EXHIBIT 10.7
CRITICAL PATH, INC.
AMENDMENT TO AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
THIS AMENDMENT TO AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT (the
"Amendment") is made as of January 13, 1999, by and among CRITICAL PATH, INC., a
California corporation (the "Company"), and those investors in the Company
listed on Exhibit A attached hereto (the "Series B Investors"), those
shareholders of the Company listed on Exhibit B attached hereto (the "Series A
Shareholders") and those founders listed on Exhibit C attached hereto (the
"Founders"). The Series B Investors, the Series A Shareholders and the Founders
are referred to herein individually as "Investor" and collectively as the
"Investors."
RECITALS:
A. The Company and certain Investors have entered into that certain
Amended and Restated Investors' Rights Agreement dated September 11, 1998 (the
"Investors' Rights Agreement") in connection with the Series B Preferred Stock
Financing in which the Company sold and certain Investors purchased shares of
Series B Preferred Stock of the Company (the "Series B Preferred Stock").
B. Pursuant to the Investors' Rights Agreement, the Company granted the
Investors certain registration rights, information rights and rights of first
offer in connection with the purchase and sale of Series B Preferred Stock.
C. The Company desires to sell up to 2,400,000 shares of Common Stock and
additional shares of Series B Preferred Stock (the "Additional Shares") to
certain Investors and in order to induce such Investors to purchase the
Additional Shares, the Company proposes amending relevant sections of the
Investors' Rights Agreement to provide such Investors with the same registration
rights, information rights and rights of first offer in connection with the
Additional Shares as granted pursuant to the Investors' Rights Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, and for other consideration, the receipt and adequacy of which is
hereby acknowledged, the Company and the Investors hereby agree as follows
effective upon the second closing of the Series B Preferred Stock Financing:
1. Section 1.1(g) of the Investors' Rights Agreement is hereby amended to
read in its entirety as follows:
"(g) "Registrable Securities" shall mean (i) shares of Common Stock
issued to Series A Shareholders or Series B Investors or issued or issuable
pursuant to the conversion of the Shares; (ii) any Common Stock issued as a
dividend or other distribution with respect to or in exchange for or in
replacement of the shares referenced in (i) above, provided, however, that
Registrable Securities shall not include any shares of Common Stock which
have previously
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been registered or which have been sold to the public; (iii) 2,400,000
shares of Common Stock issued to U.S. West Communications Services, Inc.;
and (iv) solely for the purposes of Section 1.3 hereof, Registrable
Securities shall be deemed to include shares of Common Stock of the Company
held by Xxxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx and Xxxxx Xxxxxxx
("Founders Stock")."
2. The first paragraph of Section 1.2(a) is hereby amended to read in its
entirety as follows:
"(a) Request for Registration. If the Company shall receive from
Initiating Holders at any time or times not earlier than the earlier of (a)
March 31, 2002 or (b) six (6) months after the effective date of the first
registration statement filed by the Company covering an underwritten
offering of any of its securities to the general public, a written request
that the Company effect any registration with respect to all or a part of
the Registrable Securities having an aggregate offering price, net of
underwriting discounts and expenses, the anticipated gross proceeds of
which (prior to deduction for underwriter's discounts and expenses related
to the issuance) exceed $12,500,000 and an initial offering price of at
least $1.312 per share (as adjusted for any combinations, consolidations,
subdivisions, splits or stock dividends with respect to such shares of
Common Stock) the Company will:"
3. Section 1.2(a)(ii)(B) of the Investors' Rights Agreement is hereby
amended to read in its entirety as follows:
"(B) After the Company has initiated two such registrations pursuant
to this Section 1.2(a) (counting for these purposes only registrations
which have been declared or ordered effective and pursuant to which not
less than 80% of the Registrable Securities included therein have been sold
and registrations which have been withdrawn by the Holders as to which the
Holders have not elected to bear the Registration Expenses pursuant to
Section 1.4 hereof and would, absent such election, have been required to
bear such expenses);"
4. Section 1.6(a) is hereby amended in its entirety to read as follows:
"(a) Keep such registration effective for a period of one hundred
twenty (120) consecutive days or until the Holder or Holders have completed
the distribution described in the registration statement relating thereto,
whichever first occurs; provided, however, that a. such one hundred twenty
(120) consecutive day period shall be extended for a period of time equal
to the period the Holder refrains from selling any securities included in
such registration at the request of an underwriter of Common Stock (or
other securities) of the Company; and b. in the case of any registration of
Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such one hundred twenty (120) day consecutive
period shall be extended, if necessary, to keep the registration statement
effective until all such Registrable Securities are sold, provided that
Rule 415, or any successor rule under the Securities Act, permits an
offering on a continuous or delayed basis, and provided further that
applicable
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rules under the Securities Act governing the obligation to file a post-
effective amendment permit, in lieu of filing a post-effective amendment
that i. includes any prospectus required by Section 10(a)(3) of the
Securities Act or ii. reflects facts or events representing a material or
fundamental change in the information set forth in the registration
statement, the incorporation by reference of information required to be
included in (A) and (B) above to be contained in periodic reports filed
pursuant to Section 13 or 15(d) of the Exchange Act in the registration
statement;"
5. Section 1.14 of the Investors' Rights Agreement is hereby amended in
its entirety as follows:
"1.14 Termination of Registration Rights. The right of any Holder to
request registration or inclusion in any registration pursuant to Section
1.2, 1.3 or 1.5 shall terminate after the earlier of (i) five (5) years
following the closing of the initial public offering of Common Stock of the
Company, or (ii) at such time, following a public offering that meets the
requirements necessary to trigger an automatic conversion of Preferred
Stock under the Company's Articles of Incorporation, as amended to date, as
Rule 144 or another similar exemption under the Securities Act is available
for the sale of all of such Holder's shares during any ninety (90) day
period; provided, however, that this clause (ii) shall not apply to a
Holder of greater than 5% of the Company's Common Stock."
