EXHIBIT 10.9
INVESTORS RIGHTS AGREEMENT
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This Agreement is made as of May 4, 1999 by and among Avenue A, Inc., a
Washington corporation (the "Company"), the holders of the Company's Series C
Preferred Stock, Xxxxxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxxxx and R. Xxxxxxx
Xxx.
RECITAL
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Simultaneously herewith, the Company is entering into a Series C Preferred
Stock Purchase Agreement (the "Series C Agreement") and issuing shares of Series
C Preferred Stock to the Purchasers named in the Schedule of Investors to the
Series C Agreement.
NOW, THEREFORE, it is hereby agreed as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the 1933 Act.
"Common Stock" shall mean the Company's common stock, $0.01 par value.
"Conversion Stock" shall mean the shares of Common Stock issued or issuable
upon conversion of the Shares.
"Founder" shall mean each of Xxxxxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxxxx
and X.X. Xxx.
"Holder" shall mean the holders of Registrable Securities, securities
convertible into Registrable Securities or warrants to acquire Registrable
Securities or securities convertible into Registrable Securities and any person
holding such securities to whom the rights under this Agreement have been
transferred in accordance with Section 2.13 hereof.
"Initiating Holders" shall mean any Holder or Holders who in the aggregate
hold or have the power to acquire (through conversion or exercise of other
securities) at least 40% of all Registrable Securities (including, without
limitations, shares of Common Stock issuable on conversion of the Shares).
"Purchasers" shall mean the purchasers of Series C Preferred Stock,
excluding R. Xxxxxxx Xxx (such purchasers of Series C Preferred Stock are also
sometimes referred to as "Series C Purchasers").
"Registrable Securities" means (i) the Conversion Stock, and (ii) any
Common Stock of the Company issued or issuable with respect to, or in exchange
for or in replacement of the Conversion Stock or other securities convertible
into or exercisable for Conversion Stock upon any stock split, stock dividend,
recapitalization, or similar event; provided, however, that shares of Common
Stock or other securities shall only be treated as Registrable Securities if and
so long as they have not been (A) sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction (B) sold
in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions and restrictive legends with respect thereto are removed
upon the consummation of such sale, or (C) sold pursuant to Rule 144(k); and
provided, further, that excluded from the definition of "Registrable Securities"
are any securities transferred by a person or entity in any transaction in which
either (1) its registration rights under this Agreement are not assigned in
accordance with Section 2.13 or (2) notice of such assignment of registration
rights is not given by the transferor or assignor to the Company within 20 days
of such transfer or assignment in accordance with Section 2.13.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the 1933 Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses, except as otherwise stated
below, incurred by the Company in complying with Sections 2.5, 2.6 and 2.7
hereof, including, without limitation, all registration, qualification and
filing fees, printing expenses, escrow fees, fees and disbursements of counsel
for the Company, blue sky fees and expenses, the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company which shall be paid in any event by the
Company).
"Restricted Securities" shall mean the securities of the Company required
to bear the legend set forth in Section 2.2 hereof.
"1933 Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the Holders.
"Shares" shall mean the shares of the Company's Series C Preferred Stock
issued pursuant to the Series C Agreement.
2. Restrictions on Transferability of Securities: Compliance with 1933
Act; Registration Rights
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2.1 Restrictions on Transferability. The Shares and the Conversion
Stock shall not be sold, assigned, transferred or pledged except upon the
conditions specified in this Section 2, which conditions are intended to ensure
compliance with the provisions of the 1933 Act. The Purchasers will cause any
proposed purchaser, assignee, transferee, or pledges of the Shares or the
Conversion Stock held by the Purchasers to agree to take and hold such
securities subject to the provisions and upon the conditions specified in this
Section 2.
2.2 Restrictive Legend. Each certificate representing (i) the
Shares, (ii) the Conversion Stock and (iii) any other securities issued in
respect of the Shares or the Conversion Stock upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event, shall
(unless otherwise permitted by the provisions of Section 2.3 below) be stamped
or otherwise imprinted with a legend in the following form (in addition to any
legend required under applicable state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION UNLESS THE CORPORATION IS SATISFIED THAT THE TRANSFER IS IN
ACCORDANCE WITH RULE 144 OR SIMILAR RULE OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR
TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF
THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
CORPORATION.
The Purchasers and Holders consent to the Company making a notation on
its records and giving instructions to any transfer agent of the Shares or the
Conversion Stock in order to implement the restrictions on transfer established
in this Section 2.
2.3 Notice of Proposed Transfers. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 2.3. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities (other than (i) in
transactions involving the distribution without consideration of Restricted
Securities by any Holder to any of its partners, or retired partners, or to the
estate of any of its partners or retired partners, (ii) a transfer to an
affiliated fund or partnership which is not a competitor of the Company, subject
to compliance with applicable securities laws, or (iii) transfers in compliance
with Rule 144, so long as the Company, prior to such transfer, is furnished with
evidence satisfactory to the Company of compliance with such Rule), unless there
is in effect a registration statement under the 1933 Act covering the proposed
transfer, the holder thereof shall give written notice to the Company of such
holder's intention to effect such transfer,
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sale, assignment or pledge. Each such notice shall describe the manner and
circumstances of the proposed transfer, sale, assignment or pledge in sufficient
detail, and shall be accompanied, at such holder's expense, by either (i) a
written opinion of legal counsel who shall, and whose legal opinion shall be,
reasonably satisfactory to the Company addressed to the Company, to the effect
that the proposed transfer of the Restricted Securities may be effected without
registration under the 1933 Act; (ii) a "no action" letter from the Commission
to the effect that the transfer of such securities without registration will not
result in a recommendation by the staff of the Commission that action be taken
with respect thereto, or (iii) any other evidence reasonably satisfactory to the
Company, whereupon the holder of such Restricted Securities shall be entitled to
transfer such Restricted Securities in accordance with the terms of the notice
delivered by the holder to the Company. Each certificate evidencing the
Restricted Securities transferred (whether or not such transfer required the
giving of notice under this Section 2.3) shall bear, except if such transfer is
made pursuant to Rule 144, the appropriate restrictive legend set forth in
Section 2.2 above, except that such certificate shall not bear such restrictive
legend if in the opinion of counsel for such holder and in the reasonable
opinion of the Company such legend is not required in order to establish
compliance with any provision of the 1933 Act.
