Exhibit 4.2
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
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This Second Amended and Restated Investors' Rights Agreement (this
"Agreement") is made and entered into as of April 30, 1999 by and among Cobalt
Networks, Inc. (the "Company"), the undersigned holders of capital stock or
warrants to purchase capital stock of the Company (the "Investors"), and the
undersigned purchasers of Series C Preferred Stock of the Company (the
"Purchasers"). The Investors, other holders of registration and other rights
under the Prior Agreement (as defined below), and the Purchasers are sometimes
collectively referred to as the "Shareholders". The names of the Investors and
the Purchasers are set forth on the Schedule of Investors and Purchasers
attached hereto as Schedule A.
RECITALS:
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A. The Company will issue to the Purchasers an aggregate of up to
9,813,507 shares of Series C Preferred Stock pursuant to a Series C Preferred
Stock Purchase Agreement dated as of April 30, 1999 (the "Series C Agreement").
B. The Purchasers have required that certain registration and other
rights be granted to them with respect to the securities of the Company to be
acquired.
C. The Investors hold a majority of the shares of Series A Preferred
Stock of the Company, or warrants to purchase shares of Series A Preferred Stock
and Series B Preferred Stock of the Company, enjoying certain registration
rights and rights regarding receipt of information pursuant to an Amended and
Restated Investors' Rights Agreement dated as of July 2, 1998 (the "Prior
Agreement"). The Investors wish to terminate all rights under the Prior
Agreement and have such rights superseded in their entirety by the rights
provided under this Agreement and wish to have this Agreement supersede and
replace the Prior Agreement in its entirety.
AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, the parties agree as follows:
1. Restrictions on Transfer; Registration Rights.
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1.1 Definitions. As used herein:
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(a) The terms "register", "registered" and "registration" refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "Securities Act"),
and the declaration or ordering of the effectiveness of such registration
statement.
(b) For the purposes hereof, the term "Registrable Securities"
means shares of (i) any and all Common Stock of the Company issued or issuable
upon conversion of shares of the Series A Preferred Stock of the Company issued
pursuant to the Series A Preferred Stock Purchase
Agreement dated as of August 29, 1997 between the Company and the parties
thereto, which have not been previously resold to the public in a registered
public offering, (ii) any and all Common Stock of the Company issued or issuable
upon conversion of up to 163,500 shares of the Series A Preferred Stock of the
Company issued or issuable upon exercise of the warrants to purchase shares of
Series A Preferred Stock listed on Exhibit A, which have not been previously
resold to the public in a registered public offering, (iii) any and all Common
Stock of the Company issued or issuable upon conversion of shares of the Series
B Preferred Stock of the Company issued pursuant to the Series B Preferred Stock
Purchase Agreement dated July 2, 1998, which have not been previously resold to
the public in a registered public offering, (iv) any and all Common Stock of the
Company issued or issuable upon conversion of up to 41,612 shares of the Series
B Preferred Stock of the Company issued or issuable upon exercise of certain
warrants issued in connection with the sale of the Series B Preferred Stock (the
"Bridge Financing Warrants"), which have not been previously resold to the
public in a registered public offering, (v) any and all Common Stock of the
Company issued or issuable upon conversion of up to 320,945 shares of the Series
C Preferred Stock of the Company issued or issuable upon exercise of certain
warrants issued in connection with the sale of the Series C Preferred Stock (the
"C Bridge Financing Warrants"), which have not been previously resold to the
public in a registered public offering, (vi) any and all Common Stock of the
Company issued or issable upon exercise of certain warrants issued to the
placement agent of the Company in connection with the sale of the Series C
Preferred Stock (the "Placement Agent's Warrants"), (vii) any and all Common
Stock of the Company issued or issuable upon conversion of shares of the Series
C Preferred Stock of the Company issued pursuant to the Series C Agreement,
which have not been previously resold to the public in a registered public
offering, (viii) stock issued with respect to or in any exchange for or in
replacement of stock included in subparagraphs (i), (ii), (iii), (iv), (v),
(vi), (vii) and (viii) above which have not been previously resold to the public
in a registered public offering, and (ix) stock issued in respect of the stock
referred to in (i), (ii), (iii), (iv), (v), (vi), (vii) and (viii) above as a
result of a stock split, stock dividend or the like, which have not been
previously resold to the public in a registered public offering.
(c) The terms "Holder" or "Holders" mean any person or persons to
whom Registrable Securities were originally issued and who execute this
Agreement or qualifying transferees under Section 3 hereof who hold Registrable
Securities.
(d) The term "Initiating Holders" means any Holder or Holders of in
the aggregate at least 40% of the Registrable Securities which have not been
previously resold to the public in a registered public offering.
(e) The term "Majority Participating Holders" means Holders of a
majority of Registrable Securities proposed to be included in any particular
registration.
1.2 Requested Registration.
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(a) Request for Registration. In case the Company shall receive from
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the Initiating Holders a written request that the Company effect any
registration with respect to all or a part of the Registrable Securities, the
Company will:
(i) within ten (10) days after its receipt thereof give written
notice of the proposed registration to all other Holders; and
(ii) as soon as practicable, use its best efforts to effect such
registration (including, without limitation, preparation of a registration
statement and prospectus complying
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as to form with the requirements of the Securities Act, the execution of an
undertaking to file post-effective amendments, appropriate qualifications
under the applicable blue sky or other state securities laws and
appropriate compliance with exemptive regulations issued under the
Securities Act and any other governmental requirements or regulations) as
may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Holder's or Holders'
Registrable Securities as is specified in such request, together with all
or such portion of the Registrable Securities of any Holder or Holders
joining in such request as are specified in a written request given within
twenty (20) days after receipt of such written notice from the Company;
provided, that the Company shall not be obligated to take any action to
effect such registration pursuant to this Section 1.2:
(A) Prior to the earlier of (1) June 30, 2001 or (2) six
months following the effective date of the Company's first registered
offering to the general public of its securities for its own account;
or
(B) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process
in effecting such registration; or
(C) After the Company has effected two such registrations
pursuant to this subsection 1.2(a) and such registration has been
declared or ordered effective for the period set forth in Section
1.6(a); or
(D) If the Registrable Securities to be registered have an
anticipated offering price to the public of less than $10,000,000.
