EXHIBIT 10.19
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
THIS AMENDED AND RESTATED SHAREHOLDERS AGREEMENT (the "Agreement") is
made and entered into as of this 14th day of September, 1999 by and among
XxxXxxxx.xxx, a California corporation (the "Company"); Xxxxxx Xxxxxx and Xxxxx
Xxxxxxxx (together with Xx Xxxxxx, each a "Founder" and collectively, the
"Founders"); Xxxxxxx X.X. Xxxxxxx ("Xxxxxxx"); those purchasers of Series A
Preferred Stock of the Company who are signatories to this Agreement
(collectively, the "Series A Investors"); those purchasers of Series B Preferred
Stock of the Company who are signatories to this Agreement (collectively, the
"Series B Investors"); United Air Lines, Inc., a Delaware corporation
("United"); Covia LLC, a Delaware limited liability company and a wholly owned
subsidiary of United ("Covia"), and those purchasers of Series C Preferred
Stock, Series D3 Preferred Stock and Series E Preferred Stock who are
signatories to this Agreement (collectively, the "Series E Investors" and
together with the Founders, Xxxxxxx, the Series A Investors, the Series B
Investors, United and Covia, the "Investors").
RECITALS
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WHEREAS, the Company, the Founders, the Series A Investors, the Series
B Investors and United possess voting and other rights granted pursuant to that
certain Amended and Restated Shareholders Agreement dated May 10, 1998 by and
between the Company, the Founders, the Series A Investors, the Series B
Investors, United and Covia (the "Prior Agreement") entered into in connection
with that certain Series C Preferred Stock, Warrant and Option Purchase
Agreement dated May 10, 1998 by and between the Company and Covia (the "Series C
Agreement");
WHEREAS, each of the Founders is the owner of that number of shares of
Common Stock of the Company ("Common Stock") set forth opposite such Founder's
name on the Schedule of Shareholders attached hereto as Schedule A (the
"Shares"); ----------
WHEREAS, Xxxxxxx is the owner of that number of shares of Common Stock
set forth opposite his name on the Schedule of Shareholders attached hereto as
Schedule A;
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WHEREAS, the Company sold and issued an aggregate of 3,705,991 shares
of the Series A Preferred Stock of the Company ("Series A Preferred Stock") to
Series A Investors pursuant to the Series A Agreement and each of the Series A
Investors is the owner of that number of shares of Series A Preferred Stock set
forth opposite such Series A Investor's name on the Schedule of Shareholders
attached hereto as Schedule A;
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WHEREAS, the Company sold and issued an aggregate of 3,914,448 shares
of the Series B Preferred Stock of the Company ("Series B Preferred Stock")
pursuant to the Series B Agreement and subsequently granted warrants exercisable
for an aggregate of 391,445 shares of Series B Preferred Stock to the Series B
Investors, and each of the Series B Investors is the owner of that number of
shares of and warrants exercisable for that number of shares of Series B
Preferred Stock set forth opposite such Series B Investor's name on the Schedule
of Shareholders attached hereto as Schedule A;
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--------
[*] = CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
WHEREAS, the Company sold and issued to Covia, subject to the terms of
the Series C Agreement, (i) 4,060,875 shares (together with the securities to be
purchased by Covia pursuant to the Purchase Agreement, as defined below, the
"Covia Shares") of the Series C Preferred Stock of the Company ("Series C
Preferred Stock"), (ii) a warrant (the "Warrant") exercisable for up to 807,698
shares of Series C Preferred Stock, (iii) an option (the "Option") exercisable
for (A) up to 2,473,392 shares of Series C Preferred Stock or (B) a warrant that
is in turn exercisable for up to 2,473,392 shares of Series C Preferred Stock
(the "Option Warrant"), and (iv) an option (the "Series D Option") to purchase
Series D1 Preferred Stock and Series D2 Preferred Stock;
WHEREAS, the Company desires to issue and sell to the Series E
Investors, subject to the terms of the Preferred Stock and Warrant Purchase
Agreement of even date herewith (the "Purchase Agreement"), (i) One (1) share of
its Series D3 Preferred Stock (the "Series D3 Preferred"); (ii) up to One
Million Three Hundred Seventy-Five Thousand Four Hundred Twenty-Three
(1,375,423) shares of its Series C Preferred Stock (the "Series C Preferred");
(iii) up to Five Million Forty-One Thousand Seventy-Six (5,041,076) shares of
its Series E Preferred Stock (the "Series E Preferred"); (iv) warrants
exercisable for up to Two Million One Hundred Sixty Thousand Forty-Six
(2,160,046) shares of Series E Preferred Stock, (v) warrants exercisable for
Three Hundred Seventy-Five Thousand (375,000) shares of Common Stock, and (vi)
warrants exercisable for up to One Million One Hundred Thirty-Six Thousand Eight
Hundred Twenty-One (1,136,821) shares of Series C Preferred Stock (together with
the warrants exercisable for Series E Preferred Stock and the warrants
exercisable for Common Stock, the "Warrants");
WHEREAS, the Company and the Series E Investors intend that the
Series E Investors become a party to this Agreement upon the purchase of the
Series C Preferred Stock, the Series D3 Preferred Stock, the Series E Preferred
Stock and the Warrants at the closing under the Purchase Agreement (the
"Closing");
WHEREAS, in order to induce the Company to sell the Series C Preferred
Stock, the Series D3 Preferred Stock and the Series E Preferred Stock and to
induce the Series E Investors to invest funds in the Company by purchasing the
Series C Preferred Stock, the Series D3 Preferred Stock, Series E Preferred
Stock and the Warrants under the Purchase Agreement, the Founders, the Company,
the Series A Investors, the Series B Investors, United and Covia, desire to
amend and restate all rights granted to them under the Prior Agreement, and to
replace the Prior Agreement in its entirety as set forth herein;
WHEREAS, the Series E Investors and the Company have agreed, pursuant
to the Purchase Agreement, to enter into this Agreement to set forth their
agreement and understandings with respect to the matters set forth herein; and
WHEREAS, the Amended and Restated Articles of Incorporation of the
Company provide that, prior to the conversion of all outstanding shares of
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and
Series E Preferred Stock into Common Stock pursuant to the provisions of Section
5 thereof, at each annual or special meeting called for the purpose of electing
directors of the Company, (i) two (2) members of the Board of Directors shall be
elected by the holders of Series A Preferred Stock, voting as a separate class
(for
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purposes of this Agreement, each a "Series A Board Seat" and collectively the
"Series A Board Seats"); (ii) one (1) member of the Board of Directors shall be
elected by the holders of the Series B Preferred Stock, voting as a separate
class (for purposes of this Agreement, the "Series B Board Seat"); (iii) one (1)
member of the Board of Directors shall be elected by the holders of the Common
Stock, voting as a separate class (for purposes of this Agreement, the "Founder
Board Seat"); (iv) two (2) members of the Board of Directors shall be elected by
the holders of the Common Stock and Preferred Stock, voting together as a single
class (for purposes of this Agreement, each a "Class Board Seat" and
collectively, the "Class Board Seats"); (v) if and for so long as a share of
Series D1 Preferred Stock remains outstanding, one (1) member of the Board shall
be elected by the holder of the Series D1 Preferred Stock, voting as a separate
class (the "Series D1 Board Seat"), provided that if no share of Series D1
Preferred Stock remains outstanding, then one (1) member of the Board of
Directors shall be elected by the holders of the Common Stock, Series A
Preferred Stock and Series B Preferred Stock, voting together as a single class
(for purposes of this Agreement, the "Outside Director Seat"); (vi) if and for
so long as a share of Series D2 Preferred Stock remains outstanding, one (1)
member of the Board shall be elected by the holder of the Series D2 Preferred
Stock (the "Series D2 Board Seat"); and (vii) for so long as a share of Series
D3 Preferred Stock remains outstanding, one (1) member of the Board shall be
elected by the holder of the Series D3 Preferred Stock, voting as a separate
class (for purposes of this Agreement the "Series D3 Board Seat");
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
AGREEMENT
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1. Board of Directors.