2.4 Removal of Restrictions on Transfer of Securities. Any legend
referred to in Section 2.2 hereof stamped on a certificate evidencing (i) the
Shares, (ii) the Conversion Stock or (iii) any other securities issued in
respect of the Shares or the Conversion Stock upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event and the stock
transfer instructions and record notations with respect to such security shall
be removed and the Company shall issue a certificate without such legend to the
holder of such security if such security is registered under the 1933 Act, or if
such holder provides the Company with an opinion of counsel (which may be
counsel for the Company) reasonably acceptable to the Company to the effect that
a public sale or transfer of such security may be made without registration
under the 1933 Act or such holder provides the Company with reasonable
assurances, which may, at the option of the Company, include an opinion of
counsel satisfactory to the Company, that such security can be sold pursuant to
Section (k) of Rule 144 under the 1933 Act. The Company will cause legend
removal to be authorized or provide a written response as to why legends may not
be removed within 15 days of receipt of any such request.
2.5 Requested Registration.
(a) Request for Registration. In case the Company shall receive from
Initiating Holders a written request that the Company effect any registration,
qualification or compliance with respect to shares of Registrable Securities
with an expected aggregate offering price to the public of at least $7,500,000,
the Company will:
(i) within ten days of the receipt by the Company of such notice, give
written notice of the proposed registration, qualification or compliance to all
other Holders; and
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(ii) as soon as practicable, use its commercially reasonable efforts
to effect such registration, qualification or compliance (including, without
limitation, appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations issued
under the 1933 Act and any other governmental requirements or regulations) as
may be so requested and as would permit or facilitate the sale and distribution
of all or such portion of such Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of any
Holder or Holders joining in such request as are specified in a written request
received by the Company within 20 days after receipt of such written notice from
the Company;
Provided, however, that the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this Section 2.5:
(A) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the 1933 Act;
(B) Prior to the earlier of (i) December 31, 2002 or (ii) the
expiration of one year following completion of the Company's first registered
public offering of its stock;
(C) During the period starting with the date sixty (60) days prior to
the Company's estimated date of filing of, and ending on the date three (3)
months immediately following the effective date of, any registration statement
pertaining to securities of the Company (other than a registration of securities
in a Rule 145 transaction, with respect to an employee benefit plan or with
respect to the Company's first registered public offering of its stock),
provided that the Company is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective;
(D) After the Company has effected two such registrations pursuant to
this Section 2.5(a) covering all shares requested to be registered by the
Holders initiating or joining such request, and such registrations have been
declared or ordered effective, and, if the method of disposition specified by
such initiating or requesting Holders shall have been a firm commitment
underwritten public offering, all such shares shall have been sold pursuant
thereto;
(E) If the Company shall furnish to such Holders a certificate signed
by the President of the Company stating that in the good faith judgment of the
Board of Directors it would be seriously detrimental to the Company or its
shareholders for a registration statement to be filed in the near future, then
the Company's obligation to use its commercially reasonably efforts to register,
qualify or comply under this Section 2.5 shall be deferred for a period not to
exceed 90 days from the date of receipt of written request from the
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Initiating Holders; provided, however, that the Company shall not exercise such
right more than once in any twelve-month period.
Subject to the foregoing clauses (A) through (E), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as reasonably practicable, after receipt of the request or
requests of the Initiating Holders.
(b) Underwriting. In the event that a registration pursuant to Section 2.5
is for a registered public offering involving an underwriting, the Company shall
so advise the Holders as part of the notice given pursuant to Section 2.5(a)(i).
In such event, the right of any Holder to registration pursuant to Section 2.5
shall be conditioned upon such Holder's participation in the underwriting
arrangements required by this Section 2.5, and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent requested shall be
limited to the extent provided herein.
The Company shall (together with all Holders proposing to distribute
their securities through such underwriting) enter into an underwriting agreement
in customary form with the managing underwriter of recognized national standing
selected for such underwriting by the Company and reasonably acceptable to a
majority of the Holders proposing to distribute their securities through such
underwriting. Notwithstanding any other provision of this Section 2.5, if the
managing underwriter advises the Initiating Holders in writing that marketing
factors require a limitation of the number of shares to be underwritten, then
the Company shall so advise all holders of Registrable Securities and the number
of shares of Registrable Securities that may be included in the registration and
underwriting shall be allocated among all Holders thereof in proportion, as
nearly as practicable, to the respective amounts of Registrable Securities
requested by such Holders to be included in such registration statement or in
such other manner as shall be agreed to by the Company and Holders of a majority
of the Registrable Securities proposed to be included in such registration. No
Registrable Securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration. To
facilitate the allocation of shares in accordance with the above provisions, the
Company or the underwriters may round the number of shares allocated to any
Holder to the nearest 100 shares.
If any Holder of Registrable Securities disapproves of the terms of
the underwriting, such Holder may elect to withdraw therefrom by written notice
to the Company, the managing underwriter and the Initiating Holders. The
Registrable Securities and/or other securities so withdrawn shall also be
withdrawn from registration, and such Registrable Securities shall not be
transferred in a public distribution prior to 180 days after the effective date
of such registration, or such other shorter period of time as the underwriters
may require.