Subject to the foregoing clauses (A) through (D), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practical, but in any event within ninety (90) days after
receipt of the request or requests of the Initiating Holders; provided, however,
that if the Company shall furnish to such Holders a certificate signed by the
President or Chief Executive Officer of the Company stating that in the good
faith judgment of the Board of Directors it would materially interfere with the
Company and its business for such registration statement to be filed at the date
filing would be required and it is therefore essential to defer the filing of
such registration statement, the Company shall be entitled to delay the filing
of such registration statement not more than once for an additional period of up
to one hundred twenty (120) days.
(b) Underwriting. If the Majority Participating Holders intend to
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distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to Section 1.2 and the Company shall include such information in the
written notice referred to in subsection 1.2(a)(i). The right of any Holder to
registration pursuant to Section 1.2 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. The Company shall (together with all Holders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by a majority in interest of the Holders
participating in such registration, provided, however, that the managing
underwriter shall be approved by
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the Company, which approval shall not be unreasonably withheld. Notwithstanding
any other provision of this Section 1.2, if the underwriter advises the Majority
Participating Holders in writing that marketing factors require a limitation of
the number of shares to be underwritten, the Majority Participating Holders
shall so advise all Holders of Registrable Securities who have elected to
participate in such offering, and the number of shares of Registrable Securities
that may be included in the registration and underwriting shall be allocated
among all such Holders thereof in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities held by such Holders. If any Holder
of Registrable Securities disapproves of the terms of the underwriting, he may
elect to withdraw therefrom by written notice to the Company, the underwriter
and the Majority Participating Holders. Any Registrable Securities which are
excluded from the underwriting by reason of the underwriter's marketing
limitation or withdrawn from such underwriting shall be withdrawn from such
registration. If the underwriter has not limited the number of Registrable
Securities to be underwritten, the Company may include securities for its own
account (or for the account of employees and other holders, at the Company's
sole discretion) in such registration if the underwriter so agrees and if the
number of Registrable Securities which would otherwise have been included in
such registration and underwriting will not thereby be limited by the
underwriter.
1.3 Company Registration.
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(a) Right to Include. If at any time or from time to time the
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Company proposes to register any of its securities for its own account or the
account of any of its shareholders other than the Holders (other than a
registration relating solely to employee stock option or purchase plans, or a
registration relating solely to an SEC Rule 145 transaction, or a registration
on any other form, (other than Form X-0, X-0, X-0, XX-0 or any successor to such
form) which does not include substantially the same information as would be
required to be included in a registration statement covering the sale of
Registrable Securities), the Company will:
(i) promptly give to each Holder written notice thereof;
and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance with applicable
laws), and in any underwriting involved therein, all the Registrable
Securities specified in a written request or requests made within twenty
(20) days after receipt of such written notice from the Company by any
Holder or Holders to be included in any such registration, except as set
forth in subsection 1.3(b) below.
(b) Underwriting. If the registration of which the Company gives
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notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to subsection 1.3(a)(i). In such event the right of any Holder to
registration pursuant to Section 1.3 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 1.3, if the
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the underwriter may limit the number of
Registrable Securities to be included in the registration and underwriting (i)
completely, in the case of the Company's initial public offering, or (ii) to not
less than 20% of the shares to be included in any other registration that is
solely for the account of the Company; provided, that in each case, the
registration does not include shares of any other selling
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shareholder In the event of a cutback by the underwriters of the number of
Registrable Securities to be included in the registration and underwriting, the
Company shall advise all Holders of Registrable Securities which would otherwise
be registered and underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the registration and underwriting
shall be allocated among all of such Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such
Holders. If any Holder disapproves of the terms of any such underwriting, he may
elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
1.4 Form S-3. After its initial public offering, the Company shall
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use its best efforts to qualify for registration on Form S-3 or any comparable
or successor form. After the Company has qualified for the use of Form S-3,
Holders of the outstanding Registrable Securities shall have the right to
request unlimited registrations on Form S-3 (such requests shall be in writing
and shall state the number of shares of Registrable Securities to be disposed of
and the intended method of disposition of Shares by such Holders), subject only
to the following:
(a) The Company shall not be required to effect a registration
pursuant to this Section 1.4 within one hundred twenty (120) days of the
effective date of any registration referred to in Sections 1.2 or 1.3 above.
(b) The Company shall not be required to effect a registration
pursuant to this Section 1.4 unless the Holder or Holders requesting
registration propose to dispose of shares of Registrable Securities having an
aggregate disposition price (before deduction of underwriting discounts and
expenses of sale) of at least $1,500,000.
(c) The Company shall not be required to effect more than two
(2) registrations pursuant to this Section 1.4 in any consecutive twelve (12)
month period.
The Company shall promptly give written notice to all Holders of
Registrable Securities of the receipt of a request for registration pursuant to
this Section 1.4 and shall provide a reasonable opportunity for other Holders to
participate in the registration, provided that if the registration is for an
underwritten offering, the terms of subsection 1.2(b) shall apply to all
participants in such offering. Subject to the foregoing, the Company will use
its best efforts to effect as promptly as practicable the registration of all
shares of Registrable Securities on Form S-3 to the extent requested by the
Holder or Holders thereof for purposes of disposition; provided, however, that
if the Company shall furnish to such Holders a certificate signed by the
President or Chief Executive Officer of the Company stating that in the good
faith judgement of the Board of Directors it would materially interfere with the
Company and its business for such registration statement to be filed at the date
filing would be required and it is therefore essential to defer the filing of
such registration statement, the Company shall be entitled to delay the filing
of such registration statement for such a period that the Board determines in
good faith to be necessary, which in no event shall exceed, one hundred twenty
(120) days. Any registration pursuant to this Section 1.4 shall not be counted
as a registration pursuant to Section 1.2.