------------------
a. At each annual or special meeting of the shareholders of the
Company at which directors are to be elected or in each written consent of the
shareholders of the Company to be obtained in lieu of any such meeting, the
Founders, Xxxxxxx, the Series A Investors, the Series B Investors, United,
Covia, and the Series E Investors (as such terms are defined in Section 14
below, and for purposes of this Agreement, each a "Voting Party" and
collectively, the "Voting Parties"), hereby agree to vote that number of shares
of the capital stock of the Company as to which they have beneficial ownership
as of the time of the record date for such election, that is sufficient to, and
shall take all other actions necessary to, elect and appoint to the Board of
Directors of the Company (the "Board") the following persons: (i) two (2)
members to fill the Series A Board Seats as shall be designated by the consent
of a majority of the shares of Series A Preferred Stock (or shares of Common
Stock acquired upon conversion thereof) held by the Series A Investors; (ii) one
(1) member to fill the Series B Board Seat as shall be designated by the consent
of a majority of the shares of Series B Preferred Stock (or shares of Common
Stock acquired upon conversion thereof) held by the Series B Investors; (iii)
one (1) member to fill the Founder Board Seat as shall be designated by the
consent of a majority of the shares of Common Stock held by the Founders; (iv)
subject to Section 1(k) below and subject to American Express Company or
American Express Travel Related Services, Inc. (collectively, "AmEx") notifying
the Company and the Board that AmEx wishes to fill the Series D3 Board Seat
pursuant to Section 1(l) below, one (1) member to fill the Series D3 Board Seat
as shall be designated by the holder of the share of Series D3 Preferred Stock,
which designee shall
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initially be Xxxxxxxx Linen and thereafter, if at all, an executive officer of
AmEx serving in a business operations capacity and on the Policy and Planning
Committee of American Express Company (or a comparable successor committee); (v)
the person then serving as the duly appointed Chief Executive Officer of the
Company to fill one (1) of the Class Board Seats; (vi) one (1) member to fill
the second Class Board Seat as shall be designated by the consent of a majority
of the shares of Common Stock and Preferred Stock (or shares of Common Stock
acquired upon conversion thereof) held by the Voting Parties, such shares voting
together as one class, not as separate classes or series, and on an as-converted
basis; (vii) subject to Section 1(c) below, one (1) member, designated by Covia,
to fill the Outside Director Seat that is an independent industry representative
or a representative of a strategic partner of the Company that is, for so long
as Covia (and/or a United Related Party) hold(s) at least 2,434,287 shares of
Common Stock Equivalents (as the terms "United Related Party" and "Common Stock
Equivalents" are defined in Section 15(h) below), satisfactory to United and
that is, in any event, designated by the consent of both (A) a majority of the
Common Stock held by the Founders and Xxxxxxx, voting together as a separate
class, and (B) a majority of the Series A Preferred Stock and Series B Preferred
Stock (or shares of Common Stock acquired upon conversion thereof) held by the
Series A Investors and Series B Investors, respectively, voting together as a
separate class; and (viii) subject to Covia exercising the Series D Option, one
(1) member, designated by Covia, to fill the Series D1 Board Seat and one (1)
member, designated by Covia, to fill the Series D2 Board Seat. For purposes of
this Section 1, any determination or designation to be made by the consent of a
majority of the shares of Series A Preferred Stock or Series B Preferred Stock
held by the Series A Investors or Series B Investors, respectively, either by
voting together as a class with other series of Preferred Stock or by voting as
a separate series, shall be made by the consent of Series A Investors or Series
B Investors, as the case may be, holding a majority of the shares of Common
Stock issued or issuable upon conversion of such shares of Series A Preferred
Stock or Series B Preferred Stock, respectively, and any determination or
designation by such majority shall be binding on the remaining Series A
Investors or Series B Investors, respectively. Any determination or designation
to be made by the consent of a majority of the shares of Common Stock held by
the Founders, voting as a separate class, shall be made by the consent of the
Founder or Founders holding a majority of the shares of Common Stock held by all
of the Founders, and any determination or designation by such majority shall be
binding on the remaining Founder or Founders.
b. As of the time of the Initial Closing:
(i) the initial appointees of the Series A Investors under
subsection 1(a)(i) shall be Xxxxxxx X. Xxxxx and Xxxx Xxxxxxxxx;
(ii) the initial appointee of the Series B Investors under
subsection 1(a)(ii) shall be Xxxx X. Xxxxx;
(iii) the initial appointee of the Founders under subsection
1(a)(iii) shall be Xxxxxx Xxxxxx;
(iv) the initial AmEx Board Observer (as defined below) shall
be Xxxxxxxx Linen;
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(v) the Chief Executive Officer of the Company appointed under
subsection 1(a)(v) shall be Xxxx Xxxxx;
(vi) the initial member elected under subsection 1(a)(vi) shall
be Xxxxxxx X.X. Xxxxxxx; and
(vii) the initial member elected under subsection 1(a)(vii)
shall be Xxxxxxx X. Xxxxxxxxx.
c. The terms of subsection (vii) (but not subsections (i) through
(vi)) of Section 1(a) above shall terminate in their entirety and be of no
further force or effect immediately upon the earlier to occur of (i) such time
as Covia purchases Series D1 Preferred Stock or Series D2 Preferred Stock of the
Company by exercising the Series D Option in accordance with the terms and
conditions thereof or (ii) a Section 12(e) Termination Event (as defined in
Section 12(e) below).
d. Any of the directors elected to the Board pursuant to the terms
hereof and serving in such capacities may be removed from the Board in the
manner allowed by law and in accordance with the Company's Articles of
Incorporation and Bylaws and this Agreement, at any time with or without cause
or for any reason or no reason, but with respect to a director designated
pursuant to subsections 1(a)(i) through 1(a)(vii) above, only upon the vote or
written consent of the shareholders entitled to designate such director. Nothing
in this Agreement in any way modifies or terminates the "at will" nature of the
relationship of any director, officer, employee of, or consultant or other
service provider to, the Company.
e. In the event that any director elected to the Board pursuant to
the terms hereof ceases for any reason to serve as a member of the Board, the
Company and each of the Voting Parties agree to take all such action as is
reasonable and necessary within fifteen (15) days thereafter, including the
voting of all shares of capital stock of the Company by each of the Voting
Parties as to which they have beneficial ownership, to cause the election or
appointment of such other substitute person to the Board in accordance with the
agreements set forth in this Section 1. The Company shall promptly give each of
the Voting Parties written notice of any election to or appointment of, or
change in composition of, the Board.
f. Subject to the provisions of Section 2 below, the Company and
each of the Voting Parties agree not to take any actions which would materially
and adversely affect the provisions of this Agreement or the intentions of the
parties with respect to the composition of the Board as herein stated.
g. Notwithstanding the foregoing, all of the provisions of this
Section 1 shall terminate in their entirety and be of no further force or effect
on the date upon which the Company consummates (i) a consolidation or merger of
the Company with or into any other corporation or corporations in which the
shareholders of the Company immediately prior to such transaction(s) own, as a
result of such transaction(s), less than a majority of the voting securities of
the successor or surviving corporation immediately thereafter, or (ii) a sale of
all or substantially all of the assets or business of the Company in one or more
related transactions (such events referred to herein collectively as a "Sale of
the Company").
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h. Notwithstanding the foregoing, upon the earlier to occur of (i)
the date upon which the Company or a parent of the Company consummates a sale of
securities pursuant to a registration statement filed by the Company under the
Securities Act of 1933, as amended (the "Act"), in connection with the firm
commitment underwritten offering of its securities to the general public (an
"Initial Public Offering") or (ii) the date upon which the Company first becomes
subject to the periodic reporting requirements of Section 12(g) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act") (a "Reporting
Company Event"), the following provisions will apply:
(i) Sections 1(a) through 1(e) shall terminate in their
entirety and be of no further force or effect;
(ii) For so long as Covia (and/or a United Related Party)
hold(s) at least 3,651,430 shares of Common Stock Equivalents (as defined in
Section 15(h) below) and has not purchased Series D1 Preferred Stock or Series
D2 Preferred Stock of the Company by exercising the Series D Option in
accordance with the terms and conditions thereof, the Company shall, for each
annual or special meeting of shareholders at which directors are to be elected,
use its best efforts to nominate for election to the Company's Board of
Directors one (1) person that is an independent industry representative or a
representative of a strategic partner of the Company that is satisfactory to
United, provided that the Company receives a written notice setting forth the
name(s) of any such person satisfactory to United, signed by an authorized
officer of United, at least fifteen (15) days prior to the record date set for
any such meeting of shareholders.
(iii) Notwithstanding the foregoing, Section 1(h)(ii) shall
terminate in its entirety and be of no further force or effect immediately upon
the earlier to occur of (A) such time as Covia purchases Series D1 Preferred
Stock or Series D2 Preferred Stock of the Company by exercising the Series D
Option in accordance with the terms and conditions thereof, (B) such time as
Covia (and/or a United Related Party) no longer hold(s) at least 3,651,430
shares of Common Stock Equivalents or (C) a Section 12(e) Termination Event.
i. The director designated under subsection 1(a)(iv) shall be
entitled to serve on the Executive Committee of the Board, if any. The directors
filling the Series D1 Board Seat and the Series D2 Board Seat, if any, shall be
entitled to serve on the Executive Committee of the Board, if any. The director
designated under subsection 1(h)(ii), if any, shall be entitled to serve on the
Executive Committee of the Board, if any.
j. The Company reserves the right to withhold information from the
director designated under subsection 1(a)(iv) and to request such director to
recuse himself or herself from any Board or Committee meeting or portion thereof
upon a request made by a majority of the remainder of the Board, such request
being a reasonable, good faith decision made with due deliberation by such
majority and the basis for which decision has been communicated in writing to
such director and to AmEx prior to the request for recusal.