2.6 Company Registration.
(a) Notice of Registration. If at any time or from time to time the
Company shall determine to register any of its securities, either for its own
account or the account of a security holder or holders, other than (i) a
registration relating solely to employee
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benefit plans or (ii) a registration relating solely to a Commission Rule 145
transaction, the Company will (but not more than five (5) times pursuant to this
Section 2.6(a)):
(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), and in any underwriting involved therein,
all the Registrable Securities specified in a written request or requests, made
within 20 days after receipt of such written notice from the Company, by any
Holder, but only to the extent that such inclusion will not diminish the number
of securities included by Holders of the Company's securities who have demanded
such registration pursuant to Section 2.5 hereof.
(b) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2.6(a)(i). In such event the right of any Holder to
registration pursuant to Section 2.6 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of Registrable Securities
in the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company) enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 2.6, if the managing
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the managing underwriter may limit the Registrable
Securities to be distributed through such underwriting. The Company shall so
advise all Holders distributing their securities through such underwriting of
such limitation and the number of shares of Registrable Securities that may be
included in the registration (and underwriting if any) shall be allocated among
all Holders in proportion, as nearly as practicable, to the respective amounts
of Registrable Securities requested by such Holders to be included in such
Registration Statement. To facilitate the allocation of shares in accordance
with the above provisions, the Company may round the number of shares allocated
to any Holder or holder to the nearest 100 shares. If any Holder or holder
disapproves of the terms of any such underwriting, such Holder or holder may
elect to withdraw therefrom by written notice to the Company and the managing
underwriter. Any securities excluded or withdrawn from such underwriting shall
be withdrawn from such registration, and shall not be transferred in a public
distribution prior to 120 days after the effective date of the registration
statement relating thereto, or such other shorter period of time as the
underwriters may require.
(c) Right to Terminate Registration. The Company shall have the right
to terminate or withdraw any registration initiated by it under this Section 2.6
prior to the effectiveness of such registration whether or not any Holder has
elected to include securities in such registration. The Registration Expenses of
such withdrawn registration shall be borne by the Company in accordance with
Section 2.8 hereof.
2.7 Registration on Form S-3.
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(a) If any Holder or Holders request that the Company file a
registration statement on Form S-3 (or any successor form to Form S-3), for a
public offering of Registrable Securities, the reasonably anticipated aggregate
price to the public of which, net of underwriting discounts and commissions (if
any), would exceed $1,000,000 and the Company is a registrant entitled to use
Form S-3 to register the Registrable Securities for such an offering, the
Company shall use its commercially reasonable efforts to cause such Registrable
Securities to be registered on such form for the offering and to cause such
Registrable Securities to be qualified in such jurisdictions as the Holder or
Holders may reasonably request; provided, however, that the Company shall not be
required to effect more than four registrations pursuant to this Section 2.7 or
more than one such registration in any twelve (12) month period. After the
Company's first public offering of its securities, the Company will use its
commercially reasonable efforts to qualify for Form S-3 registration or a
registration on any successor form to Form S-3.The provisions of Section 2.6(b)
shall be applicable to each registration initiated under this Section 2.7.
(b) Notwithstanding the foregoing, the Company shall not be obligated
to take any action pursuant to this Section 2.7: (i) in any particular
jurisdiction in which the Company would be required to execute a general consent
to service of process in effecting such registration, qualification or
compliance unless the Company is already subject to service in such jurisdiction
and except as may be required by the 1933 Act; (ii) if the Company, within ten
(10) days of the receipt of the request of the initiating Holders, gives notice
of its bona fide intention to effect the filing of a registration statement with
the Commission within ninety (90) days of receipt of such request (other than
with respect to a registration statement relating to a Rule 145 transaction, or
an offering solely to employees); (iii) during the period starting with the date
sixty (60) days prior to the Company's estimated date of filing of, and ending
on the date three (3) months immediately following, the effective date of any
registration statement pertaining to securities of the Company (other than a
registration of securities in a Rule 145 transaction or with respect to an
employee benefit plan), provided that the Company is actively employing in good
faith all reasonable efforts to cause such registration statement to become
effective; (iv) after the Company has effected three (3) such registrations
pursuant to this Section 2.7 and each such registration has been declared or
ordered effective; or (v) if the Company shall furnish to such Holder a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors it would be seriously detrimental to
the Company or its shareholders for registration statements to be filed in the
near future, then the Company's obligation to use its commercially reasonable
efforts to file a registration statement shall be deferred for a period not to
exceed 90 days from the receipt of the request to file such registration by such
Holder or Holders; provided, however, that the Company shall not exercise such
right more than once in any twelve-month period.
2.8 Expenses of Registration. All Registration Expenses incurred in
connection with any registration pursuant to Sections 2.5 and 2.6 and the
reasonable cost of one special legal counsel to represent all of the Holders
together in any such registration shall be borne by the Company. All
Registration Expenses incurred in connection with any registration pursuant to
Section 2.7 and the cost of any counsel for the Holders in any such registration
shall be borne by the Holders pro rata according to the number of Registrable
Securities included by them in such
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registration. If a registration proceeding is begun upon the request of
Initiating Holders pursuant to Section 2.5, but such request is subsequently
withdrawn, then the Holders of Registrable Securities to have been registered
may either: (i) bear all Registration Expenses of such proceeding, pro rata on
the basis of the number of shares to have been registered, in which case the
Company shall be deemed not to have effected a registration pursuant to
subparagraph 2.5(a) of this Agreement; or (ii) require the Company to bear all
Registration Expenses of such proceeding, in which case the Company shall be
deemed to have effected a registration pursuant to subparagraph 2.5(a) of this
Agreement. All Selling Expenses relating to securities registered on behalf of
the Holders shall be borne by the holders of securities included in such
registration pro rata on the basis of the number of shares so registered.