1.5 Expenses of Registration. All expenses incurred in connection
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with any registration, qualification or compliance pursuant to this Section 1,
including without limitation, all registration, filing and qualification fees,
printing expenses, exchange or NASDAQ listing fees, fees and disbursements of
counsel for the Company and fees and expenses of any special audits incidental
to or required by such registration, shall be borne by the Company except as
follows:
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(a) The Company shall not be required to pay for expenses of any
registration proceeding begun pursuant to Section 1.2 or 1.4, the request for
which has been subsequently withdrawn by the Majority Participating Holders
(other than as a result of the Company's deferral, in which such case, such
expenses shall be borne by the Holders requesting such withdrawal); provided,
however, that in lieu of paying such expenses the Majority Participating Holders
may elect to forfeit their right to request one registration pursuant to Section
1.2; provided further, however, that if at the time of such withdrawal the
Holders have learned of a material adverse change in the business, condition or
prospects of the Company from that known to the Holders at the time of their
request and have withdrawn the request with reasonable promptness following
disclosure by the Company of such change, then the Holders shall not be required
to pay any such expenses and shall retain their rights to such registration
pursuant to Section 1.2.
(b) The Company shall not be required to pay fees of legal counsel of
a Holder except for a single counsel acting on behalf of all selling Holders
(which counsel shall also be counsel to the Company unless counsel to the
Company has a conflict of interest with respect to the representation of any
selling Holder or the underwriters object to the selling Holders' representation
by Company counsel).
(c) The Company shall not be required to pay underwriters' fees,
discounts or commissions relating to the Registrable Securities.
1.6 Registration Procedures. In the case of each registration,
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qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep each Holder participating therein advised in writing as to
the initiation of each registration, qualification and compliance and as to the
completion thereof. At its expense the Company will:
(a) Keep such registration, qualification or compliance pursuant to
Sections 1.2, 1.3 or 1.4 effective for a period of one hundred eighty (180) days
or until the Holder or Holders have completed the distribution described in the
registration statement relating thereto, whichever first occurs;
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement;
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of the Registrable Securities owned by them;
(d) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act or the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;
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(e) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such United States jurisdictions as shall be reasonably requested by the
Holders; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(f) Cause all such Registrable Securities registered under this
Section 1 to be listed on each securities exchange or reporting system on which
similar securities issued by the Company are then listed; and
(g) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Section 1, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with such registration, if such securities are being sold through underwriters
or, if such securities are not being sold through underwriters, on the date that
the registration statement with respect to such securities becomes effective,
(i) an opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities,
and (ii) a letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities.
1.7 Indemnification.
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(a) The Company will indemnify and hold harmless each Holder of
Registrable Securities, each of its officers, directors and partners, and each
person controlling such Holder, with respect to which such registration,
qualification or compliance has been effected pursuant to this Agreement, and
each underwriter, if any, and each person who controls any underwriter of the
Registrable Securities held by or issuable to such Holder, against all claims,
losses, expenses, damages and liabilities (or actions in respect thereto)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any preliminary or final prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation or alleged violation by the Company
relating to action or inaction required of the Company in connection with the
Securities Act, any rule or regulation promulgated under the Securities Act or
any state securities law applicable to the Company and will reimburse (on an as
incurred basis) each such Holder, each of its officers, directors and partners,
and each person controlling such Holder, each such underwriter and each person
who controls any such underwriter, for any reasonable legal and any other
expenses incurred in connection with investigating, defending or settling any
such claim, loss, damage, liability or action; provided, however, that the
Company will not be liable to a Holder to the extent that any such claim, loss,
damage or liability arises out of or is based on any untrue statement or
omission based upon written information furnished to the Company in an
instrument duly executed by such Holder specifically for use therein and will
not be liable to an underwriter to the extent that any such claim, loss, damage
or liability arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company in an instrument duly executed
by such underwriter specifically for use therein, and provided further that the
agreement of the Company to indemnify any
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underwriter and any person who controls such underwriter contained herein with
respect to any such preliminary prospectus shall not inure to the benefit of any
underwriter, from whom the person asserting any such claim, loss, damage,
liability or action purchased the stock which is the subject thereof, if at or
prior to the written confirmation of the sale of such stock, a copy of the
prospectus (or the prospectus as amended or supplemented) was not sent or
delivered to such person, excluding the documents incorporated therein by
reference, and the untrue statement or omission of a material fact contained in
such preliminary prospectus was corrected in the prospectus (or the prospectus
as amended or supplemented).
(b) Each Holder will, if Registrable Securities held by or issuable
to such Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify and hold harmless the
Company, each of its directors and officers, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company within the meaning of the Securities Act, and each other
such Holder, each of its officers, directors and partners and each person
controlling such Holder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) by such Holder of a material fact
contained in any preliminary or final prospectus, offering circular or other
document (including any related registration statement, notification or the
like) incident to any such registration, qualification or compliance or based on
any omission (or alleged omission) by such Holder to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse (on an as incurred basis) the Company, such
Holders, such directors, officers, partners, persons or underwriters for any
reasonable legal or any other expenses incurred in connection with
investigating, defending or settling any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) by such Holder or omission (or alleged
omission) by such Holder is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in conformity with
written information furnished to the Company in an instrument duly executed by
such Holder specifically for use therein, and provided further that the
agreement of such Holder to indemnify any underwriter and any person who
controls such underwriter contained herein with respect to any such preliminary
prospectus shall not inure to the benefit of any underwriter, from whom the
person asserting any such claim, loss, damage, liability or action purchased the
stock which is the subject thereof, if at or prior to the written confirmation
of the sale of such stock, a copy of the prospectus (or the prospectus as
amended or supplemented) was not sent or delivered to such person, excluding the
documents incorporated therein by reference, and the untrue statement or
omission of a material fact contained in such preliminary prospectus was
corrected in the prospectus (or the prospectus as amended or supplemented).
Notwithstanding the foregoing, in no event shall the indemnification provided by
any Holder hereunder exceed the gross proceeds received by such Holder for the
sale of such Holder's securities pursuant to such registration.