k. Notwithstanding anything to the contrary herein, the terms of
subsection (iv) (but not subsections (i) through (iii) or subsections (v)
through (vii)) of Section 1(a), Section 1(i) and Section 2(b) shall terminate in
their entirety and be of no further
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force or effect, and the term of office of the director designated under
subsection 1(a)(iv), if any, shall terminate, immediately upon the earlier to
occur of (A) such time as no shares of Series D3 Preferred Stock remain
outstanding, (B) the date that the holder thereof transfers the Series D3
Preferred, except to an AmEx Related Party of the holder (as defined in the
Amended and Restated Articles of Incorporation of the Company), (C) beginning
with the first day of the second financial quarter following the commencement of
sales by American Express Travel Related Services Company, Inc. pursuant to the
Web Services and Travel Agreement between the Company and American Express
Travel Related Services Company, Inc. (the "Commercial Agreement"), on the last
day of any subsequent three consecutive financial quarters during which AmEx's
sales of the Company's products and services pursuant to the Commercial
Agreement to the Global 950 (as defined in the Commercial Agreement) total less
than twenty five percent (25%) in such three consecutive financial quarter
period of AmEx's total sales of on-line products and services similar to those
provided by the Reservation System (as defined in the Commercial Agreement) to
new accounts (i.e. accounts not previously under contract with AmEx for the
provision of on-line products and services similar to those provided by the
Reservation System) within the Global 950, (D) eighteen (18) months following
the closing of the Company's offer and sale of its securities in a firm
commitment underwritten public offering or (E) the date of the consummation of a
Liquidation of the Company, as defined in Article III(B)(3)(c) above. In
addition to (A) through (E), above, the terms of subsection (iv) (but not
subsections (i) through (iii) or subsections (v) through (vii)) of Section 1(a),
Section 1(i) and Section 2(b) shall terminate in their entirety and be of no
further force or effect, and the term of office of the director designated under
subsection 1(a)(iv), if any, shall terminate (i) if and only if the Company
consummates an initial public offering of its securities on or before the later
of (x) December 31, 1999, or (y) the consummation of the next bona fide sale of
securities of the Company to investors in an arms-length transaction with gross
aggregate proceeds to the Company of at least $10,000,000 (in each case the "Pay
to Play Date"), on the date that the holder of the share of Series D3 Preferred
Stock holds a percentage of the Common Stock of the Company (calculated assuming
(1) the conversion of all then-outstanding Preferred Stock into Common Stock,
(2) the issuance of the number of shares of Common Stock issuable upon
conversion of the securities issuable upon exercise of outstanding warrants to
purchase securities of the Corporation held by the holder of the share of Series
D3 Preferred Stock and (3) the issuance of all shares of Common Stock issuable
upon the exercise of all options vested as of such date exercisable for shares
of the Company's Common Stock) equal to less than the difference of (x) the
percentage of the Common Stock of the Company held by the holder of the share of
Series D3 Preferred Stock immediately after the consummation of the IPO minus
(y) 1.0% or (ii) if the Company does not consummate an initial public offering
of its securities on or before the Pay to Play Date, on the date that the holder
of the share of Series D3 Preferred Stock holds a percentage of the Common Stock
of the Company (calculated assuming (1) the conversion of all then-outstanding
Preferred Stock into Common Stock, (2) the issuance of the number of shares of
Common Stock issuable upon conversion of the securities issuable upon exercise
of outstanding warrants to purchase securities of the Corporation held by the
holder of the share of Series D3 Preferred Stock and (3) the issuance of all
shares of Common Stock issuable upon the exercise of all options vested as of
such date exercisable for shares of the Company's Common Stock) equal to less
than the difference of (x) the percentage of the Common Stock of the Company
held by the holder on the AmEx Subsequent Closing Date (as
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defined in the Series D3 and Series E Preferred Stock and Warrant Purchase
Agreement) minus (y) 1.0%.
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l. So long as AmEx holds shares of Series D3 Preferred Stock, AmEx
shall have the right to request the Company and the Board, by written
notification setting forth the identity of the AmEx Board designee, to fill the
Series D3 Board Seat with such designee of AmEx. Upon such notification, the
Company shall use its best efforts to cause the Board to appoint the AmEx
designee to fill the Series D3 Board Seat and the Board shall use its best
efforts effect such appointment.
m. In the event of the automatic conversion of the Series D1, Series
D2 or Series D3 Preferred into Common Stock pursuant to the Amended and Restated
Articles of Incorporation of the Company, the director(s) serving as director(s)
appointed by the holders of such converted Series D1, Series D2 or Series D3
Preferred shall immediately thereafter be treated as directors elected pursuant
to Article III.B.6(b)(ix) of such Amended and Restated Articles of
Incorporation.
2. Board Observers.
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a. United Board Observer.
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(i) For so long as Covia (and/or a United Related Party) hold(s)
at least 3,651,430 shares of Common Stock Equivalents (as defined in Section
15(h) below) and has not purchased Series D1 Preferred Stock or Series D2
Preferred Stock of the Company by exercising the Series D Option in accordance
with the terms and conditions thereof, the Company shall invite United to send
at United's own expense one (1) representative of United (the "United Board
Observer") to attend, in a nonvoting observer capacity, each meeting of its
Board of Directors; provided, however, that United and the United Board Observer
shall agree to hold in confidence and trust and to act in the same fiduciary
manner required of members of the Company's Board of Directors with respect to
all information provided and opportunities disclosed or described in connection
with or at such meetings (collectively, "United Fiduciary Obligations"); and,
provided further, that the Company reserves the right to withhold any
information and to exclude the United Board Observer from any meeting or portion
thereof if the Company reasonably believes access to such information or
attendance at such meeting or portion thereof could adversely affect the
attorney-client privilege between the Company and its counsel. United agrees,
and any United Board Observer will agree, to hold in confidence and trust and
not use or disclose any confidential information provided to or learned by it
thereby, and such obligations and the United Fiduciary Obligations described
above will survive any termination of this Section 2 or this Agreement.
(ii) The rights (but not the obligations) of United under this
Section 2 shall not be assignable and shall terminate as to United and the
United Board Observer and be of no further force or effect immediately upon the
earlier to occur of:
(A) such time as Covia purchases Series D1 Preferred Stock
or Series D2 Preferred Stock of the Company by exercising the Series D Option in
accordance with the terms and conditions thereof;
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(B) the Sale of the Company; or
(C) a Section 12(e) Termination Event.
b. AmEx Board Observer.
-------------------
(i) Subject to Section 1(k) and so long as the Series D3 Board
Seat has not yet been filled with an AmEx Board designee pursuant to Section
1(l), the Company shall invite AmEx to send at AmEx's own expense one (1)
representative of AmEx who shall initially be Xxxxxxxx Linen and thereafter, if
at all, an executive officer of AmEx serving in a business operations capacity
and on the Policy and Planning Committee of American Express Company (or a
comparable successor committee) (the "AmEx Board Observer") to attend, in a
nonvoting observer capacity, each meeting of its Board of Directors; provided,
however, that AmEx and the AmEx Board Observer shall agree to hold in confidence
and trust and to act in the same fiduciary manner required of members of the
Company's Board of Directors with respect to all information provided and
opportunities disclosed or described in connection with or at such meetings
(collectively, "AmEx Fiduciary Obligations"); and, provided further, that the
Company reserves the right to withhold any information and to request such AmEx
Board Observer to recuse himself or herself from any Board or Committee meeting
or portion thereof upon a request made by a majority of the Board, such request
being a reasonable, good faith decision made with due deliberation by such
majority and the basis for which decision has been communicated in writing to
such AmEx Board Observer and to AmEx prior to the request for recusal. AmEx
agrees, and any AmeEx Board Observer will agree, to hold in confidence and trust
and not use or disclose any confidential information provided to or learned by
it thereby, and such obligations and the AmEx Fiduciary Obligations described
above will survive any termination of this Section 2 or this Agreement.
(ii) The rights (but not the obligations) of AmEx under this
Section 2 shall not be assignable and shall terminate as to AmEx and the
AmExBoard Observer and be of no further force or effect immediately upon the
earlier to occur of:
(A) the Sale of the Company;
(B) a Section 4(e) Termination Event as defined in the
Standstill and Bring Along Agreement by and among the Company and the Series E
Investors, dated as of the date hereof (the "Standstill Agreement"); or
(C) the date on which a neutral, third-party arbitrator
mutually chosen by the Company and by AmEx or a court of law with proper
jurisdiction determines that the AmEx Board Observer unreasonably refused to
recuse himself or herself from any meeting of the Company's Board of Directors
or a committee thereof following a request for recusal made by a majority of the
remainder of the Board, such request being a reasonable, good faith decision
made with due deliberation by such majority and the basis for which decision has
been communicated in writing to such AmEx Board Observer and to AmEx prior to
the request for recusal.
3. Reserved.
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4. Reserved.
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5. Reserved.
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6. Changes in Stock. If, from time to time during the term of this
----------------
Agreement:
a. there is a dividend of any security, stock split or other change
in the character or amount of any of the outstanding securities of the Company,
or
b. there is any consolidation or merger of the Company with or into
any other entity immediately following which shareholders of the Company hold
more than 50% of the voting equity securities of the surviving corporation,
provided that each of the shareholders of the Company immediately prior to any
such transaction (or series of related transactions) holds the same pro rata
share of such majority of the voting equity securities of the surviving
corporation as each held of the Company immediately prior to such transaction
(or series of related transactions)
then, in any of such events, any and all new, substituted or additional
securities or other property to which any Founder is entitled by reason of his
ownership of the Shares shall be immediately subject to the provisions of this
Agreement and be included in the word "Shares" for all purposes of this
Agreement with the same force and effect as the Shares presently subject to this
Agreement and with respect to which such securities or property were
distributed.
7. Legends. All stock certificates of the parties hereto representing
-------
any shares of Common Stock or Preferred Stock subject to the provisions of this
Agreement shall have endorsed thereon a legend to substantially the following
effect:
"THE VOTING RIGHTS OF, AND THE SHARES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO CERTAIN RESTRICTIONS AS SET FORTH IN AN AMENDED AND RESTATED
SHAREHOLDERS AGREEMENT. A COPY OF SUCH AGREEMENT IS ON FILE AT THE CORPORATION'S
PRINCIPAL PLACE OF BUSINESS AND ITS REGISTERED OFFICE."