2.9 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Section 2,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will:
(a) Prepare and file with the Commission a registration statement with
respect to such securities and use its commercially reasonable efforts to cause
such registration statement to become and remain effective, but in no event
longer than 150 days, until the distribution described in the Registration
Statement has been completed;
(b) Prepare and file with the Commission 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 1933 Act with respect to the disposition of all securities
covered by such registration statement.
(c) Furnish to the Holders participating in such registration and to
the underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as such underwriters may reasonably request in order to
facilitate the public offering of such securities.
(d) Use its commercially reasonable efforts to furnish, at the request
of any Holder requesting registration of Registrable Securities at the time such
securities are delivered to the underwriters (if any) for sale in connection
with a registration pursuant to this Section 2, (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 the
date of commencement of the offering and a "bring-down" letter dated as of the
closing date of such offering, from the independent accountants of the Company,
in form and substance as is customarily given by independent accountants to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities.
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2.10 Indemnification.
(a) The Company will indemnify each Holder, each of its officers,
directors and partners, and each person controlling (or deemed to be
controlling) such Holder within the meaning of Section 15 of the 1933 Act, with
respect to which registration, qualification or compliance has been effected
pursuant to this Section 2, and each underwriter, if any, and each person who
controls any underwriter within the meaning of Section 15 of the 193 3 Act,
against all actual out-of-pocket expenses, claims, losses, damages or
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular or
other document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, or any violation by the Company of the 1933 Act
or any rule or regulation promulgated under the 1933 Act applicable to the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse each such Holder, each of its officers, directors
and partners and each person controlling such Holder, each such underwriter and
each person who controls any such underwriter, for any legal and any other
actual out-of-pocket expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action, provided that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission or alleged untrue statement or
omission, made in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder,
controlling person or underwriter and stated to be specifically for use therein.
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers, each underwriter, if any, of the Company's securities covered by such
a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the 1933 Act, end each other
Holder, each of its officers, directors and partners and each person controlling
such Holder within the meaning of Section 15 of the 1933 Act, against all actual
out-of-pocket expenses, claims, losses, damages and liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, and will reimburse the Company, such Holders, such directors,
officers, persons, underwriters or control persons for any legal or any other
actual out-of-pocket expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage,
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liability or action, as such expenses are incurred, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder and stated to be specifically for use therein.
Notwithstanding the foregoing, the liability of each Holder under this
subsection (b) shall not exceed the proceeds received by such Holder from the
sale of Registrable Securities covered by such registration statement. A Holder
will not be required to enter into any agreement or undertaking in connection
with any registration under this Section 2 providing for any indemnification or
contribution on the part of such Holder greater than the Holder's obligations
under this Section 2.10(b).
(c) Each party entitled to indemnification under this Section 2.10
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
party's expense, provided, however, that an Indemnified Party (together with all
other Indemnified Parties which may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the
reasonable fees and expenses of such counsel to be paid by the Indemnifying
Party, if representation of such Indemnified Party by the counsel retained by
the Indemnifying Party would be inappropriate due to actual or potential
differing interests between such Indemnified Party and any other party
represented by such counsel in such proceeding. The failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying Party
of its obligations under this Section 2 unless the failure to give such notice
is materially prejudicial to an Indemnifying Party's ability to defend such
action. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
(d) If the indemnification provided for paragraphs (a) through (c) of
this Section 2.10 is unavailable or insufficient to hold harmless an Indemnified
Party under such paragraphs in respect of any losses, claims, damages or
liabilities or actions in respect thereof referred to therein, then each
Indemnifying Party shall in lieu of indemnifying such Indemnified Party
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities or actions in such proportion as
appropriate to reflect the relative fault of the Company, on the one hand, and
the underwriters and the Holder of such Registrable Securities, on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or actions as well as any other relevant equitable
considerations, including the failure to give any notice under paragraph (c).
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact relates to
information supplied by the Company, on the one hand, or the
11
underwriters or the Holders of such Registrable Securities, on the other, and to
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and each of the
Holders agrees that it would not be just and equitable if contributions pursuant
to this paragraph were determined by pro rata allocation (even if all of the
Holders of such Registrable Securities were treated as one entity for such
purpose) or by any other method of allocation which did not take account of the
equitable considerations referred to above in this paragraph. The amount paid or
payable by an Indemnified Party as a result of the losses, claims, damages,
liabilities or action in respect thereof, referred to above in this paragraph,
shall be deemed to include any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this paragraph, no Holder
shall be required to contribute any amount in excess of the proceeds received by
such Holder for the sale of Registrable Securities covered by such registration
statement. No person guilty of fraudulent misrepresentations (within the meaning
of Section 11(f) of the 1933 Act), shall be entitled to contribution from any
person who is not guilty of such fraudulent misrepresentation.
2.11 Information by Holder. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held by
them and the distribution proposed by such Holder or Holders as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Section 2.
2.12 Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Restricted Securities to the public without
registration, after such time as a public market exists for the Common Stock of
the Company, the Company agrees to use its commercially reasonable efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the 1933 Act, at all times after the
effective date that the Company becomes subject to the reporting requirements of
the 1933 Act or the Securities Exchange Act of 1934, as amended.
