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Exhibit 10.10
AKAMAI TECHNOLOGIES, INC.
SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
DATED AS OF NOVEMBER 23, 1998
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AKAMAI TECHNOLOGIES, INC.
SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
DATED AS OF NOVEMBER 23, 1998
TABLE OF CONTENTS
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ARTICLE I........................................................................ 1
PURCHASE, SALE AND TERMS OF SHARES............................................... 1
1.01. The Preferred Shares.................................................... 1
1.02. The Converted Shares.................................................... 1
1.03. The Shares.............................................................. 1
1.04. Purchase Price and Closing.............................................. 2
1.05. Use of Proceeds......................................................... 3
1.06. Representations and Warranties by the Purchasers........................ 3
ARTICLE II....................................................................... 4
CONDITIONS TO PURCHASERS' OBLIGATION............................................. 4
2.01. Representations and Warranties.......................................... 4
2.02. Documentation at Closing................................................ 4
2.03. Additional Closing Conditions........................................... 5
2.04. Consents, Waivers, Etc.................................................. 6
2.04. Subsequent Closing Bring-Down Representations and Warranties............ 6
ARTICLE III...................................................................... 6
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................... 6
3.01. Organization and Standing............................................... 6
3.02. Corporate Action........................................................ 7
3.03. Governmental Approvals.................................................. 7
3.04. Litigation.............................................................. 7
3.05. Certain Agreements of Officers and Key Employees........................ 8
3.06. Compliance with Other Instruments....................................... 8
3.07. Condition, Absence of Activities........................................ 8
3.08. ERISA................................................................... 9
3.09. Transactions with Affiliates............................................ 9
3.10. Assumptions or Guaranties of Indebtedness of Other Persons.............. 9
3.11. Investments in Other Persons............................................ 9
3.12. Securities Act of 1933.................................................. 9
3.13. Disclosure.............................................................. 9
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3.14. Brokers or Finders...................................................... 10
3.15. Capitalization; Status of Capital Stock................................. 10
3.16. Registration Rights..................................................... 11
3.17. Books and Records....................................................... 11
3.18. Title to Assets, Patents................................................ 11
3.19. The Year 2000........................................................... 11
ARTICLE IV....................................................................... 12
COVENANTS OF THE COMPANY......................................................... 12
4.01. Affirmative Covenants of the Company Other Than Reporting
Requirements............................................................ 12
4.02. Negative Covenants of the Company....................................... 15
4.03. Reporting Requirements.................................................. 17
ARTICLE V........................................................................ 19
RIGHT OF FIRST REFUSAL........................................................... 19
5.01. Right of First Refusal.................................................. 19
5.02. Notice of Acceptance.................................................... 19
5.03. Conditions to Acceptances and Purchase.................................. 19
5.04. Further Sale............................................................ 20
5.05. Termination of Right of First Refusal................................... 20
5.06. Exception............................................................... 20
ARTICLE VI....................................................................... 21
DEFINITIONS AND ACCOUNTING TERMS................................................. 21
6.01. Certain Defined Terms................................................... 21
6.02. Accounting Terms........................................................ 24
6.03. Knowledge............................................................... 24
ARTICLE VII...................................................................... 24
MISCELLANEOUS.................................................................... 24
7.01. No Waiver; Cumulative Remedies.......................................... 24
7.02. Amendments, Waivers and Consents........................................ 24
7.03. Addresses for Notices................................................... 25
7.04. Costs, Expenses and Taxes............................................... 25
7.05. Binding Effect; Assignment.............................................. 25
7.06. Survival of Representations and Warranties.............................. 26
7.07. Prior Agreements........................................................ 26
7.08. Severability............................................................ 26
7.09. Governing Law........................................................... 26
7.10. Headings................................................................ 26
7.11. Counterparts............................................................ 26
7.12. Further Assurances...................................................... 26
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7.13. Indemnification......................................................... 26
EXHIBITS
1.01 List of Purchasers
1.01A Designation of Series A Convertible Preferred Stock
1.04(b) Additional Purchasers not requiring Battery Ventures IV, L.P. Approval
2.02B Opinion of Counsel
2.03B Stockholders Agreement
2.03E Registration Rights Agreement
2.03GA Form of Noncompetition and Nonsolicitation Agreement
2.03GB Form of Invention and Nondisclosure Agreement
2.03HA Form of Stock Restriction Agreement
2.03HB Form of Right of First Refusal Agreement
3.01 Foreign Qualifications
3.04 Litigation
3.07 Condition, Absence of Activities
3.09 Transactions with Affiliates
3.11 Investments in Other Persons
3.15 Capitalization; Status of Capital Stock
3.18(a) Title of Assets; Patents
3.18(b) List of patents, trademarks, tradenames, permits and licenses
3.18(c) Compensation for use of patents and other intellectual property rights
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AKAMAI TECHNOLOGIES, INC.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
As of November 23, 1998
TO: The Persons listed on Exhibit 1.01 hereto
Re: Series A Convertible Preferred Stock
Ladies and Gentlemen:
Akamai Technologies, Inc., a Delaware corporation (the "Company"),
agrees with each of you as follows:
ARTICLE I
PURCHASE, SALE AND TERMS OF SHARES
1.01. The Preferred Shares. The Company has authorized the issuance and
sale of up to 1,100,000 shares (the "Preferred Shares") of its previously
authorized but unissued shares of Series A Convertible Preferred Stock, par
value $.01 per share (the "Series A Preferred Stock"), at a purchase price of
$7.60 per share to the persons (collectively, the "Purchasers" and,
individually, a "Purchaser") and in the respective amounts set forth in Exhibit
1.01 hereto. The designation, rights, preferences and other terms and conditions
relating to the Series A Preferred Stock are as set forth on Exhibit 1.01A
hereto.