8. Transferees.
-----------
a. All transferees or assignees of shares of capital stock of the
Company from the Founders, Xxxxxxx, the Investors or any other party to this
Agreement shall be bound by and subject to all of the terms and conditions of
this Agreement and, by execution of an Adoption Agreement substantially in the
form attached hereto as Schedule D and in accordance with the terms of Section
----------
15(c), shall become a party to this Agreement with the same effect as though it
had executed this Agreement on the date first written above.
b. Notwithstanding Section 8(a) above, all rights and obligations
hereunder with respect to any shares of capital stock of the Company held by the
Founders, Xxxxxxx, the Investors or any other party to this Agreement shall
terminate as to such shares and be of no further force or effect immediately
upon the sale of such shares following an Initial Public Offering or Reporting
Company Event pursuant to an effective registration statement under the
Securities Act of 1933, as amended, or under Rule 144 promulgated thereunder.
10
c. Upon the sale by the Company of Common Stock or Preferred
Stock to any Investor or other investor, including, without limitation, the
issuance of shares of Series E Preferred Stock upon exercise of the Warrants and
the issuance of shares of Series C Preferred Stock upon exercise of the Warrant,
the Option, the Option Warrant or the Exchange Warrant (as defined in Section 13
below), or the issuance of any exercisable, convertible or exchangeable
securities issued upon exercise thereof, each holder of such shares of Preferred
Stock shall, by execution of an Adoption Agreement substantially in the form
attached hereto as Schedule D and in accordance with the terms of Section 15(c),
----------
but without any further action required on the part of the Company, the
Founders, Xxxxxxx, the Investors or any other party to this Agreement, become a
party to this Agreement and shall thereafter hold any shares of Common Stock or
Preferred Stock held by such person subject to all of the terms, conditions and
rights set forth in this Agreement.
9. Reserved.
--------
10. Veto Rights.
-----------
a. Subject to Section 10(b) below, the Company shall not,
without first obtaining the written consent of United, take any of the following
actions:
(i) effect a Sale of the Company at any time prior to
August 10, 1999;
(ii) appoint any new Chief Executive Officer, Chief
Operating Officer or Vice President of Product Development (or such other
employee with principal responsibility for product development) of the Company
at any time prior to August 10, 1999, provided that such consent of United shall
not be unreasonably withheld or delayed by United; or
(iii) issue any shares of capital stock of the Company
for equity financing purposes to any entity identified on the Non-Approved
Investors List attached hereto as Schedule B (each entity to be hereinafter
----------
referred to as a "Non-Approved Investor" and collectively as the "Non-Approved
Investors") at any time before the earlier to occur of an Initial Public
Offering or August 10, 2000.
b. Notwithstanding the foregoing, such United veto rights
described in this Section 10 will expire in their entirety and be of no further
force and effect immediately upon the earlier to occur of:
(i) such time as the commercial relationship between
the Company and United, as evidenced by the Services Agreement (United Contract
140401) between United and the Company dated November 20, 1997 or any successor
agreement thereto or any new commercial agreement between United and the Company
entered into following the date hereof (collectively, the "Commercial
Relationship"), is terminated either (A) by the Company for United's non-
performance of its obligations under the terms and conditions of the Commercial
Relationship, or (B) by United at any time without cause; or
(ii) such time as Covia (and/or a United Related Party)
no longer owns the Minimum Equity Interest (as defined in Section 15(h) below).
11
c. Subject to Section 10(d) below, the Company shall not,
without first obtaining the written consent of AmEx, issue any shares of capital
stock of the Company for equity financing purposes to any entity identified on
the Non-Approved AmEx Investors List attached hereto as Schedule E (each entity
----------
to be hereinafter referred to as a "Non Approved AmEx Investor" and collectively
as the "Non Approved AmexEx Investors") at any time before the earlier to occur
of an Initial Public Offering or August 10, 2000.
d. Notwithstanding the foregoing, such AmEx veto rights
described in this Section 10(c) will expire in their entirety and be of no
further force and effect immediately upon such time as the commercial
relationship between the Company and American Express Travel Related Services
Company, Inc., as evidenced by the Web Services and Travel Agreement by and
between the Company and American Express Travel Related Services Company, Inc.,
dated the date hereof, or any successor agreement thereto or any new commercial
agreement between American Express Travel Related Services Company, Inc. and the
Company entered into following the date hereof (collectively, the "AmEx
Commercial Relationship") is terminated.
11. Bring Along Provision upon a Sale of the Company.
------------------------------------------------
a. In the event that a Sale of the Company (as defined above)
is approved by (A) the Board of Directors of the Company, (B) the holders of a
majority of the then-outstanding shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, and Common Stock (including, for
purposes of such majority approval, any shares of Common Stock or Preferred
Stock issuable upon exercise of any warrants for such stock then held by Covia,
giving effect to such shares as though Covia had exercised such warrants and
such shares were outstanding on the date of such approval) voting together as a
single class, not as separate classes or series, and on an as-converted basis,
and (C) if applicable, Covia, pursuant to Section 10 hereof, then, each of the
Voting Parties (excluding AmEx solely for the purposes of this Section 11)
hereby agree to:
(i) vote that number of shares of the capital stock of
the Company as to which they have beneficial ownership as of the time of the
record date for such Sale of the Company;
(ii) not exercise any dissenters' rights under
applicable law at any time for such Sale of the Company;
(iii) refrain from transferring any securities of the
Company, the acquirer, or any other applicable company during any period
prohibited by then applicable "pooling of interests" accounting treatment rules,
whether before or after the Sale of the Company, provided that such period of
restriction prior to the closing of a Sale of the Company shall not exceed one
hundred twenty (120) days; and
(iv) after receiving proper notice of such meeting
("Meeting Notice"), be present, in person or by proxy, along with any of their
respective affiliated entities, as holders of shares of voting securities, at
all meetings of shareholders of the Company to vote on the approval of a Sale of
the Company so that all shares of voting securities beneficially
12
owned by such shareholders and/or their affiliated entities may be counted for
the purposes of determining the presence of a quorum at such meetings.
b. Notwithstanding the foregoing, Covia shall only be subject
to the terms and conditions of Section 11(a) after the earlier to occur of:
(i) such time as the Commercial Relationship is
terminated either (A) by the Company for United's non-performance of its
obligations under the terms and conditions of the Commercial Relationship, or
(B) by United at any time without cause; or
(ii) August 10, 2000;
and further provided that in the event of a Sale of the Company to a
Covia Non-Approved Investor set forth on Schedule B attached hereto, Covia shall
----------
have the right and option, in Covia's sole discretion, to elect to abstain from
voting in favor of a Sale of the Company to such buyer and shall not be required
to be present, in person or by proxy, along with any of their respective
affiliated entities, as holders of shares of voting securities as otherwise
required by Section 11(a)(iv) above.
12. Ownership and Control Restrictions.
----------------------------------
a. Standstill and Control Agreement. Notwithstanding any other
--------------------------------
provision of this Agreement or the rights of first refusal held by any Investor
under that certain Amended and Restated Investor Rights Agreement dated of even
date herewith (the "Investor Rights Agreement"), without the prior approval of
an executive officer of the Company, each party to this Agreement (excluding
AmEx solely for the purposes of this Section 12), and any entity which becomes a
party to this Agreement pursuant to Sections 8(a), 8(c), or 15(c) hereof or
otherwise, including each of their respective affiliates or associates (in
either case as defined in Rule 12b-2 of the 1934 Act) (each a "Standstill
Investor" and collectively, the "Standstill Investors") covenant and agree that
they will not (and each party and its affiliates or associates will not assist
or encourage any other party to), directly or indirectly:
(i) acquire or agree, offer, seek or propose to
acquire, cause to be acquired or commence any tender or exchange offer seeking
to acquire beneficial ownership (as defined in Rule 13d-3 of the 1934 Act,
without regard to the 60 day provision in paragraph (d)(1)(i) thereof) of any
securities of the Company entitled to vote with respect to the election of any
directors of the Company ("Voting Securities"), any securities convertible into,
exchangeable for, or exercisable for, or that may become any Voting Securities
or any other right to acquire Voting Securities (such Voting Securities and
rights to acquire Voting Securities are collectively referred to herein as
"Securities"), if after such acquisition the Securities then beneficially owned
by such Standstill Investor represent more than such Standstill Investor's
Threshold Percentage (as set forth in Schedule A attached hereto) of the
----------
Company's then outstanding Securities (assuming the conversion, exchange and/or
exercise of all convertible, exchangeable and exercisable Securities); provided,
however, that any Standstill Investor shall be permitted to commence a tender or
exchange offer seeking to acquire beneficial ownership (as defined in Rule 13d-3
of the 1934 Act, without regard to the 60 day provision in paragraph (d)(1)(i)
thereof) of all, but not less than all, of the then outstanding shares of
capital stock of the
13
Company so long as each holder of any capital stock has the right to tender or
exchange any of the capital stock held by them to such Standstill Investor at
the same price and on the same terms as any other holder of any capital stock;
or
(ii) make, or in any way participate, in any
solicitation of proxies or consents with respect to any Voting Securities,
become a "participant" in any "election contest" (as such terms are defined or
used in Rule 14a-11 under the 0000 Xxx) with respect to the Company in each
case, in opposition to any proxy solicitation subject to such Rule 14a-11 being
conducted by the Company (providing that the foregoing shall not prohibit any
communication not amounting to a solicitation of proxies); or call or attempt to
call any meeting of the shareholders of the Company for the purpose of
proposing, nominating or supporting for election to the Board of Directors of
the Company or vote or cause to be voted any Voting Securities in favor of: (A)
any persons other than as contemplated to be elected pursuant to the terms of
----------
Section 1, provided and to the extent that such section is still in full force
and effect, or pursuant to the voting rights of the Series D1 Preferred Stock,
Series D2 Preferred Stock or Series D3 Preferred Stock of the Company, if any
shares of each or all are then outstanding; or (B) if subsequent to the Initial
Public Offering of the Company, any persons whose nominations have not been
approved by a majority of the Board of Directors of the Company except for that
----------
number of persons that would constitute the same percentage (the "Board
Representation Percentage") or any lesser percentage of the total authorized
number of directors of the Company to be elected at the Company's next special
or annual meeting of shareholders (an "Election of Directors") as the percentage
obtained by dividing (x) the aggregate number of Securities outstanding and held
by such Standstill Investor as of the record date for such Election of Directors
by (y) the aggregate number of Securities of the Company outstanding as of the
record date for such Election of Directors; provided that, for purposes of this
-------------
calculation, (i) if such Standstill Investor's Board Representation Percentage
would entitle such Standstill Investor to propose, nominate or support for
election to the Board of Directors a total number of persons that either
includes a fractional number of persons or is a fractional number that is less
than one (1) person, then such total number shall be rounded to the nearest
whole number of persons or to zero (0) persons, respectively and (ii) such total
number shall be reduced by the sum of (x) the number of persons that is to be
elected under subsection 1(a)(vii), provided that such subsection is still in
full force and effect, or that United or Covia may nominate or support for
election to the Board of Directors of the Company pursuant to the voting rights
of the Series D1 Preferred Stock or Series D2 Preferred Stock of the Company, if
either or both are then outstanding and (y) the number of persons that is to be
elected under subsection 1(a)(iv) pursuant to the voting rights of the Series D3
Preferred Stock of the Company, if such Series D3 Preferred Stock is then
outstanding.