6. Section 2.6 of the Investors' Rights Agreement is hereby amended in
its entirety as follows:
"2.6 Termination of Covenants. The covenants set forth in Sections
2.1, 2.2, 2.3, 2.4 and 2.5 shall terminate and be of no further force or
effect (a) when the sale of securities pursuant to a registration statement
filed by the Company under the Securities Act in connection with the firm
commitment underwritten offering of its securities to the general public is
consummated, the aggregate gross proceeds of which (prior to deduction for
underwriter's discounts and expenses related to the issuance) exceed
$30,000,000 and an initial offering price of at least $7.7492 per share (as
adjusted for any combinations, consolidations, subdivisions, splits or
stock dividends with respect to such shares of Common Stock), or (b) when
the Company first becomes subject to the periodic reporting requirements of
Sections 13 or 15(d) of the Exchange Act, whichever event shall first
occur."
7. Section 3.1 of the Investors' Rights Agreement is hereby amended in
its entirety as follows:
"3.1 Waiver of Right of First Offer. Each Series A Shareholder and
Founder holding a right of first offer to purchase new securities of the
Company pursuant to Section 2.3 of the Original Rights Agreement and each
Series B Investor holding a right of first offer to purchase new securities
of the Company pursuant to Section 2.3 of this Agreement, by its execution
of this Agreement, hereby waives any rights it may have pursuant to such
section to purchase a greater number of shares of Series B Preferred Stock
than the number such
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Investor is purchasing under the Purchase Agreement."
8. Except as expressly modified herein, the Investors' Rights Agreement
shall remain in full force and effect.
This Amendment to the Amended and Restated Investors' Rights 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.
COMPANY
CRITICAL PATH, INC., a California corporation
By /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
President and Chief Executive Officer
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INVESTORS
E*TRADE Group, Inc.
By /s/
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Title CFO
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BENCHMARK CAPITAL PARTNERS II, L.P.
as nominee for
Benchmark Capital Partners II, L.P.,
Benchmark Founders Fund II, L.P.,
Benchmark Founders Fund II-A, L.P. and
Benchmark Members' Fund II, L.P.
By Benchmark Capital Management Co. II,
L.L.C., general partner
By /s/
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Managing Member
US WEST DATA INVESTMENTS, INC.
By /s/
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Title
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XXXXXXXXX & XXXXX CALIFORNIA
By
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Title
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Signature Page to Critical Path, Inc.
Amendment to Amended and Restated Investors' Rights Agreement
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H&Q CRITICAL PATH INVESTORS, L.P.
By
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Title
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XXXXXXXXX & XXXXX EMPLOYEE VENTURE FUND, L.P.
By
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Title
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CMG@VENTURES II, L.L.C.
By /s/
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Title
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ATTRACTOR LP
By /s/ Xxxxxx Xxxxxxx, MM
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Title Attractor Ventures LLC, GP
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Attractor LP
ATTRACTOR DEARBORN PARTNERS LP
By /s/ Xxxxxx Xxxxxxx, MM
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Title Attractor Ventures LLC, GP
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Attractor LP
Signature Page to Critical Path, Inc.
Amendment to Amended and Restated Investors' Rights Agreement
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ATTRACTOR INSTITUTIONAL
By /s/ Xxxxxx Xxxxxxx, MM
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Title Attractor Ventures LLC, GP
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Attractor LP
NETWORK SOLUTIONS, INC.
By /s/
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Title CFO and Acting COO
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XXXX, XXXXXXX VENTURES V, L.P.
By Fifth MDV Partners, L.L.C.