(b) Use its commercially reasonable efforts to file with the
Commission in a timely manner all reports and other documents required of the
Company under the 1933 Act and the Securities Exchange Act of 1934, as amended
(at any time after it has become subject to such reporting requirements);
(c) So long as a Purchaser owns any Restricted Securities to furnish
to the Purchaser forthwith upon request a written statement by the Company as to
its compliance with the reporting requirements of said Rule 144 (at any time
after 90 days after the effective date of the first registration statement filed
by the Company for an offering of its securities to the general public), and of
the 1933 Act and the Securities Exchange Act of 1934 (at any time after it has
become subject to such reporting requirements), a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents of the
Company and other
12
information in the possession of or reasonably obtainable by the Company as a
Purchaser may reasonably request in availing itself of any rule or regulation of
the Commission allowing a Purchaser to sell any such securities without
registration.
2.13 Transfer of Registration Rights. The rights to cause the Company
to register securities granted Holders under Sections 2.5, 2.6 and 2.7 may be
assigned to a transferee or assignee in connection with any transfer or
assignment of Registrable Securities by a Holder of not less than 100,000 shares
of Registrable Securities, or to any transferee or assignee who is a constituent
partner of a Holder or the estate of such constituent partner, provided that
(a) such transfer may otherwise be effected in accordance with applicable
securities laws and (b) that the Company is, within 20 days of such assignment
or transfer, furnished by the transferor or assignor with written notice of the
name and address of such transferee or assignee, the securities with respect to
which such registration rights are being assigned and the fact that such
registration rights are being assigned.
2.14 Standoff Agreements. Each Holder agrees in connection with the
Company's initial public offering of the Company's securities, upon request of
the Company or the underwriters managing any underwritten offering of the
Company's securities, not to sell, make any short sale of, loan, pledge (or
otherwise encumber or hypothecate), grant any option for the purchase of, or
otherwise directly or indirectly dispose of any Registrable Securities (other
than those included in the registration) without the prior written consent of
the company or such underwriters, as the case may be, for such period of time
(not to exceed one hundred eighty (180) days) from the effective date of such
registration as may be requested by the underwriters; provided, that the
officers and directors of the company who own stock of the company and all other
holders of 5% or more of the Company's outstanding Common Stock equivalents also
agree to such restrictions.
2.15 Rule 144A Information. Whenever the Company receives a request
for the following information from Initiating Holders on or after December 31,
2002, then the Company shall within 60 days after the date of such request
provide the information required in Rule 144A(d)(4) to such Initiating Holders
and any person or persons designated by the Initiating Holders as a prospective
buyer in a transaction pursuant to Rule 144A. The Company's obligations pursuant
to this Section 2.15 shall extend to any person who acquires shares of the
Company's Preferred Stock and/or Conversion Stock as a result of a transaction
pursuant to Rule 144A.
2.16 Termination of Registration Rights. The rights granted under this
Section 2 shall terminate on the fifth anniversary of the consummation of the
initial underwritten public offering of the Company's securities pursuant to a
registration statement filed under the 0000 Xxx.
3. Purchasers' Right of First Refusal.
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3.1 Right of First Refusal Upon Issuance of Securities by the
Company.
(a) The Company hereby grants, on the terms set forth in this Section
3.1, to each Purchaser the right of first refusal to purchase all or any part of
such Purchaser's pro rata share of the New Securities (as defined in Section
3.1(b)) which the Company may, from time to time, propose to sell and issue
after the date of this Agreement. The Purchasers may purchase said New
Securities on the same terms and at the same price at which the Company proposes
to sell the New Securities. The pro rata share of each Purchaser, for purposes
of this right of first refusal, is the ratio of the total number of shares of
Common Stock held by such Purchaser, including any shares of Common Stock into
which shares of Preferred Stock held by such Purchaser are convertible, to the
total number of shares of Common Stock outstanding immediately prior to the
issuance of the new Securities (including any shares of Common Stock into which
outstanding shares of Preferred Stock are convertible).
(b) "New Securities" shall mean any capital stock of the Company,
whether now authorized or not, and any rights, options or warrants to purchase
said capital stock, and securities of any type whatsoever that are, or may
become, convertible into said capital stock; provided that "New Securities"
does not include the following issuances (as long as they are approved by the
Company's board of directors): (i) the Shares purchased under this Agreement or
the Conversion Stock, (ii) securities offered pursuant to a registration
statement filed under the 1933 Act, as hereinafter defined, (iii) securities
issued pursuant to the acquisition of another corporation, partnership, limited
liability company or other business entity by the Company by merger, share
exchange, consolidation, purchase of substantially all of the assets or other
reorganization, (iv) up to 6,750,000 shares of Common Stock or other securities
hereafter issued or issuable to officers, directors, employees, advisors,
consultants or agents of, or independent contractors to, the Company pursuant to
any employee or consultant stock offering, plan or arrangement approved by the
Board of Directors of the Company, (v) all shares of Common Stock or other
securities issued pursuant to warrants, rights or options which warrants, rights
or options are issued and outstanding on the date hereof, (vi) all shares of
Common Stock or other securities hereafter issued pursuant to warrants, rights
or options hereafter issued, provided that the rights of first refusal
established hereby applied to the initial sale or grant by the Company of such
warrants, rights or options, and (vii) all shares of Common Stock or other
securities issued in connection with equipment leasing or equipment financing
arrangements.
(c) In the event the Company proposes to undertake an issuance of New
Securities, it shall give to the Purchasers written notice (the "Notice") of its
intention, describing the type of New Securities, the price, the terms upon
which the Company proposes to issue the same, and a statement as to the number
of days (which shall not be more than seven) from receipt of such Notice within
which the Purchasers must respond to such Notice. The Purchasers shall have
thirty (30) days from the date of receipt of the Notice to purchase any or all
of the New Securities for the price and upon the terms specified in the Notice
by giving written notice to the Company and stating therein the quantity of New
Securities to be purchased and forwarding payment for such New Securities to the
Company if immediate payment is required by such terms, or in any event no later
than thirty (30) days after the date of receipt of the Notice.