(iii) enter into any arrangements, agreements or
understandings or substantive discussions or substantive negotiations with any
third party with respect to any of the matters described in paragraphs (i) or
(ii) of this Section 12(a) with respect to the Company.
b. Notice of Voting Securities Purchases and Sales. Each
-----------------------------------------------
Standstill Investor shall advise the Company pursuant to the terms of Section
15(g) as to its plans to acquire or dispose of beneficial ownership of Voting
Securities, or rights thereto, reasonably in advance of any such action.
14
c. Acts in Concert with Others. No Standstill Investor shall
---------------------------
join a partnership, limited partnership, syndicate or other group, or otherwise
act in concert with any third person, for the purpose of acquiring, holding,
voting or disposing of Voting Securities, or rights thereto.
d. Other Standstill Agreements. The Company covenants that it
---------------------------
will not enter into any other standstill agreement with any party containing
terms more favorable to such party than the terms of this Section 12.
e. Termination. The provisions of this Section 12 shall
-----------
terminate upon delivery to the Company of a written notice, signed by an officer
of United, setting forth the reason for such termination and the applicable
termination provisions of this Agreement, at any time following the earlier to
occur of (such termination referred to as a "Section 12(e) Termination Event"):
(i) May 10, 2001;
(ii) the breach of this Section 12 by any of the parties
hereto other than United or Covia (provided that the party which committed such
breach shall remain subject to the terms of subsections 12(a) through 12(d)
hereof), unless such breach is unintentional and is cured within ten (10)
business days from the date that such breach first becomes known to the Company
(provided that the provision of such opportunity to cure does not prejudice or
hinder the right of any other party hereto); or
(iii) such time as any corporation, partnership,
individual, trust, unincorporated association, or other entity or "person" (as
defined in Section 13(d)(3) of the 1934 Act), other than a party hereto (a
"Third Party"), shall have:
(a) commenced, or publicly announced an intention
to commence, a tender offer or exchange offer for any shares of any class of
capital stock of the Company, the consummation of which would result in
"beneficial ownership" (as defined under the 0000 Xxx) by such Third Party
(together with all such Third Party's "affiliates" and "associates" (as such
terms are defined in the 1934 Act)) of fifteen percent (15%) or more of the
capital stock of the Company (as measured on a fully diluted basis, assuming the
conversion, exercise or exchange of any of the then outstanding securities
convertible, exercisable or exchangeable for, or any other rights to acquire
shares of, capital stock of the Company) (collectively, for purposes of this
Section 12(e), the "Capital Stock"), or of ten percent (10%) or more of the
Capital Stock if such Third Party is a Non-Approved Investor (as defined in
Section 10 above);
(b) acquired beneficial ownership of shares of any
class of capital stock of the Company which, when aggregated with any shares of
any class of capital stock of the Company already owned by such Third Party, its
affiliates and associates, would result in the aggregate beneficial ownership by
such Third Party, its affiliates and associates of fifteen percent (15%) or more
of the Capital Stock (or ten percent (10%) or more of the Capital Stock if such
Third Party is a Non-Approved Investor), provided that such Third Party (except
for a Third Party that is a Non-Approved Investor) has also filed a Schedule 13D
with the
15
Securities and Exchange Commission in which it reserves the right to acquire or
hold the Company's securities with a purpose or effect of changing or
influencing control of the Company or in connection with or as a participant in
any transaction having that purpose or effect;
(c) filed a Notification and Report Form under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, reflecting an
intent to acquire all or substantially all of the Company's assets;
(d) acquired all or substantially all of the
assets of the Company;
(e) entered into an agreement with the Company
which contemplates (A) the Sale of the Company or (B) the acquisition of (x) all
or substantially all of the assets of the Company by such Third Party or (y)
beneficial ownership of fifteen percent (15%) or more of the Capital Stock by
such Third Party if such Third Party has not also entered into a standstill
agreement with the Company containing terms that are at least as restrictive to
such party as the terms of this Section 12;
(f) solicited "proxies" in a "solicitation"
subject to the proxy rules under the 1934 Act, executed any written consent or
become a "participant" in any "solicitation" (as such terms are defined in
Regulation 14A under the 1934 Act), in opposition to any proxy solicitation
being conducted by the Company, in each case with respect to any class of
capital stock of the Company;
(g) publicly announced a proposal or intention to
undertake any of the actions enumerated in the foregoing subsections (a) through
(f);
(h) entered into substantive negotiations or
substantive discussions with the Board of Directors of the Company, or with an
executive officer of the Company, with the knowledge of at least four (4) of the
members of the Company's Board of Directors, concerning any of the actions
enumerated in the foregoing subsections (a) through (f); or
(iv) a Section 4(e) Termination Event as set forth in
the Standstill Agreement.
13. Repurchase of Covia Shares. Provided that Covia's percentage ownership
--------------------------
interest of any Voting Securities of the Company does not then exceed the 24.9%
Limit (as defined below), as soon as practicable but at least fifteen (15) days
prior to the Company's repurchasing or redeeming any of the then outstanding
shares of capital stock of the Company or taking any similar action (a
"Triggering Action"), the effect of which would cause Covia to hold in excess of
twenty-four and nine-tenths percent (24.9%) of all of the then outstanding
Voting Securities of the Company (such percentage ownership limit referred to
herein as the "24.9% Limit"), the Company shall provide written notice (the
"Triggering Notice") to United of its intent to take such action and,
thereafter, the Company shall, upon the written request of United (the
"Repurchase Request") and subject to compliance with all applicable laws,
repurchase from Covia at a repurchase price of $.01 per share and in exchange
for an Exchange Warrant (as
16
defined below), that number of Covia Shares (or any shares of Common Stock
issued upon conversion of such Covia Shares) (the "Repurchase Shares") necessary
so that Covia's percentage ownership interest of any Voting Securities of the
Company does not exceed the 24.9% Limit; provided that:
a. the closing of the repurchase of the Repurchase Shares
pursuant to this Section 13 shall take place on the date designated by the
Company, which date shall not be later than the date the Triggering Action is
consummated (the "Repurchase Closing Date"). Upon the Repurchase Closing Date,
the Company shall pay the repurchase price for the Repurchase Shares pursuant to
this Section 13 by delivery of a check or wire transfer of funds in the
aggregate amount of the repurchase price for such Repurchase Shares; provided,
however, that in the event that United or Covia is indebted to the Company for
any sums, the total of such sums may be offset by the Company. In addition to
such payment, the Company shall issue to Covia on the Repurchase Closing Date a
warrant to purchase the same number and class (and series, if applicable) of
shares as the Repurchase Shares at a per share exercise price of $0.01 in the
form attached as Exhibit E to the Series C Purchase Agreement (with such
adjustments to the number and class and/or series of shares purchasable under
such form of warrant as are necessary to effect the intent of the foregoing) (an
"Exchange Warrant");
b. in the event that Repurchase Shares are to be repurchased
pursuant to this Section 13, United, Covia and their successors and assigns
covenant and agree that they shall take all steps necessary to deliver to the
Company for cancellation any stock certificate(s) representing the Repurchase
Shares and to obtain all required third-party, governmental and regulatory
consents and approvals and take all other actions necessary to facilitate the
consummation of such repurchase prior to the Repurchase Closing Date;
c. immediately upon the repurchase of the Repurchase Shares
and prior to any later exercise of the Exchange Warrant under the terms thereof,
Covia shall cease to be entitled to any rights of a shareholder with respect to
the Repurchase Shares, including (without limitation) the right to vote such
Repurchase Shares, receive dividends or other distributions thereon, exercise
preemptive rights or be notified of shareholder meetings;
d. notwithstanding the above provisions of this Section 13, in
the event that United does not deliver a Repurchase Request to the Company prior
to the time and date of the Triggering Action set forth in any Triggering
Notice, then the Company shall not have any obligation under this Section 13 to
repurchase any Covia Shares at the time and date that such Triggering Action is
consummated;
e. this Section 13 shall terminate in its entirety and be of
no further force or effect upon a Sale of the Company.