(c) Each party entitled to indemnification under this Section 1.7
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual know ledge of any claim as to which indemnity may be sought. The
Indemnified Party shall promptly permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or litigation, shall be approved by the Indemnified Party (whose approval shall
not be unreasonably be withheld). The Indemnified Party may participate in such
defense and hire counsel at such party's own expense (or at the Indemnifying
Party's expense, in the event that a conflict of interest exists between
Indemnifying Party's counsel and the Indemnified Party's counsel). The failure
of any Indemnified Party to give notice as provided herein
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shall not relieve the Indemnifying Party of its obligations hereunder, unless,
and only to the extent that, such failure is materially prejudicial to an
Indemnifying Party's ability to defend such action. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent of
the Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Any Indemnified Party shall
reasonably cooperate with the Indemnifying Party in the defense of any claim or
litigation brought against such Indemnified Party.
If the indemnification provided for in this Section 1.7 is for any reason
not available to an Indemnified Party with respect to any loss, liability,
claim, damage, or expense referred to therein, then the Indemnifying Party, in
lieu of indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
liability, claim, damage, or expense in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statements or omissions
that resulted in such loss, liability, claim, damage, or expense as will as any
other relevant equitable considerations. The relative fault of the Indemnifying
Party and of the Indemnified Party shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
1.8 Lock-Up Provision. Upon receipt of a written request by the
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Company or by its underwriters, the Holders shall not sell, sell short, grant an
option to buy, or otherwise dispose of shares of the Company's Common Stock or
other securities convertible into or exchangable for the Company's Common Stock,
in each case where such securities have been acquired by the Holders prior to
the initial registration of the Company's Common Stock (except for any such
shares included in the registration) for a period of one hundred eighty (180)
days following the effective date of the initial registration of the Company's
securities (other than any transfer of shares as a bona fide gift or gifts, or
by will or intestacy or, if the Holder is a partnership or corporation, any
distribution by such partnership or corporation to its partners or
shareholders); provided, however, that such Holder shall have no obligation to
enter into the agreement described in this Section 1.8 unless all executive
officers and directors of the Company and all other Holders and holders of other
registration rights from the Company enter into similar agreements. The Company
may impose stop-transfer instructions with respect to the shares (or securities)
subject to the foregoing restriction until the end of said one hundred eighty
(180) day period.
1.9 Information by Holder. The Holder or Holders of Registrable
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Securities included in any registration shall promptly furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
1.10 Rule 144 Reporting.
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(a) With a view to making available to Holders of Registrable
Securities the benefits of certain rules and regulations of the Securities and
Exchange Commission (the "SEC") which may permit the sale of the Registrable
Securities to the public without registration, at all times after ninety (90)
days after the effective date of the first registration filed by the Company for
an offering of its securities to the general public the Company agrees to:
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(i) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144 under the Securities Act;
(ii) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
(iii) So long as a Holder owns any Registrable Securities, to
furnish to such Holder forthwith upon such Holder's request a written
statement by the Company as to its compliance with the reporting
requirements of said Rule 144 (at any time after ninety (90) days after the
effective date of the first registration statement filed by the Company for
an offering of its securities to the public), and of the Securities Act and
the Exchange Act (at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company as
such Holder may reasonably request in availing itself of any rule or
regulation of the SEC allowing such Holder to sell any such securities
without registration.
1.11 Limitations on Subsequent Registration Rights. From and after
---------------------------------------------
the date of this Agreement, the Company shall not, without the prior written
consent of the Holders of a majority of the outstanding Registrable Securities,
enter into any agreement with any holder or prospective holder of any securities
of the Company which would allow such holder or prospective holder (a) to
include such securities in any registration filed under Section 1.2, 1.3 or 1.4
hereof, unless under the terms of such agreement, such holder or prospective
holder may include such securities in any such registration only to the extent
that the inclusion of its securities will not reduce the amount of the
Registrable Securities of the Holders which is included or (b) to make a demand
registration which (i) could result in such registration statement being
declared effective prior to the earlier of either of the dates set forth in
subsection 1.2(a)(ii)(A) or (ii) would result in the registration of such
parties' securities to the exclusion of any securities requested to be included
in such registration under Section 1.3 hereof.
1.12 Termination. The rights of a Holder under this Agreement shall
-----------
terminate on the earlier of the date on which a Holder can sell all of its
Registrable Securities without registration pursuant to Rule 144 within a three
(3) month period, unless at the time the Holder's Registrable Securities
represent more than 1% of the outstanding capital stock of the Company or five
years following the effective date of the Company's first registered offering to
the general public of its securities for its own account.
1.13 Cooperation of Other Purchasers. (a) Each Purchaser agrees to
-------------------------------
cooperate with the Company in all reasonable respects in complying with the
terms and provisions of the Sideletter between the Company and Chase Venture
Capital Associates, LP, ("Investor"), as amended by the Amendment thereto dated
as of the date hereof, a copy of which Sideletter Amendment is attached hereto
as Exhibit B, regarding small business matters, including without limitation,
---------
voting to approve amending the Company's Articles of Incorporation, the
Company's bylaws or this Agreement in a manner reasonably requested by Investor
or any Regulated Holder (as defined in the Sideletter) entitled to make such
request pursuant to the Sideletter. Anything contained in this Section 1.13 to
the contrary notwithstanding, no Purchaser shall be required under this Section
1.13 to take any action that would adversely affect in any material respect such
Purchaser's rights under this Agreement or as a shareholder of the Company.
-10-
(b) Covenant Not to Amend. The Company and each Purchaser agree not
---------------------
to amend or waive the voting or other provisions of the Company's Articles of
Incorporation, the Company's bylaws or this Agreement if such amendment or
waiver would cause any Regulated Holder to have a Regulatory Problem (as defined
in the Sideletter), provided that any such Purchaser notifies the Company that
it would have a Regulatory Problem promptly after it has notice of such
amendment or waiver.
