
Name: Xxxxx XxXxxxx, as agent
Xxxxxxx Xxxxxx
c/o Xxxx Xxxxxx
Xxxxx Xxxx Law Firm
0000 Xxxxxxx Xxxxx
Xxxxx, Xxx 00000
By: /s/ XXXXX XxXXXXX
--------------------------------
Name: Xxxxx XxXxxxx, as agent
43
CBF Investments LLC
c/o Xxxx Xxxxxx
Xxxxx Xxxx Law Firm
0000 Xxxxxxx Xxxxx
Xxxxx, Xxx 00000
By: /s/ XXXXX XxXXXXX
--------------------------------
Name: Xxxxx XxXxxxx, as agent
Xxx Xxxxxxxx
c/o Xxxx Xxxxxx
Xxxxx Xxxx Law Firm
0000 Xxxxxxx Xxxxx
Xxxxx, Xxx 00000
By: /s/ XXXXX XxXXXXX
--------------------------------
Name: Xxxxx XxXxxxx, as agent
Xxxx Xxxxx
c/o Xxxx Xxxxxx
Xxxxx Xxxx Law Firm
0000 Xxxxxxx Xxxxx
Xxxxx, Xxx 00000
By: /s/ XXXXX XxXXXXX
--------------------------------
Name: Xxxxx XxXxxxx, as agent
Xxxxx Xxxxxx
c/o Xxxx Xxxxxx
Xxxxx Xxxx Law Firm
0000 Xxxxxxx Xxxxx
Xxxxx, Xxx 00000
By: /s/ XXXXX XxXXXXX
--------------------------------
Name: Xxxxx XxXxxxx, as agent
Vantage Communications, Inc.
c/o Xxxx Xxxxxx
Xxxxx Xxxx Law Firm
0000 Xxxxxxx Xxxxx
00
Xxxxx, Xxx 00000
By: /s/ XXXXX XxXXXXX
--------------------------------
Name: Xxxxx XxXxxxx, as agent
Xxxxx Xxxxxxxx
c/o Xxxx Xxxxxx
Xxxxx Xxxx Law Firm
0000 Xxxxxxx Xxxxx
Xxxxx, Xxx 00000
By: /s/ XXXXX XxXXXXX
--------------------------------
Name: Xxxxx XxXxxxx, as agent
MTAC, Inc.
c/o Xxxx Xxxxxx
Xxxxx Xxxx Law Firm
0000 Xxxxxxx Xxxxx
Xxxxx, Xxx 00000
By: /s/ XXXXX XxXXXXX
--------------------------------
Name: Xxxxx XxXxxxx, as agent
Xxxxx Xxxxxxxxx
c/o Xxxx Xxxxxx
Xxxxx Xxxx Law Firm
0000 Xxxxxxx Xxxxx
Xxxxx, Xxx 00000
By: /s/ XXXXX XxXXXXX
--------------------------------
Name: Xxxxx XxXxxxx, as agent