14
(d) In the event the Purchasers fail to exercise in full the right of
first refusal within said thirty (30) day period, the Company shall have ninety
(90) days thereafter to sell or enter into an agreement (pursuant to which the
sale of New Securities covered thereby shall be closed, if at all, within
thirty (30) days from date of said agreement) to sell the New Securities in
respect of which the Purchasers' rights were not exercised, at a price and upon
general terms no more favorable to the Purchasers thereof than specified in the
Notice. In the event the Company has not sold, or entered into an agreement
for the sale of, the New Securities within said ninety (90) day period (or sold
and issued New Securities in accordance with the foregoing within thirty (30)
days from the date of said agreement), the Company shall not thereafter issue
or sell any New Securities without first offering such securities to the
Purchasers in the manner provided above.
(e) The right of first refusal granted under this Section 3.1 shall
expire upon:
(i) the date upon which a registration statement filed by the Company
under the 1933 Act (other than a registration of securities in a Rule 145
transaction or with respect to an employee benefit plan) in connection with an
underwritten public offering of its securities first becomes effective and the
securities registered thereunder are sold; or
(ii) for each Purchaser, the date on which such Purchaser no longer
holds a minimum of 250,000 Shares or Conversion Stock or the number of Shares or
Conversion Shares originally purchased, whichever is less.
4. Series C Right of Co-Sale.
4.1 Grant of Co-Sale Rights.
(a) If a Founder proposes to sell or transfer any shares of Common
Stock now owned by the selling Founder (the shares subject to such offer to be
hereafter called the "Stock" and the selling Founder to be called the "Selling
Party") in one or more related transactions, then, such Party shall promptly
deliver written notice (the "Co-Sale Notice") to each of the Series C
Purchasers at least twenty (20) days prior to the closing of such sale or
transfer. For purposes of this Section 4, "Common Stock" shall mean (i) the
Company's Common Stock (including Conversion Shares), whether now owned or
hereafter acquired by a Founder, (ii) shares of Common Stock issuable upon
conversion of the Shares or any other outstanding convertible securities. The
Co-Sale Notice shall describe in reasonable details the proposed sale or
transfer including, without limitation, the number of shares of Stock to be
sold or transferred, the nature of such sale or transfer, the consideration to
be paid and the name and address of each prospective purchaser or transferee.
(b) Each Series C Purchaser shall have the right, exercisable upon
written notice to such Selling Party within ten (10) days after receipt of the
Notice, to participate in such sale of Stock on the same terms and conditions
provided that no Series C Purchaser shall be required to make any
representation or warranties or perform any undertakings other than with respect
to its title and authority. To the extent one or more of the Series C
Purchasers exercise such right of participation in
15
accordance with the terms and conditions set forth below, the number of shares
of Stock that the Selling Party may sell in the transaction shall be
correspondingly reduced.
(c) Each Series C Purchaser who elects to participate in a sale of
Stock under this Section 4 (a "Participant") may sell all or any part of that
number of shares of Stock equal to the product obtained by multiplying (i) the
aggregate number of shares of Stock covered by the Co-Sale Notice by (ii) a
fraction the numerator of which is the number of shares of Common Stock (on a
fully-diluted, as converted basis) owned by the Series C Purchaser at the time
of the sale or transfer and the denominator of which is the total number of
shares of Common Stock owned by the Founders and the Series C Purchasers
(including the Selling Party) (on a fully-diluted, as converted basis) at the
time of the sale or transfer.
(d) If any Series C Purchaser fails to elect to fully participate in
the Selling Party's sale pursuant to this Section 4.1, the Selling Party shall
promptly give notice of such failure and the aggregate number of shares that the
non-participating Series C Purchasers did not elect to sell (the "Unsold
Portion') to each of the Participants. Such notice may be made by telephone if
con- firmed in writing within five (5) days. The Participants shall have two (2)
days from the date such notice was given to agree to sell their pro rata share
of the Unsold Portion. After the expiration of the two (2) day period following
the provision of notice to the Participants and without being subject to the
provisions of this paragraph 4.1(d), the Selling Party shall have the right to
sell or transfer the number of shares of Stock that is equivalent to the balance
of the Unsold Portion that is not elected to be sold by the Participants. For
purposes of this paragraph, a Participant's pro rata share shall be radio of (x)
the number of shares of Common Stock (on a fully-diluted, as converted basis)
held by such Participant to (y) the total number of shares of Common Stock (on a
fully-diluted, as converted basis) held by all the Participants and the Selling
Party.
(e) Each Participant shall effect its participation in the sale by
promptly delivering to the Selling Party for transfer to the prospective
purchaser one or more certificates properly endorsed for transfer, which
represent:
(i) the type and number of shares of Common Stock which such
Participant elects to sell; or
(ii) that number of Shares or other shares of Preferred Stock which is
at such time convertible into the number of shares of Common Stock which such
Participant elects to sell; provided, however, that if the prospective purchaser
objects to the delivery of such Shares or other Preferred Stock in lieu of
Common Stock, such Participant shall convert such Shares or Preferred Stock into
Common Stock upon the closing of the sale contemplated hereby and deliver Common
Stock as provided in subparagraph 4.1(e)(i) above. The Company agrees to make
any such conversion concurrent with the actual transfer of such shares to the
purchaser.