By /s/ Xxxxxx Xxxxxxx
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Managing Member
XXXX, XXXXXXX VENTURES V, L.P., as nominee
for MDV Entrepreneurs' Network Fund II(A),
L.P. and MDV Entrepreneurs' Network Fund
II(B), L.P.
By Fifth MDV Partners, L.L.C.
By /s/ Xxxxxx Xxxxxxx
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Managing Member
Signature Page to Critical Path, Inc.
Amendment to Amended and Restated Investors' Rights Agreement
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THE XXXXXXXX FAMILY TRUST, XXXXX XXXXXXXX AND
XXXXXXXX XXXXXXXX, TRUSTEES, UAD 1/17/94
By /s/
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Title Trustee
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/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
THE XXXXXXX X. XXXXXX REVOCABLE TRUST, UAD
4/24/97
By /s/
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Title Trustee
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/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
XXXXXX/XXXXXX INVESTMENT POOL II, L.L.C.
By /s/
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Title Member/CFO
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THE COTSAKOS REVOCABLE TRUST, UAD 9/3/87
By
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Signature Page to Critical Path, Inc.
Amendment to Amended and Restated Investors' Rights Agreement
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SOFTBANK TECHNOLOGY VENTURES
By /s/ Xxxx X. Xxxxxxxx
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Title Managing General Partner
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SOFTBANK TECHNOLOGY ADVISORS FUND
By /s/ Xxxx X. Xxxxxxxx
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Title Managing General Partner
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DIGITAL MEDIA CAPITAL, LLC
By /s/ Xxxx X. Xxxxxx
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Title Cheif Operating Officer
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/s/ Xxxx X. Axel
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Xxxx X. Axel
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
/s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
/s/ Xxxx Xxxx
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Signature Path to Critical Path, Inc.
Amendment to Amended and Restated Investors' Right Agreement
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Xxxx X. Xxxx
/s/ Xxxxxxxx Xxxx
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Xxxxxxxx Xxxx
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
/s/ Storey Xxxxx
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Storey Xxxxx
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
/s/ Xxxxxxx Xxxxxx, Xx.
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Xxxxxxx Xxxxxx, Xx.
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Xxxxxx Xxxxxx
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Xxxxx X. XxXxxxx
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
Signature Page to Critical Path, Inc.
Amendment to Amended and Restated Investors' Rights Agreement
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/s/ Minturn X. Xxxxxxx
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Minturn X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
/s/ Xxx Xxxxxxx
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Xxx Xxxxxxx
S.D. LIVING TRUST, XXXXXX X. XXXXX, TRUSTEE
S.D. Living Trust
By /s/ Xxxxxx X. Xxxxx Trustee
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/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
/s/ Xxxxx del Xxxxx
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Xxxxx del Xxxxx
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
/s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx
Signature Page to Critical Path, Inc.
Amendment to Amended and Restated Investors' Rights Agreement
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XXXXX XXXXXXX & XXXXXXXXX XXXXXXX, TRUSTEES,
THE XXXXXXX 1992 REVOCABLE CHILDREN'S TRUST
By
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Xxxxx Xxxxxxx, Trustee
By
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Xxxxxxxxx Xxxxxxx, Trustee
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx III, Custodian
FBO Xxxxxxx Xxxxxx XX
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx III, Custodian
FBO Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Custodian
FBO Matthiah X. Xxxxxx
Signature Page to Critical Path, Inc.
Amendment to Amended and Restated Investors' Rights Agreement
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Xxxxx X. Xxxxxx, Custodian
FBO Xxxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Signature Page to Critical Path, Inc.
Amendment to Amended and Restated Investors' Rights Agreement
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EXHIBIT B
SERIES A SHAREHOLDERS
Benchmark Capital
Xxxx, Xxxxxxx Ventures
CMG@Ventures II, L.L.C.
Softbank Technology Ventures
Softbank Technology Advisors Fund
E*TRADE Group, Inc.
Digital Media Capital, LLC
Xxxxx Xxxxxx
Xxxx Xxxxxxx
Xxxxxxxx Xxxx
Xxxx Xxxxxx
Storey Xxxxx
Xxxxxxx Xxxxxx, Xx.
Xxxxxx Xxxxxx
Xxx Xxxxxxx
S.D. Living Trust,
Xxxxxx X. Xxxxx, Trustee
Xxxxx Xxxxx
Xxxxxx X. Xxxxxx
Xxxx X. Axel
Xxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxxx X. XxXxxxx
Minturn X. Xxxxxxx
Xxxxxx X. Xxxxxxxxx
Xxxx X. Xxxx
Xxxxx X. Xxxx
Xxxxxxx Xxxxxxx
Xxxxx del Xxxxx
Xxxxxxx X. Xxxxxxx
SA-1
EXHIBIT A
LIST OF INVESTORS
SB-1
EXHIBIT C
LIST OF FOUNDERS
Xxxxx Xxxxxx
Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
SC-1