2. Covenants of the Company.
------------------------
2.1 Financial Information. So long as a Shareholder and its
---------------------
affiliates (as the term "affiliate" is defined under Regulation D of the
Securities Act) continue to hold at least 50,000 shares of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock or shares of Common
Stock issued upon conversion of Series A Preferred Stock, Series B Preferred
Stock or Series C Preferred Stock (collectively, the "Securities"), the Company
will furnish the following information to the Shareholder:
(a) Annual Financials. As soon as practicable after the end of
-----------------
each fiscal year, and in any event within one hundred twenty (120) days
thereafter, the Company will provide the Shareholder with consolidated balance
sheets of the Company and its subsidiaries, if any, as at the end of such fiscal
year, and consolidated statements of operations and consolidated statements of
cash flows of the Company and its subsidiaries, if any, for such year, prepared
in accordance with generally accepted accounting principles, all in reasonable
detail, certified by independent public auditors of recognized national standing
selected by the Company, and accompanied by management's discussion and analysis
thereof.
(b) Quarterly Financials. As soon as practicable after the end
--------------------
of each fiscal quarter (except the fourth fiscal quarter), and in any event
within forty-five (45) days of each fiscal quarter, the Company will provide the
Shareholder with consolidated balance sheets of the Company and its
subsidiaries, if any, as at the end of such fiscal month or quarter, and
consolidated statements of operations and consolidated statements of cash flows
of the Company and its subsidiaries, if any, for such month or quarter, prepared
in accordance with generally accepted accounting principles (except for required
footnotes and for minor year-end adjustments), all in reasonable detail,
certified by the chief financial officer of the Company and accompanied by
management's discussion and analysis thereof.
2.2 Additional Information. So long as a Shareholder (together with
----------------------
permitted assigns and its affiliates (as the term "affiliate" is defined under
Regulation D of the Securities Act) continues to hold at least 2.5% of the
Company's outstanding capital stock, such Shareholder shall be entitled to visit
and inspect the Company's properties to examine its books of account and to
discuss its affairs with management personnel, all at such reasonable times
during normal business hours as may be requested by such Shareholder.
2.3 Observer Rights. As long as Chase Venture Capital Associates, LP
---------------
and its affiliates (as the term "affiliate" is defined in Regulation D of the
Securities Act) hold at least 250,000 shares of Preferred Stock, it shall have
the right to attend all meetings of the Board of Directors in a nonvoting
observer capacity, to receive notice of such meetings and to receive the
information provided by the Company to the Board of Directors.
2.4 Confidentiality of Information. All information obtained by a
------------------------------
Shareholder pursuant to Section 2.1, 2.2 and 2.3 shall be deemed proprietary and
confidential to the Company and will not be disclosed by a Shareholder to any
person or entity without the prior written consent of the
-11-
Company. This restriction shall not apply to information which (a) is
previously, or becomes, known to the public, except by breach of this Agreement
by such Shareholder or other similar agreement by such Shareholder regarding
confidential information, (b) was in Shareholder's possession at the time of
disclosure without obligation of confidentiality, (c) was received by the
Shareholder from a third party without similar restrictions and, to the
knowledge of such Shareholder, without breach of any obligation of
confidentiality owed to the disclosing party, (d) was developed independently by
the Shareholder without reference to the Company's confidential information, or
(e) which is disclosed pursuant to a governmental regulation or order, provided
that prior to disclosure the disclosing party notifies the Company of such
proposed disclosure in order to permit the Company to seek confidential
treatment of such information.
2.5 Employee Stock Purchase and Option Agreements. The Company
---------------------------------------------
agrees that it will utilize, in connection with any stock purchase or stock
option agreements entered into with officers, directors, employees or
consultants pursuant to equity incentive plans adopted by the Board of Directors
of the Company, vesting provisions providing in substance that such stock or
options shall vest at the rate of 25% of such shares one year after the option
grant date (which will be no earlier than the date of hire or appointment) and
1/48th of the shares monthly thereafter; provided, however, such vesting rate
may be changed or accelerated if unanimously approved by the Company's Board of
Directors. In addition, each such stock purchase or stock option agreement
shall contain a "market stand-off" provision, pursuant to which the recipient of
stock pursuant to such agreement will agree, upon request, not to sell or
otherwise transfer any securities of the Company during a period of up to one
hundred eighty (180) days following the effective date of the initial
registration statement pursuant to which the Company registers shares of its
Common Stock for sale to the public and any other registration statement filed
within three (3) years of such initial statement.
2.6 Directors and Officers Liability Insurance. The Company shall
------------------------------------------
procure and maintain adequate directors and officers liability insurance, to the
extent available, for the protection of the Company's directors.
2.7 Net Worth. The Company will not suffer or permit Net Worth
---------
(defined below) at any time to be less than $1,000,000. "Net Worth" means the
excess (as determined in accordance with generally accepted accounting
principles) of the value of the assets of the Company (after deducting all
applicable valuation reserves) over the liabilities of the Company, all on a
consolidated basis as reflected on the books and records of the Company.
2.8 Special Board of Directors Approval for Joint Ventures. The
------------------------------------------------------
approval of two thirds of the members of the Company's Board of Directors shall
be required to enter into a joint venture with respect to the Company's business
operations.
2.9 Termination of Covenants. The Company's obligation to deliver
------------------------
the information required under subsections 2.1 (a) and (b) and under Section 2.2
and to provide the rights set forth in subsection 2.3 above shall terminate upon
the date on which the Company is required to file a report with the SEC pursuant
to Section 13(a) of the Exchange Act by reason of the Company having registered
any of its securities pursuant to Section 12(g) of the Exchange Act.