(f) The stock certificate or certificates that the Participant
delivers to the Selling Party pursuant to paragraph 4.l(e) shall be transferred
to the prospective purchaser in consummation of the sale of the Stock pursuant
to the terms and conditions specified in the Co-Sale Notice, and the
16
Selling Party shall concurrently therewith remit to such Participant that
portion of the sale proceeds to which such Participant is entitled by reason of
its participation in such sale. To the extent that any prospective purchaser or
purchasers prohibits such assignment or otherwise refuses to purchase shares or
other securities from a Participant exercising its rights of co-sale hereunder,
the Selling Party shall not sell to such prospective purchaser or purchasers any
Stock unless and until, simultaneously with such sale, the Selling Party shall
purchase such shares or other securities from such Participant.
(g) The exercise or non-exercise of the rights of the Participants
hereunder to participate in one or more sales of Stock made by a Selling Party
shall not adversely affect their rights to participate in subsequent sales of
Stock subject to paragraph 4.1 (a).
(h) Subject to the rights of the Series C Purchasers who have elected
to participate in the sale of the Stock subject to the Co-Sale Notice, the
Selling Party may, not later than sixty (60) days following delivery to the
Company and each of the Series C Purchasers of the Notice, conclude a transfer
of any or all of the Stock covered by the Notice on terms and conditions not
more favorable to the transferor than those described in the Notice. Any
proposed transfer on terms and conditions more favorable than those described in
the Co-Sale Notice, as well as any sub-sale rights of the Series C Purchasers
and shall require compliance by the Selling Party with the procedures described
in this Section 4.
4.2 Termination of Right of Co-Sale. Notwithstanding anything in
this Section 4 to the contrary, the right of co-sale shall terminate upon (and
shall not be applicable with respect to) the earlier of (i) the closing of the
Company's initial firm commitment underwritten public offering pursuant to an
effective registration statement under the 1933 Act, (ii) the closing of the
Company's sale of all or substantially all of its assets or the acquisition of
the Company by another entity by means of merger or consolidation resulting in
the exchange of the outstanding shares of the Company's capital stock for
securities or consideration issued, or caused to be issued, by the acquiring
entity or its subsidiary, or (iii) such time as the Series C Purchasers hold an
aggregate of less than 1,000,000 (appropriately adjusted for stock splits,
dividends, recapitalizations and similar events) Shares and Conversion Shares.
4.3 Exempt Transfers.
(a) Notwithstanding the foregoing, the co-sale rights of the Series C
Purchasers shall not apply to any transfer to the ancestors, descendants or
spouse or to trusts for the benefit of such persons or the transferring Founder;
provided that (A) the transferring Founder shall inform the Series C Purchasers
or the Company (which shall then inform the Series C Purchasers) of such pledge,
transfer or gift prior to effecting it and (B) the pledgee, transferee or donee
shall furnish the Series C Purchasers with a written agreement to be bound by
and comply with all provisions of Section 4 of this Agreement. Such transferred
Stock shall remain "Stock" hereunder, and such pledgee, transferee shall be
treated as a "Founder" for purposes of this Agreement.
(b) Notwithstanding the foregoing, the provisions of Section 4 shall
not apply to the sale of any Stock (i) to the public pursuant to a registration
statement filed with, and declared effective by, the Commission under the 1933
Act or (ii) to the Company pursuant to the terms
17
of the Company's right of first refusal, right to purchase on involuntary
transfer or repurchase rights set forth in stock purchase agreements with the
Founders or in connection with the termination of a Founder's employment with
the Company or (iii) if prior to such sale, the Founder held less than one
percent (1%) of the Company's outstanding shares.
(c) This Section 4 shall in no manner limit the right of the Company
to repurchase securities from Founders, consultants, employees or directors
pursuant to its repurchase rights and first refusal rights and rights to
purchase upon involuntary transfers set forth in applicable stock purchase
agreements.
4.4 Prohibited Transfers. Notwithstanding the foregoing, any attempt
by a Founder to transfer Stock in violation of Section 4 hereof shall be void
and the Company agrees it will not effect such a transfer nor will it treat any
alleged transferee as the holder of such shares without the written consent of
the holders of more than fifty percent (50%) of the outstanding shares of
Conversion Stock (assuming, for purposes of this Section 4.4, conversion of all
outstanding shares).
4.5 Legend.
(a) Each certificate representing shares of Stock now or hereafter
owned by the Founders or issued to any person in connection with a transfer
pursuant to paragraph 4.3(a) hereof shall be endorsed with the following legend:
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED
BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF AN INVESTORS
RIGHTS AGREEMENT, BY AND BETWEEN THE SHAREHOLDER, THE COMPANY AND CERTAIN
HOLDERS OF SHARES OF THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED
UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY."
(b) Each Founder agrees that the Company may instruct its transfer
agent to impose transfer restrictions on the shares represented by certificates
bearing the legend referred to in paragraph 4.5(a) above to enforce the
provisions of this Section 4 and the Company agrees to promptly do so. The
legend shall be removed upon termination of the provisions of Section 4 of this
Agreement.
4.6 Assignability of Rights. The co-sale rights granted to the
Series C Purchasers hereunder shall be assignable only to an assignee or
transferee who acquires at least 250,000 shares of Series C Preferred Stock or
Common Stock issued upon conversion thereof.
4.7 Stock Split. All references to numbers of shares in this Section
4 shall be appropriately adjusted to reflect any stock dividend, split,
combination or other recapitalization of shares by the Company occurring after
the date of this Agreement.
