EXHIBIT 10.29
OBSERVER RIGHTS AGREEMENT
This Observer Rights Agreement by and among Sycamore Venture Capital Group
("Sycamore"), Primus Capital Fund IV Limited Partnership, a limited partnership
organized under the laws of Delaware (the "Primus IV Fund"), Primus Executive
Fund Limited Partnership, a limited partnership organized under the laws of
Delaware (the "Primus Executive Fund") (the Primus IV Fund and the Primus
Executive Fund being hereinafter referred to collectively as the "Primus Funds")
and iName, Inc. (the "Company"), shall be effective upon the closing (the
"Primus Closing") under that certain Class C Preferred Stock Purchase Agreement
(the "Stock Purchase Agreement") dated as of July 31, 1998 between iName, Inc.
and certain Purchasers (as defined therein) contemplated by that certain
Accession Agreement (the "Accession Agreement") among the Company and the
investors signatory thereto dated August 31, 1998. Capitalized terms used herein
but not otherwise defined shall have the respective meanings ascribed to such
terms in the Waiver, Consent and Amendment to the Class A Preferred Stock
Purchase Agreement dated May 27, 1997, the Purchase and Sale Agreement dated
December 17, 1997, the Purchase and Sale Agreement dated January 5, 1998,
between the Company and the persons identified therein, and Investors' Rights
Agreement between the Company and the persons identified therein (the
"Investors' Rights Agreement").
WHEREAS, the Company has granted to Sycamore the right (the "Observer
Right") to designate one observer to the board to attend all meetings of the
Board of Directors of the Company in a nonvoting observer capacity pursuant to
section 5.2 of the Investors' Rights Agreement;
WHEREAS, the Primus Funds shall purchase Shares and Warrants and become
parties to the Investors' Rights Agreement upon the Primus Closing; and
WHEREAS, the Primus Funds desire to have the right to appoint one observer
to the board to attend all meetings of the Board of Directors of the Company in
a nonvoting observer capacity, and Sycamore desires to grant to the Primus Funds
the right to utilize its Observer Right, subject to the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
in the Stock Purchase Agreement and in the Accession Agreement and other good
and valuable consideration, the receipt of which is hereby acknowledged,
Sycamore and the Primus Funds agree to the following:
For so long as Sycamore shall enjoy its Observer Right under the Investors'
Rights Agreement Sycamore shall appoint as the observer to the board pursuant to
the Observer Right a person (the "Observer") designated by the Primus Funds,
provided that Sycamore shall at all times, in its sole discretion, for any
reason or no reason, have the right to remove such person as Observer and
appoint its own designee as Observer. The terms and conditions of such
appointment and the rights and obligations of such Observer shall be as set
forth in the Investors' Rights Agreement.
In the event that Sycamore shall remove the Observer designated by the
Primus Funds pursuant to the previous paragraph, the Company shall grant to the
Primus Funds the right to appoint one observer (the "Primus Observer") to the
board to attend all meetings of the Board of Directors of the Company in a
nonvoting observer capacity. The rights and obligations of the Primus Observer
shall be the same as those set forth with respect to the Observer in the
Investors' Rights Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Observer Rights
Agreement as of August 31, 1998.
SYCAMORE VENTURE CAPITAL GROUP
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Managing Partner
iNAME, INC.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: President
PRIMUS CAPITAL FUND IV LIMITED PARTNERSHIP
By: Primus Venture Partners IV Limited Partnership, its
general partner
By: Primus Venture Partners IV, Inc., its general partner
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
PRIMUS EXECUTIVE FUND LIMITED PARTNERSHIP
By: Primus Venture Partners IV Limited Partnership, its
general partner
By: Primus Venture Partners IV, Inc., its general partner
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