3. Right to Maintain.
-----------------
3.1 "New Securities". For purposes of this Section 3, the term "New
--------------
Securities" shall mean shares of Common Stock, Preferred Stock or any other
class of capital stock of the Company,
-12-
whether or not now authorized, securities of any type that are convertible into
shares of such capital stock, and options, warrants or rights to acquire shares
of such capital stock. Notwithstanding the foregoing, the term "New Securities"
will not include (a) securities issuable upon conversion of the Series A
Preferred Stock, Series B Preferred Stock or Series C Preferred Stock; (b)
securities issued in connection with bona fide equipment lease or working
capital debt financings with lending institutions approved by the Company's
Board of Directors; (c) securities offered to the public pursuant to a
registration statement filed under the Securities Act; (d) securities issued to
the sellers of a corporation pursuant to the acquisition of such corporation by
the Company by merger, purchase of substantially all of the assets, or other
reorganization whereby the Company owns not less than 51% of the voting power of
such corporation; (e) up to an aggregate of 805,812 shares of Common Stock (or
related options or warrants) issued or issuable at any time to employees or
consultants of the Company for compensation purposes, pursuant to any stock
offering, plan or arrangement approved by the Board of Directors (which maximum
aggregate amount shall be deemed to be increased for purposes of this Section
3.1(e) if any additional issuances above such amount (x) are approved by the
Board of Directors with the approval of the directors elected in accordance with
Sections 3(b)(i) and (ii) of the Company's Amended and Restated Articles of
Incorporation in the first year following the date of this Agreement or (y) are
approved by the Board of Directors at any time following the first anniversary
of the date of this Agreement); (f) securities issued upon exercise or
conversion of options, warrants and other convertible securities outstanding on
the date hereof and described in the Series C Agreement or the Schedules
thereto; (g) shares of Common Stock or Preferred Stock issued in connection with
any stock split, stock dividend or recapitalization by the Company; and (h) any
security if holders of at least 66 2/3 % of the outstanding shares of Preferred
Stock consent in writing that the rights under this Section 3 shall not apply to
such securities.
3.2 Grant of Rights.
---------------
Subject to the terms specified in this Section 3, the Company hereby
grants to each Shareholder the right of first refusal to purchase a portion of
any issue of New Securities which the Company hereafter may from time to time
propose to issue and sell as shall maintain the Shareholder's pro rata
percentage ownership of the Company's capital stock. The "pro rata" percentage
ownership of a Shareholder is calculated by dividing (a) the number of shares of
Common Stock held by the Shareholder plus the total number of shares of Common
Stock issuable upon the conversion of all Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock then held by the Shareholder by (b)
the total number of shares of Common Stock then outstanding, including shares
issuable upon conversion of any Preferred Stock. For the purposes of the last
sentence of Section 3.3(a) below, "pro rata share" for a Shareholder electing to
purchase New Securities which are unsubscribed by the other Shareholders shall
be the percentage calculated by dividing (a) the number of shares of New
Securities subscribed for by such participating Shareholder by (b) the total
number of shares of New Securities subscribed for by all other participating
Shareholders.
3.3 Procedure.
---------
(a) In the event the Company proposes to undertake an issuance
of New Securities, it shall give the Shareholders written notice of its
intention, describing the type of New Securities, the proposed purchasers, the
price and all other material terms upon which the Company proposes to issue the
same. A Shareholder shall have thirty (30) days from the date of receipt of any
such notice to agree to purchase up to its pro rata share of such New Securities
for the price and upon the terms specified in the Company's notice by giving
written notice to the Company to such effect and stating therein the quantity of
New Securities to be purchased. In addition, a Shareholder may elect in
-13-
such thirty (30) day period to purchase its pro rata share (as determined in
Section 3.2) of any New Securities which are unsubscribed by the other
Shareholders, and this process shall be repeated until all New Securities are
subscribed for or no Shareholder wishes to purchase any additional New
Securities.
(b) In the event a Shareholder fails to exercise its right to
purchase its pro rata share of the New Securities within such thirty (30) day
period, the Company shall have ninety (90) days thereafter to sell or enter into
an agreement to sell any New Securities not purchased by Shareholders exercising
their rights at a price and upon terms no more favorable to the purchaser than
the terms specified in the Company's notice to the Shareholders, after which
ninety (90) day period the Company shall not thereafter sell such New Securities
without first offering a portion to the Shareholders in accordance with this
Section 3.
3.4 Expiration. The rights granted under this Section 3 shall expire
----------
as to all Shareholders, upon the closing of a public offering which, under the
terms of the Company's Articles of Incorporation as then in effect, shall cause
the automatic conversion of all shares of the Company's Preferred Stock into
Common Stock.
3.5 Consent. The Investors, who hold a majority of the outstanding
-------
shares of Series A Preferred Stock and Series B Preferred Stock, hereby consent
that the rights under Section 3 of the Prior Agreement shall not apply to ( i)
the issuance of shares of Series C Preferred Stock pursuant to the Series C
Agreement (ii) to the issuance of up to $5,000,000 principal amount of 6%
convertible promissory notes and the C Bridge Financing Warrants and (iii) the
Placement Agent's Warrants.
3.6 Termination of Prior Agreement. The Investors, who hold a
------------------------------
majority of the outstanding shares of Series A Preferred Stock and Series B
Preferred Stock, hereby agree that all rights under the Prior Agreement are
hereby terminated and superseded by the rights provided under this Agreement,
which Agreement supersedes and replaces the Prior Agreement in its entirety.
4. Assignment of Rights. The rights granted pursuant to this Agreement
--------------------
may be assigned by a Shareholder or its transferee upon sale or transfer (other
than a sale to the public) of at least 250,000 shares of Registrable Securities
(as adjusted for stock dividends, stock splits, recapitalizations and the like)
held by a Shareholder, or in connection with any transfer or assignment by a
Shareholder of any number of shares to (a) any partner, retired partner or
shareholder of such Shareholder or any transfer to spouses and ancestors, lineal
descendants and siblings of such partners or shareholders or spouses who acquire
Registrable Securities by gift, will, intestate succession or otherwise or (b)
to any affiliate of a Shareholder (as the term "affiliate" is defined under
Regulation D of the Securities Act), provided that such rights may not be
assigned to a transferee which the Company reasonably believes is a competitor
or intends to become a competitor of the Company and provided further that the
Company is given prompt notice of such transfer and any such transferee shall
agree to become subject to the obligations of the Shareholders under this
Agreement.