14. Termination. Notwithstanding any other termination provisions
-----------
specifically set forth herein with respect to a specific section or sections of
this Agreement, this Agreement shall terminate in its entirety and be of no
further force or effect upon the earlier to occur of:
a. an agreement to terminate is entered into in writing by:
(i) the Company, (ii) the holders of a majority of the outstanding Shares then
held by the Founders and
17
Xxxxxxx, (iii) the holders of a majority of the Common Stock issued or issuable
upon conversion of Preferred Stock then outstanding and held by the Investors,
(iv) United and (v) AmEx;
b. the Sale of the Company; or
c. May 10, 2008.
15. Miscellaneous.
-------------
a. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of California applicable to
contracts made among residents of, and wholly to be performed in, the State of
California.
b. Further Instruments. From time to time, each party hereto
-------------------
shall execute and deliver such instruments and documents as may be reasonably
necessary to carry out the purposes and intent of this Agreement.
c. Binding Effect. In addition to any restriction on transfer
--------------
that may be imposed by any other agreement by which any party hereto may be
bound, and except as set forth in Section 15(q) or another section herein, this
Agreement shall be binding upon and shall inure to the benefit of each of the
parties hereto, their respective heirs (if applicable), successors and assigns
and to such additional individuals or entities that may become shareholders of
the Company and that desire to become parties hereto; provided that for any such
transfer of rights and obligations to be effective, such shareholder shall have
executed and delivered an Adoption Agreement substantially in the form attached
hereto as Schedule D (an "Adoption Agreement"). Upon the execution and delivery
----------
of an Adoption Agreement by any transferee of a party to this Agreement or any
shareholder reasonably acceptable to the Company (each, for purposes of this
Section 15(c), a "New Shareholder"):
(i) such New Shareholder shall become a party hereto
with the same effect as though it had executed this Agreement on the date first
written above; and
(ii) in accordance with Section 12 hereof, such New
Shareholder shall be deemed to be a "Standstill Investor" and the Company shall
amend the attached Schedule A, on and as of the date of such Adoption Agreement,
----------
to reflect such New Shareholder's name and Threshold Percentage and/or any other
change resulting from such New Shareholder's ownership interest, including
without limitation any change in the name(s) and/or Threshold Percentage(s) of
any party or parties to this Agreement.
By their execution of this Agreement or any Adoption Agreement, each of the
parties hereto appoints the Company as its attorney-in-fact for the purposes of
executing any Adoption Agreement which may be required to be delivered hereunder
and/or amending Schedule A hereto pursuant to the terms of this Section 15(c).
----------
d. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18
e. Entire Agreement; Termination of Prior Agreement. This
------------------------------------------------
Agreement shall become effective and shall constitute and contain the entire
agreement of the parties hereto, superseding any and all prior negotiations,
correspondence, understandings and agreements among the parties respecting the
subject matter hereof, and the Prior Agreement shall be terminated and all
rights granted under the Prior Agreement shall be superseded and replaced in
their entirety by the terms set forth herein, upon (A) the execution of this
----
Agreement by (i) the Company, (ii) each of the Founders, (iii) Xxxxxxx, (iv) the
holders of a majority of the shares of Common Stock issued or issuable upon
conversion of Preferred Stock then outstanding and held by the Series A
Investors, Series B Investors, Series E Investors and any assignees of such
Investors (as provided for in Section 8 hereof), (iv) United and (v) Covia, and
(B) the Initial Closing (as defined in the Purchase Agreement).
f. Amendments and Waivers. Section 1 of this Agreement may be
----------------------
amended or the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of (i) the Company, (ii) the holders of a majority of the
outstanding Shares then held by the Founders and Xxxxxxx, (iii) the holders of a
majority of the Common Stock issued or issuable upon conversion of Preferred
Stock then outstanding and held by the Investors and assignees of the Investors
(as provided for in Section 8 hereof), and (iv) United, if and for so long as
Covia (and/or a United Related Party) hold(s) at least 2,434,287 shares of
Common Stock Equivalents (as defined in Section 15(h) below). Section 2 of this
Agreement may be amended or the observance thereof may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only with the written consent of (i) the Company, (ii) the holders of a majority
of the outstanding Shares then held by the Founders and Xxxxxxx, (iii) the
holders of a majority of the Common Stock issued or issuable upon conversion of
Preferred Stock then outstanding and held by the Investors and assignees of the
Investors (as provided for in Section 8 hereof), and (iv) United, if and for so
long as Covia (and/or a United Related Party) hold(s) at least 3,651,430 shares
of Common Stock Equivalents. Sections 6, 7 and 8 of this Agreement may be
amended or the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of (i) the Company, (ii) the holders of a majority of the
outstanding Shares then held by the Founders and Xxxxxxx, (iii) the holders of a
majority of the Common Stock issued or issuable upon conversion of Preferred
Stock then outstanding and held by the Investors and assignees of the Investors
(as provided for in Section 8 hereof), and (iv) United, if and for so long as
Covia (and/or a United Related Party) hold(s) the Minimum Equity Interest (as
such term is defined in Section 15(h) below). Sections 10, 11, 12, 13, 14, and
15 of this Agreement may be amended or the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of (i) the Company, (ii) the
holders of a majority of the outstanding Shares then held by the Founders and
Xxxxxxx, (iii) the holders of a majority of the Common Stock issued or issuable
upon conversion of Preferred Stock then outstanding and held by the Investors
and assignees of the Investors (as provided for in Section 8 hereof) (excluding,
however, any such Common Stock held by the Series E Investors in connection with
an amendment or waiver of Sections 11 and 12), and (iv) United. Any amendment or
waiver effected in accordance with this Section 15(f) shall be binding upon the
Company, each of the Founders, Series A Investors, Series B Investors, Series E
Investors, Xxxxxxx, United, Covia and each holder of Preferred Stock and any
Common Stock issued upon conversion thereof to whom the rights have been
transferred by any Investors in accordance with Section 8 hereof.
Notwithstanding the
19
foregoing, any amendment or waiver of any section of this Agreement, in addition
to the consents set forth above, also requires the written consent of AmEx.
g. Notices, etc. All notices and other communications required
------------
or permitted hereunder shall be in writing and shall be deemed effectively given
(i) upon personal delivery to the party to be notified, (ii) upon confirmed
electronic facsimile ("fax") transmission to the fax number for any party as
specified below, or (iii) three (3) days after deposit with the United States
mail, by registered or certified mail, postage prepaid, in each case addressed
or faxed (A), if to an Investor, to such Investor's address or fax number, as
the case may be, set forth on the signature pages attached to this Agreement, or
at such other address or fax number, as the case may be, as such Investor shall
have furnished to the Company in writing in accordance with this Section 15(g),
(B), if to any other holder of the Preferred Stock and Common Stock issued upon
conversion thereof to whom any rights under this Agreement have been transferred
in accordance with Sections 8 and 15(c) hereof, to such address or fax number,
as the case may be, as such holder shall have furnished the Company in writing
in accordance with Section 15(c), or, until any such holder so furnishes an
address or fax number to the Company, then to the address or fax number, as the
case may be, of the last holder thereof who has so furnished an address or fax
number to the Company, (C), if to a Founder, to such address or fax number, as
the case may be, as such Founder shall have last furnished the Company in
writing, or (D), if to the Company, to the address or fax number, as the case
may be, of its principal offices.