5. Miscellaneous.
5.1 Waivers and Amendments. With the written consent of the Company
and the record holders of more than 50% of the Conversion Stock (assuming, for
purposes of this Section
18
6.1, conversion of all outstanding shares of Series C Preferred Stock), the
obligations of the Company and the rights of the holders of the Shares and the
Conversion Stock under this Agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively and either for a
specified period of time or indefinitely), and with the same consent, the
Company, when authorized by resolution of its Board of Directors, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such waiver or supplemental agreement shall reduce
the aforesaid percentage of the Conversion Stock (assuming conversion of all
outstanding shares of Series C Preferred Stock), the holders of which are
required to consent to any waiver or supplemental agreement without the consent
of the record holders of all of the Conversion Stock (assuming conversion of all
outstanding shares of Series C Preferred Stock and, provided further that any
amendment to Section 4 hereof shall in addition require the consent of a
majority in interest of the Founders (based on the number of shares of Common
Stock and securities convertible into or exercisable for Common Stock held by
the Founders at the time such consent is sought). Upon the effectuation of each
such waiver, consent, agreement, amendment or modification the Company shall
promptly given written notice thereof to the record holders of the Shares and/or
the Conversion Stock who have not previously consented thereto in writing.
Neither this Agreement nor any provisions hereof may be changed, waived,
discharged or terminated orally, but only by a signed statement in writing.
5.2 Governing Law. This Agreement shall be governed in all respects
by the laws of the State of Washington as such laws are applied to agreements
between Washington residents entered into and to be performed entirely within
Washington.
5.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
5.4 Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
5.5 Notices. All notices and other communications required or
permitted hereunder shall be effective upon receipt and shall be in writing and
may be delivered in person, by telecopy, electronic mail, overnight delivery
service or U.S. mail, in which event it may be mailed by first-class, certified
or registered, postage prepaid, addressed (a) if to a Purchaser or Holder, at
such address as such Purchaser or Holder shall have furnished the Company in
writing, or, until any such holder so furnishes an address to the Company, then
to and at the address of the last holder of such securities who has so furnished
an address to the Company, or (b) if to the Company, at 0000 Xxxxx Xxx, Xxxxx
0000, Xxxxxxx, XX 00000, or at such other address as the Company shall have
furnished to the Purchasers, Holders and each such other holder in writing.
Notwithstanding the foregoing, all notices and communications to addresses
outside the United States shall be given by telecopier and confirmed in writing
sent by overnight or two-day courier service.
19
5.6 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
5.7 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 instrument.
5.8 Nominees. Securities registered in the name of a nominee for a
Purchaser or a Holder shall, for purposes of this Agreement, be treated as being
owned by such Purchaser or Holder.
20
The foregoing Investors Rights Agreement is hereby executed as of the date
first above written.
AVENUE A, INC.
By: /s/ Xxxxxxx Xxxxxxx
---------------------------
Xxxxxxx Xxxxxxx, Chairman
FOUNDERS (executing agreement for purposes of being bound by Section 4 hereof)
/s/ Xxxxxxx Xxxxxxx /s/ Xxxxxxx Xxxxxx
-------------------------- ---------------------------
Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxx
/s/ Xxxxx Xxxxxx /s/ R. Xxxxxxx Xxx
-------------------------- ---------------------------
Xxxxx Xxxxxx R. Xxxxxxx Xxx
The foregoing Investors Rights Agreement is hereby executed as of the date
first above written.
HOLDERS:
VOYAGER CAPITAL FUND L.L.P
By: Voyager Capital Management, LLC
Its General Partner
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------
Xxxxxxx Xxxxxxx, Managing Director
VOYAGER CAPITAL FOUNDERS FUND, L.P.
By: Voyager Capital Management, LLC
Its General Partner
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------
Xxxxxxx Xxxxxxx, Managing Director
The foregoing Investors Rights Agreement is hereby executed as of the date
first above written.
OAK INVESTMENT PARTNERS VIII, L.P.
By: Oak Associates VIII, LLC
Its General Partner
By: /s/ Xxxxxxx Xxxxxx
----------------------------
Xxxxxxx Xxxxxx, Managing Director
OAK VIII AFFILIATES FUND, L.P.
By: Oak VIII Affiliates Fund, LLC
Its General Partner
By: /s/ Xxxxxxx Xxxxxx
----------------------------
Xxxxxxx Xxxxxx, Managing Director
The foregoing Investors Rights Agreement is hereby executed as of the date
first above written.
U.S. VENTURE PARTNERS VI, L.P.
By: Presidio Management Group VI, LLC
Its General Partner
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
Attorney-in-Fact
The foregoing Investors Rights Agreement is hereby executed as of the date
first above written.
KIRLAN VENTURE PARTNERS II, L.P.
By: Kirlan Venture Capital, Inc.
Its General Partner
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Xxxxxx X. Xxxxx, President
The foregoing Investors Rights Agreement is hereby executed as of the date
first above written.
XXXXXX X. XXX, TRUSTEE, XXXXXX X. XXX
REVOCABLE TRUST DATED 3/15/91
By: /s/ Xxxxxx Xxx
------------------------
Xxxxxx Xxx, Trustee
The foregoing Investors Rights Agreement is hereby executed as of the date
first above written.
MEDIA PARTNERS
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Xxxx X. Xxxxxx, General Partner
The foregoing Investors Rights Agreement is hereby executed as of the date
first above written.
THE PHOENIX PARTNERS IV LIMITED PARTNERSHIP
By: Phoenix Management IV, LLC
Its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Xxxxx X. Xxxxxxxx, Member
The foregoing Investors Rights Agreement is hereby executed as of the date
first above written.
/s/ R. Xxxxxxx Xxx
----------------------------------
R. Xxxxxxx Xxx
The foregoing Investors Rights Agreement is hereby executed as of the date
first above written.
INSIGHT VENTURE ASSOCIATES L.L.C.
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Xxxxx Xxxxxxx, Partner