5. Designated Default. If the Company at any time or from time to time
------------------
(a) fails to satisfy the covenant set forth in Section 2.7 or (b) fails to
redeem all Redemption Shares (as defined in Article III, Section 7 of the
Company's Restated Articles of Incorporation as required under Article III,
Section 7 of the Company's Restated Articles of Incorporation, the Shareholders
holding 66 2/3% of the shares of Preferred Stock shall have a right to declare a
default by the Company (a "Designated Default") by delivery of written notice to
the Company. Upon the declaration of a Designated Default, the authorized
number of directors comprising the Company's Board of Directors shall be
increased and such additional
-14-
directors shall be elected in accordance with Section 3(c) of the Company's
Restated Articles of Incorporation.
6. Miscellaneous.
-------------
6.1 Amendment or Waiver. Any term of this Agreement may be amended
-------------------
and the observance of any such term may be waived (either generally or in a
particular instance and either retroactively or prospectively) with the written
consent of the Company and Holders holding at least a majority of the
outstanding Registrable Securities. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon the parties hereto and
their successors and assigns, provided that no amendment, waiver or modification
may discriminate against a Holder without such Holder's consent.
6.2 Governing Law. This Agreement shall be governed in all respects
-------------
by the laws of the State of California as such laws are applied to agreements
between California residents entered into and to be performed entirely within
California.
6.3 Entire Agreement. This Agreement constitutes the full and entire
----------------
understanding and agreement between the parties with respect to the subject
hereof and it supersedes, merges, and renders void any and all prior
understandings and/or agreements, written or oral, with respect to such subject
matter.
6.4 Notices. All notices and other communications required or
-------
permitted hereunder shall be in writing and shall be personally delivered,
mailed by certified or registered mail, postage prepaid, or delivered by
overnight delivery or express courier, addressed to the Holders at their
addresses shown on the records of the Company or, to the Company, at its
principal executive office, or at such other address as the Company or any
Holder shall hereafter furnish in writing. All notices that are mailed shall be
deemed delivered five (5) days after deposit in the United States mail.
6.5 Severability. In case any provision of this Agreement shall be
------------
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
6.6 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
6.7 Attorney's Fees. If any legal action is necessary to enforce or
---------------
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
-15-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
COBALT NETWORKS, INC.
By:__________________________________________
Title:_______________________________________
PURCHASERS:
_____________________________________________
[print name of Purchaser]
By:__________________________________________
Title:_______________________________________
INVESTORS:
_____________________________________________
[print name of Investor]
By:__________________________________________
Title:_______________________________________
-16-
Schedule A
----------
List of Shareholders
--------------------
Investors:
---------
Series A Preferred Stock:
------------------------
Chase Venture Capital Associates, L.P.
TechFund Capital, L.P.
TechFund Capital Management, LLC
Xxxxx Xxxxxxxxxx
Xxxxxx X. & Xxxxx X. Xxxxx Family Trust dtd 12/13/93
Xxxxx X. Xxxxxxxx
Xxxxxx X. & Xxxxxxxxxx X. Xxxxxxx Trust dtd 4/28/95
Xxxxxx X. Xxxxxx
Exis, Inc.
Xxxx X. Xxxxxxxxxx
Vanguard V, L.P.
GCA Investments 97
Xxxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxxx X. & Xxxxx X. Xxxxxx Family Trust
Mitsui Comtek Corp.
Xxxx X. Xxx
Sobrato 1979 Revocable Trust
Xxxxx Xxx
Xxxxxxxx Xxxxx
Xxxxx Xxxxx
Series A Preferred Stock Warrants:
---------------------------------
Xxxxx X. & Xxxxx X. Xxxxxx Family Trust
Xxxxx Xxxxxxxxxx
Xxxxxx X. & Xxxxx X. Xxxxx Family Trust dtd 12/13/93
Xxxxx X. Xxxxxxxx
Xxxxxx X. & Xxxxxxxxxx X. Xxxxxxx Trust dtd 4/28/95
Xxxxxx X. Xxxxxx
Exis, Inc.
Xxxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxx X. Xxxxxxxxxx
Xxxxxx Xxxxxxxx
Xxxx X. Xxx
Sobrato 1979 Revocable Trust
Xxxxx Xxx
Xxxxxxxx Xxxxx
-17-
Series B Preferred Stock:
------------------------
Chase Venture Capital Associates, L.P.
Crystal Internet Venture Fund, L.P.
TechFund Capital, L.P.
NTT Leasing (U.S.A.), Inc.
Innovacom
Vanguard V, L.P.
Xxxxxxx XxXxxx
Xxxx Xxxxxxx
Xxx Xxxx
Xxxx Xxxxxxxxxxx
Xxxxxx X. Xxxx
Xxxxx Xxxxxxxxxx
Xxxxxx X. & Xxxxx X. Xxxxx dtd 12/13/93
Xxxxx X. Xxxxxxxx
Xxxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxxx X. & Xxxxx X. Xxxxxx Family Trust
Xxxx X. Xxx
Sobrato 1979 Revocable Trust
Xxxxx Xxx
Series B Preferred Stock Warrants:
---------------------------------
Xxxxxxx XxXxxx
Vanguard V, L.P.
Techfund Capital, L.P.
SCHEDULE OF PURCHASERS
----------------------
Chase Venture
Capital Associates, L.P.
000 Xxxxxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, XX 00000
Crystal Internet Venture Fund, L.P.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
TechFund Capital, L.P.
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
TechFund Capital Management, LLC
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
-18-
NTT Leasing (U.S.A.), Inc.
C/oC/o The Xxxxxxxx-Xxxx Corporation System, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Nissho Electronics/Nissho Electronics Corporation
Attn: Xxxxxx Xxxxxx
3-1Tsukiji 0, Xxxxx
Xxxx-xx, Xxxxx 000
Xxxxx
INNOVACOM
00 Xxx Xxxxxx
00000 Xxxxx
Xxxxxx
Vanguard V, L.P.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Xxxxxxx X. XxXxxx
Cobalt Networks, Inc.
000 Xxxxx Xx.
Xxxxxxxx Xxxx, XX 00000
Xxxxxx Xxxx
Cobalt Networks, Inc.