h. Certain Definitions. For purposes of this Agreement,
-------------------
"United Related Party" shall mean (i) United, (ii) any corporation or limited
liability company directly controlled by, controlling, or under common control
with (to the extent of more than fifty percent (50%) of its issued capital stock
entitled to vote for the election of directors) United, or (iii) any partnership
directly controlled by, controlling, or under common control with (to the extent
of more than fifty percent (50%) of its voting power or otherwise having power
to control its general activities) United, but in each case only for so long as
such ownership or control shall continue. For purposes of this Agreement, "AmEx
Related Party" shall mean (i) any corporation or limited liability company
directly controlled by, controlling, or under common control with (to the extent
of more than fifty percent (50%) of its issued capital stock entitled to vote
for the election of directors) AmEx, or (ii) any partnership directly controlled
by, controlling, or under common control with (to the extent of more than fifty
percent (50%) of its voting power or otherwise having power to control its
general activities) AmEx, but in each case only for so long as such ownership or
control shall continue. For purposes of this Agreement, "Common Stock
Equivalents" shall mean the Company's Common Stock issued or issuable upon
conversion of Series C Preferred Stock of the Company (as adjusted for any
subsequent stock splits, subdivisions, combinations, reclassifications,
reorganizations and the like, and treating all Series C Preferred Stock of the
Company on an as-converted basis and treating all outstanding warrants to
purchase Series C Preferred Stock (or the Common Stock issuable upon conversion
thereof) at a per share exercise price of $0.01 or less held by such holder on
an as-exercised basis). For purposes of this Agreement, the term "Minimum Equity
Interest" shall be defined as follows:
(i) if prior to the consummation of the sale of the
-----
Subsequent Shares (as such term is defined in the Series C Agreement), then
"Minimum Equity Interest"
20
shall mean that Covia (and/or a United Related Party) hold(s) not less than
ninety percent (90%) of the sum of:
(A) 4,044,297 shares of Series C Preferred Stock
purchased pursuant to the Series C Agreement (or such number of shares of Common
Stock issued upon conversion thereof), less any of such shares repurchased by
the Company pursuant to Section 13 hereof; plus
(B) 807,698 shares of Series C Preferred Stock (or
such number of shares of Common Stock issued or issuable upon conversion
thereof) issued or issuable upon exercise of the Warrant; plus
(C) any shares of Series C Preferred Stock (or
such number of shares of Common Stock issued or issuable upon conversion
thereof) or Common Stock, in either case, issued or issuable upon exercise of
any and all Exchange Warrants originally issued to Covia by the Company pursuant
to Section 13 hereof; plus
(D) any securities (or the number of shares of
Common Stock issued or issuable upon conversion thereof) purchased by Covia
pursuant to the Purchase Agreement, including any securities (or the number of
shares of Common Stock issued or issuable upon conversion thereof) issued or
issuable upon the exercise of warrants issued to Covia pursuant to the Purchase
Agreement.
(ii) if after the consummation of the sale of the
-----
Subsequent Shares (as such term is defined in the Series C Agreement), then
"Minimum Equity Interest" shall mean that Covia (and/or a United Related Party)
hold(s) not less than ninety percent (90%) of the sum of:
(A) 4,060,875 shares of Series C Preferred Stock
purchased pursuant to the Series C Agreement (or such number of shares of Common
Stock issued upon conversion thereof), less any of such shares repurchased by
the Company pursuant to Section 13 hereof; plus
(B) 807,698 shares of Series C Preferred Stock (or
such number of shares of Common Stock issued or issuable upon conversion
thereof) issued or issuable upon exercise of the Warrant; plus
(C) any shares of Series C Preferred Stock (or
such number of shares of Common Stock issued or issuable upon conversion
thereof) or Common Stock, in either case, issued or issuable upon exercise of
any and all Exchange Warrants originally issued to Covia by the Company pursuant
to Section 13 hereof; plus
(D) any securities (or the number of shares of
Common Stock issued or issuable upon conversion thereof) purchased by Covia
pursuant to the Purchase Agreement, including any securities (or the number of
shares of Common Stock issued or issuable upon conversion thereof) issued or
issuable upon the exercise of warrants issued to Covia pursuant to the Purchase
Agreement.
21
x. Xxxxx of Proxy. Should the provisions of this Agreement be
--------------
construed to constitute the granting of proxies, such proxies shall be deemed
coupled with an interest and are irrevocable for the term of this Agreement.
j. Manner of Voting. The voting of shares pursuant to this
----------------
Agreement may be effected in person, by proxy, by written consent, or in any
other manner permitted by applicable law.
k. Stock Splits, Stock Dividends, etc. In the event of any
----------------------------------
issuance of shares of the Company's voting securities hereafter to any of the
Parties hereto (including, without limitation, in connection with any stock
split, stock dividend, recapitalization, reorganization, or the like), such
shares shall become subject to this Agreement and shall be endorsed with the
legend set forth in Section 7.
l. No Liability for Election of Recommended Directors. Neither
--------------------------------------------------
the Company, the Founders, Xxxxxxx, the Investors, nor any officer, director,
stockholder, partner, employee or agent of such party, makes any representation
or warranty as to the fitness or competence of the nominee or designee of any
party hereunder to serve on the Company's Board by virtue of such party's
execution of this Agreement or by the act of such party in voting for such
nominee pursuant to this Agreement.
m. Specific Enforcement. It is agreed and understood that
--------------------
monetary damages would not adequately compensate an injured party for the breach
of this Agreement by any party hereto (or the permitted transferees or assignees
of any party hereto that is bound by the provisions of this Agreement), that
this Agreement shall be specifically enforceable, and that any breach or
threatened breach of this Agreement shall be the proper subject of a temporary
or permanent injunction or restraining order. Further, each such party hereto
waives any claim or defense that there is an adequate remedy at law for such
breach or threatened breach.
n. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
o. Voting of Series D1 Preferred Stock, Series D2 Preferred
--------------------------------------------------------
Stock and Series D3 Preferred Stock. In the event that any proposal that has
-----------------------------------
been approved by the Board of Directors of the Company (the "Board"), other than
a proposal for the express purpose of nominating, electing or removing members
of the Board, is submitted to the shareholders of the Company for approval,
United, Covia and AmEx, and their successors and assigns, hereby agree to:
(i) vote that number of shares of Series D1 Preferred
Stock, Series D2 Preferred Stock or Series D3 Preferred Stock of the Company as
to which they have beneficial ownership as of the time of the record date for
the approval of such proposal;
(ii) not exercise any dissenters' rights under
applicable law at any time regarding such proposal, including, but not limited
to, any proposal regarding a Sale of
22
the Company, if such right is available to such holder with respect to any
Series D1 Preferred Stock, Series D2 Preferred Stock or Series D3 Preferred
Stock of the Company as to which they have beneficial ownership for the approval
of such proposal;
(iii) refrain from transferring any Series D1 Preferred
Stock, Series D2 Preferred Stock or Series D3 Preferred Stock of the Company as
to which they have beneficial ownership or securities of the acquirer or any
other applicable company during any period prohibited by then applicable
"pooling of interests" accounting treatment rules, whether before or after a
Sale of the Company, provided that any such period of restriction prior to the
closing of a Sale of the Company shall not exceed one hundred twenty (120) days;
and
(iv) after receiving proper notice of such meeting, be
present, in person or by proxy, along with any of their respective affiliated
entities, as holders of shares of voting securities, at all meetings of
shareholders of the Company to vote on the approval of such proposal so that all
shares of Series D1 Preferred Stock, Series D2 Preferred Stock or Series D3
Preferred Stock of the Company as to which they and/or their affiliated entities
have beneficial ownership may be counted for the purposes of determining the
presence of a quorum at such meetings.
p. Share Number Adjustments. Unless otherwise set forth herein,
------------------------
wherever any provision of this Agreement sets forth a specific number of shares
of the Company's Capital Stock (as defined herein), such number shall be
appropriately adjusted upon the occurrence of any stock splits, dividends,
combinations, reclassifications, recapitalizations, reorganizations and the like
with respect to the Company's Capital Stock.
q. Nonassignment of Rights. The rights (but not the
-----------------------
obligations) provided to United and/or Covia herein under Sections 1, 2, 10, 11,
12, 13, 14, and 15, shall not be assignable without the prior, express written
consent of the Company, except in the case of an assignment to a United Related
Party (as defined in Section 15(h) above). The rights (but not the obligations)
provided to AmEx herein under Sections 1, 2, 10, and 15, shall not be assignable
without the prior, express written consent of the Company, except in the case of
an assignment to an AmEx Related Party (as defined in Section 15(h) above).
r. Effectiveness. This Agreement will only become effective for
-------------
the parties hereto upon (a) the Initial Closing, as that term is defined in the
Purchase Agreement, and (b) its execution and delivery by the parties listed on
the signature pages attached hereto. Upon the effectiveness of this Agreement,
this agreement shall be binding upon each party to this Agreement, including,
without limitation, those parties that are not signatories to the Prior
Agreement. This Agreement will terminate if such Initial Closing has not been
effected on or before November 30, 1999.
23
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
COMPANY:
XXXXXXXX.XXX,
a California corporation
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------
Xxxxxxx Xxxxxxxx,
Chief Operating Officer and Chief
Financial Officer
Address: XxxXxxxx.xxx
000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
"FOUNDERS":
/s/ Xxxxxx Xxxxxx
-----------------------------------
XXXXXX XXXXXX
/s/ Xxxxx Xxxxxxxx
-----------------------------------
XXXXX XXXXXXXX
"XXXXXXX":
/s/ Xxxxxxx X.X. Xxxxxxx
-----------------------------------
XXXXXXX X.X. XXXXXXX
SIGNATURE PAGE TO XXXXXXXX.XXX
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
UNITED AIR LINES, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------
Xxxxxxxx X. Xxxxx,
Vice President
Address: World Headquarters - WHQLD
X.X. Xxx 00000
Xxxxxxx, XX 00000
Attn: General Counsel
COVIA LLC
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------
Xxxxxxxx X. Xxxxx,
Vice President
Address: c/o United Air Lines, Inc.
World Headquarters - WHQLD
X.X. Xxx 00000
Xxxxxxx, XX 00000
Attn: General Counsel
SIGNATURE PAGE TO XXXXXXXX.XXX
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
U.S. Venture Partners V, L.P.
USVP V International, L.P.
2180 Associates Fund V, L.P.
USVP V Entrepreneur Partners, L.P.
By: Presidio Management Group V, L.L.C.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxx
------------------------------------------
Title: Attorney-In-Fact
-----------------------------------------
Address: U.S. Venture Partners
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
AMERICAN EXPRESS TRAVEL RELATED
SERVICES COMPANY, INC.