000 Xxxxx Xx.
Xxxxxxxx Xxxx, XX 00000
Xxxxxx Xxxxxxxxxx
Cobalt Networks, Inc.
000 Xxxxx Xx.
Xxxxxxxx Xxxx, XX 00000
SPLZ One Partners, LLC
00 Xxxxxx
Xxxx Xxxxxxx, Xxx Xxxx 00000
ABS Employees Venture Fund Limited Partnership
c/o Xxxxxxx X'Xxxxxxx
0 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000 .
August Capital
c/o Xxxx Xxxxxxxxx
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000-0000
-00-
Xxxxxxxxxx Xxxxxxxxxxx
c/o Xxxxxx Xxxxxxx
Xxxxxxxxx Xxxxxxx Xxxxx
00/00 Xxxxxxxxx Xxxxxxx
Xxxxxx, XX0X OBS.
Crown Advisors LTD
c/o Xxxxx Xxxxxx
The Lincoln Building
00 Xxxx 00xx Xx., Xxxxx 0000
Xxx Xxxx, XX 00000.
Essex Private Placement Fund, L.P.
c/o Xxxxx Xxxxxxxxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
GE Investments
c/o Xxxxxxx X. XxXxxxx
0000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
GGEP Coinvestment Partners, LLC
c/o Xxxxxxx X. Xxxxxxx (Xxxxxxx Global)
000 Xxxxx Xxxxx Xxxx
Xxx Xxxxxx, XX 00000
HLM/CB Fund LP
c/o Xx Xxxxxxx
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Xxxxxxxx Communications and Information Fund, Inc.
c/o Xxx Xxxxxxxx
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxxxxxxx Enterprise Fund
c/o Xxx Xxxxxx
0 Xxxxx Xxxxx Xxxxxx,00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Pequot Capital Management, Inc.
c/o Xxxxxx Xxxx
535 Madison Avenue, 25th floor
Xxx Xxxx, XX 00000
Rana Investment Company
-00-
x/x Xxxxxx Xxxxxxx
XX Xxx 00000
Xxxxxx, Xxxxxx Xxxxxx
Xxx Xxxxxxx Capital
c/o Xxxxxxx X. Xxx Xxxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Wakefield Partners, L.P.
c/o Xxxxxx Xxxxxxxxxx
00 Xxxx Xxxxxx Xxxx
Xxxx, XX 00000-0000
Xxxxxxxx, Xxxxx & Associates
c/o Xxxxxxx X. Xxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
HBA Partnership
c/o Xxxxxx Xxxxxx
0 Xxxxx Xxxxxxx Xxxx, #X-00
Xxxx Xxxxx, XX 00000
Cameron Xxxxx
Xxxx Building
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxx
0000 Xxxxx Xxxx
Xxx Xxxxxxxx, XX 00000
Xxxxxxx Berkeley
000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Pictet & Cie
x/x X. Xxxxxxxx
00 xx Xxxxxxx - Xxxxx
Xxxxxx, 0000 Xxxxxxxxxxx
Xxxxxxx X. Xxxxxx & Xxxxxxx X. Xxxxxx XX
c/o Xxxx Xxxxxx
000 Xxxxxxx Xxx., 0xx Xxxxx
Xxx Xxxx, XX 00000
-21-
Xxxxxxx X. Xxxxxx & Xxxxxxxx X. Xxxxxx
c/o Xxxx Xxxxxx
000 Xxxxxxx Xxx., 0xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxx X. Xxxxxxx
Xxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Xxxxx Xxxxx Revocable Trust
c/o Xxxx Person
0000 X. 00xx Xxxxxx
Xxxxx, XX 00000
The Hobe Sound Company
c/o Xxxxxx Xxxxxx
00000 Xxx Xxxxx Xxx
Xxxx Xxxxx, XX 00000
Xxxxx Xxxxxx/SAF
c/o Xxx Xxxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxx Xxxxxx Xxxxxx
x/x Xxx Xxxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
H. Xxxx Lunenburg
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Xxxxx Xxxxxx
000 X. 00xx Xxxxxx
Xxxxxxxx, XX 00000
Sherwood Manor Partners
c/o Xxxx X. Xxxxxxxx
00 Xxxxx Xxxxxxx
Xxx Xxxxx, XX 00000
Xxxxxx Xxxxxxx
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
-00-
Xxxxxxx Xxxxxxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Pacific Asset Partners
c/o Xxxxxx Xxxxxxxx
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Plough Penney Partners
c/o Xxxxxx Xxxxxxxxx
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxxxx
0000 Xxxxxxxxx
Xxxxxx, XX 00000
Xxxxxxx Xxxxxxxxxx
X.X. Xxx 000000
Xxxxxxx, XX 00000
Tennyson Private Placement Opportunity Fund
c/x Xxxxxxx Smullian & Xxxxxxxxxx
Attn: Xxxx Walpart
00 Xxxx Xxxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxxx Entities
c/o Xxxxx Xxxxxxx
Xxx Xxxxx Xxxxxx Xxxxx, 00xx xxxxx
Xxx Xxxx, XX 00000 .
Xxxxxx Xxxxxxx
Xxx Xxxxx Xxxxxx Xxxxx, 00xx xxxxx
Xxx Xxxx. XX 00000
Xxx Xxxxxxxxxxx
Xxxxxxxxxxx Associates, Inc.
000 Xxxxx Xxxxx, Xxxxxxxx 000, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Xxxxx Xxx
0000 00xx Xxxxxx, X.X.
Xxxxxx Xxxxxx, XX 00000
Xxxxxxx Xxxxxx
0000 Xxxxxxxxxxx Xx.
Xxxxxxxxxxxx, XX 00000
-23-
Xxxxxx X. Xxxx
C/o Xxxx Xxxxxxxxxx
00000 Xxxxxx Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Sumy Augustein
000 Xxxxxxxxx Xxxx
Xxxxxx Xxxx, XX 00000
Holder of Warrants to Purchase Common Stock:
--------------------------------------------
BT Alex.Xxxxx Incorporated
-24-