By: /s/ Xxxx Xxxxxxx
--------------------------------------------
Name: Xxxx Xxxxxxx
------------------------------------------
Title: President, AERS
-----------------------------------------
Address: American Express Tower
World Financial Center
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx Xxxxxxxx
SIGNATURE PAGE TO XXXXXXXX.XXX
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
BRENTWOOD ASSOCIATES VII, L.P.
By: Brentwood VII Ventures, L.P.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxx X. Xxxxx,
General Partner
Address: Brentwood Associates
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
BRENTWOOD AFFILIATES FUND, L.P.
By: Brentwood VII Ventures, L.P.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------------
Xxxxxxx X. Xxxxx,
General Partner
Address: Brentwood Associates
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
SIGNATURE PAGE TO XXXXXXXX.XXX
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
ITN JOINT VENTURE,
a California Joint Venture
By: Ambassadors International, Inc.,
a Joint Venturer
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------------
Xxxx X. Xxxxxxxxx,
President
Address: c/o Contrarian Group
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxx
SIGNATURE PAGE TO XXXXXXXX.XXX
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
MeriTech Capital Partners L.P.
By: MeriTech Capital Associates L.L.C.
its General Partner
By: MeriTech Management Associates L.L.C.
a managing member
By: /s/ Xxxx Xxxxxx
--------------------------------------
Xxxx Xxxxxx, a managing member
MeriTech Capital Affiliates L.P.
By: MeriTech Capital Associates L.L.C.
its General Partner
By: MeriTech Management Associates L.L.C.
a managing member
By: /s/ Xxxx Xxxxxx
--------------------------------------
Xxxx Xxxxxx, a managing member
Address: 000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
SIGNATURE PAGE TO XXXXXXXX.XXX
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
AMERICA WEST AIRLINES, INC.
By: /s/ Xxxxx Xxxxx
--------------------------------
Xxxxx Xxxxx
Vice President of Revenue Management
Address: America West Airlines, Inc.
Revenue Management
0000 Xxxx Xxx Xxxxxx Xxxxxxxxx
Mail Stop CH-VRM
Phoenix, Arizona 85034-3899
Attention: Xxxxx Xxxxx
With a copy to:
Xxxxxx Godward LLP
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxx
AIR CANADA
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
-------------------------------
Title: Sr. V.P. Business Development
-------------------------------
SIGNATURE PAGE TO XXXXXXXX.XXX
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
/s/ Xx Xxxxxx
-------------------------------
XX XXXXXX
SIGNATURE PAGE TO XXXXXXXX.XXX
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
SCHEDULE A
----------
SCHEDULE OF SHAREHOLDERS
Number Threshold
Shareholder Class of Shares of Shares* Percentage
----------- --------------- ---------- ----------
"Founders"
----------
Xxxxxx, Al Common Stock 1,000,000 5.11%
Xxxxxx, Xxxxxx Common Stock 1,000,000 5.11%
Xxxxxxxx, Xxxxx X. Common Stock 1,000,000 5.11%
"Xxxxxxx"
---------
Xxxxxxx X.X. Xxxxxxx Common Stock 818,250 4.18%
"Series A Investors"
--------------------
Brentwood Associates VII, L.P. Preferred Stock 1,985,353 10.15%
ITN Joint Venture Preferred Stock 1,544,163 7.90%
"Series B Investors"
--------------------
U.S. Venture Partners V, L.P. Preferred Stock 2,385,543 12.20%
USVP V International, L.P. Preferred Stock 132,530 0.68%
2180 Associates Fund V, L.P. Preferred Stock 74,217 0.38%
USVP V Entrepreneur Partners, L.P. Preferred Stock 58,313 0.30%
Brentwood Associates VII, L.P. Preferred Stock 496,988 2.54%
Brentwood Affiliates Fund, L.P. Preferred Stock 66,265 0.34%
"Covia" and/or "United Related Party"
-------------------------------------
Covia LLC Preferred Stock 4,851,995 30.00%**
* The term "Shares" includes any and all shares issuable upon exercise of
outstanding warrants to purchase shares of Preferred Stock held by such
Shareholder (assuming, for purposes of this calculation, that the issuance of
the Warrant to Covia is an outstanding warrant).
** This number has been set at 30% and was not calculated using the formula that
was used to determine the Threshold Percentages listed for the other
Shareholders.
S-1
SCHEDULE B
----------
NON-APPROVED INVESTORS LIST
[*]
----------
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
S-2
SCHEDULE D
----------
ADOPTION AGREEMENT
This Adoption Agreement ("Adoption Agreement") is executed by the
undersigned (the "Shareholder") pursuant to the terms of that certain Amended
and Restated Shareholders Agreement dated September 14, 1999 (the "Shareholders
Agreement") by and among XxxXxxxx.xxx, a California corporation (the "Company")
and certain of its shareholders. Capitalized terms used but not defined herein
shall have the respective meanings ascribed to such terms in the Shareholders
Agreement. By the execution of this Adoption Agreement, the Shareholder agrees
as follows:
(a) Acknowledgment. Shareholder acknowledges that Shareholder is
--------------
acquiring certain shares of the capital stock of the Company (the "Stock"),
subject to the terms and conditions of the Shareholders Agreement.
(b) Agreement. Shareholder (i) agrees that the Stock acquired by
---------
Shareholder shall be bound by and subject to the terms of the Shareholders
Agreement, and (ii) hereby adopts the Shareholders Agreement with the same force
and effect as if the Shareholder were originally a party thereto.
(c) Notice. Any notice required or permitted by the Shareholders
------
Agreement shall be given to Shareholder at the address listed beside
Shareholder's signature below.
(d) Share Ownership and Threshold Percentage. For purposes of the
----------------------------------------
Schedule of Shareholders attached as Schedule A to the Shareholders Agreement,
the Shareholder currently owns ______________ shares of the
_____________________________ of the Company and such Shareholder's Threshold
Percentage shall initially be ______________________ percent (____%).
EXECUTED AND DATED this ______ day of _________________, ____.
SHAREHOLDER:
By:
--------------------------------------
Name and Title
Address:
--------------------------------
--------------------------------
Accepted and Agreed on behalf of all the
parties to the Shareholders Agreement:
-------------------------------------
COMPANY:
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
S-5
SCHEDULE E
----------
Those entities and individuals that are from time to time listed on Exhibit AA
----------
to the Web Services and Travel Agreement between American Express Travel Related
Services Company, Inc. and the Company, pursuant to Section 10.4 thereof.
S-6
AMENDMENT NO. 1 TO
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
This AMENDMENT NO. 1 to the Amended and Restated Investor Rights
Agreement (the "Investor Rights Agreement") dated September 14, 1999, by and
among XxxXxxxx.xxx, a California corporation (the "Company") and the persons and
entities listed on Schedule A thereto, each of which is herein referred to as an
----------
"Investor," and to the Amended and Restated Shareholders Agreement (the
"Shareholders Agreement") dated September 14, 1999, by and among the Company,
the Founders (as defined in the Shareholders Agreement) and the Investors (as
defined in the Shareholders Agreement) is entered into by the Company, the
Founders, and the Investors whose names are set forth on the signature pages
hereto.
WITNESSETH:
WHEREAS, the parties hereto are parties to the Investor Rights
Agreement and the Shareholders Agreement;
WHEREAS, the parties hereto desire to amend the Investor Rights
Agreement to add Eastern Air Lines, Inc. as a party to the Investor Rights
Agreement and the Shareholders Agreement; and
WHEREAS, for purposes of amending said agreements, the undersigned:
(i) with respect to the Investor Rights Agreement, constitute the holders of
sixty-six and two-thirds percent (66 2/3%) of the Registrable Securities (as
defined in the Investor Rights Agreement) and (ii) with respect to the
Shareholders Agreement, hold the number of shares required under Section 15(f)
of the Shareholders Agreement.
NOW, THEREFORE, the parties hereto, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
intending to be legally bound, agree as follows:
ARTICLE I
Amendment to the Investor Rights Agreement
1. The definition of `Preferred Stock' under Section 1 is hereby
amended to add the following language at the end of the paragraph:
", (vi) shares of Common Stock of the Company issued upon
conversion of that certain convertible promissory note issued to
Eastern Air Lines, Inc. by the Company on July 15, 1999."
2. Section 5.3(a) is hereby amended to add the following language at
the end of the section:
"Provided, however, that if the Holder requesting that the
Company file a registration statement on Form S-3 pursuant to this Section 5.3
is Eastern Air Lines, Inc. and such request covers all securities of the Company
held by Eastern Air Lines, Inc., then the Two Million Dollar ($2,000,000)
threshhold set forth above shall not apply to such request, although all other
requirements and limitations of this Section 5.3 shall remain in full force and
effect with regard to such request."
ARTICLE II
Amendment to Shareholders Agreement
1. The Shareholders Agreement is hereby amended to add Eastern Air
Lines, Inc. as an `Investor' to the Shareholders Agreement.
Miscellaneous
1. Except as amended by this Amendment, all terms and provisions of
the Investor Rights Agreement and Shareholders Agreement continue in full force
and effect and unchanged and are hereby confirmed in all respects.
2. This Amendment may be signed in multiple counterparts, each of
which shall be an original, with the same effect as if the signatures were upon
the same instrument.
2