1.02. The Converted Shares. The Company has authorized and has reserved
and covenants to continue to reserve, free of preemptive rights and other
preferential rights, a sufficient number of its previously authorized but
unissued shares of Common Stock to satisfy the rights of conversion of the
holders of the Preferred Shares. Any shares of Common Stock issuable upon
conversion of the Preferred Shares, and such shares when issued, are herein
referred to as the "Converted Shares."
1.03. The Shares. The Preferred Shares and the Converted Shares are
sometimes collectively referred to herein as the "Shares."
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1.04. Purchase Price and Closing.
(a) The Initial Closing. The Company agrees to issue and sell
to the Purchasers and, subject to and in reliance upon the representations,
warranties, covenants, terms and conditions of this Agreement, the Purchasers,
severally but not jointly, agree to purchase that number of the Preferred Shares
set forth opposite their respective names in Exhibit 1.01. The aggregate
purchase price of the Preferred Shares being purchased by each Purchaser is set
forth opposite such Purchaser's name in Exhibit 1.01. The purchase and sale
shall take place at a closing (the "Initial Closing") to be held on or before
November 23, 1998, at 10:00 A.M., at such location and at such time as may be
mutually agreed upon, subject to the satisfaction of all of the conditions to
the Closing specified in Article II herein. At the Initial Closing the Company
will issue and deliver certificates evidencing the Preferred Shares to be sold
at the Initial Closing to each of the Purchasers (or its nominee) against
payment of the full purchase price therefor by(i) wire transfer of immediately
available funds to an account designated by the Company, (ii) check payable to
the order of the Company or its designee (iii) delivery to the Company for
cancellation promissory notes issued by the Company, or (iv) any combination of
(i), (ii) and (iii) above.
(b) Subsequent Closings. In the event that the Company shall
not have sold all 1,100,000 shares of the Preferred Shares at the Initial
Closing, the Company and the Purchasers agree that at one or more subsequent
closings (collectively, the "Subsequent Closings" and, individually, a
"Subsequent Closing"; the Initial Closing and each Subsequent Closing referred
to herein as a "Closing" and collectively as the "Closings"), the Company may
issue and sell any of the unsold Preferred Shares ("Additional Shares") to one
or more accredited investors who shall be subject to the approval (which
approval shall not be unreasonably withheld) of each of Battery Ventures IV,
L.P. ("Battery") and the Board of Directors of the Company (the "Additional
Purchasers", which Additional Purchasers may also be Purchasers or affiliates of
Purchasers); provided, however, that no such approval of Battery shall be
required with respect to any Additional Purchasers who (i) are listed on Exhibit
1.04(b) or (ii) are admitted as Additional Purchasers after January 1, 1999. In
all events each such Subsequent Closing (other than with respect to the option
of Battery and Battery Investments Partners IV, LLC to purchase Additional
Shares as set forth below) shall occur on or before January 31, 1999 and,
provided, further, any shares sold to any of the Additional Purchasers (other
than Battery or any of its affiliates) shall not exceed 501,320 of the Preferred
Shares, of which no more than 80,264 of such Preferred Shares shall be issuable
pursuant to conversion of existing indebtedness or contractual obligations of
the Company. The Company and the Purchasers further agree that (i) the Company
shall amend this Agreement solely to provide for the issuance of the Additional
Shares to the Additional Purchasers under the terms and conditions of this
Agreement and (ii) the Additional Purchasers shall become parties to this
Agreement as amended by executing counterparts hereof. At least 20 days prior to
the date of each Subsequent Closing, the Company shall notify Battery, and
provide Battery with the right (but not the obligation) to exercise the option
(described in Section 1.04(c) below) at the time of such Subsequent Closing.
Notwithstanding the foregoing, in the event that the Company sells at least
263,158 Additional Shares to a single Additional Purchaser (or group of
affiliated Additional Purchasers) at any Subsequent Closing, then the option
provided to Battery (as described in Section 1.04(c)) shall
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expire if not exercised at such Subsequent Closing following the notice provided
for in the preceding sentence.
(c) In the event the Company shall not have sold all 1,100,000
shares of the Preferred Shares by January 31, 1999 the Company, Battery and
Battery Investment Partners IV, LLC agree that on such date Battery and Battery
Investment Partners IV, LLC, pro rata in accordance with their respective
purchases of Preferred Shares at the Initial Closing (i.e., 98.5% and 1.5%,
respectively), shall have the option, exercisable in their sole discretion upon
not less than ten (10) days' notice to the Company given no later than March 1,
1999, to purchase from the Company up to a maximum of 131,579 of any unsold
Preferred Shares at a Subsequent Closing under the terms and conditions of this
Agreement. The terms "Preferred Shares", "Purchaser" and "Purchasers", when used
in this Agreement, shall respectively be deemed to include such Additional
Shares as are issued and such Additional Purchaser and Additional Purchasers as
exist from time to time.
(d) Each Subsequent Closing shall be held at such location and
at such times and dates, but on or before January 31, 1999, as shall be
specified by the Company and the Additional Purchasers. At each Subsequent
Closing, the Company will issue and deliver certificates evidencing the
Additional Shares to be sold at such Subsequent Closing against payment of the
full purchase price by (i) wire transfer of immediately available funds to an
account designated by the Company, (ii) check payable to the order of the
Company or its designee (iii) delivery to the Company for cancellation
promissory notes issued by the Company, or (iv) any combination of (i), (ii) and
(iii) above. The purchase price for Additional Shares to be sold at Subsequent
Closings shall not be less than the purchase price of the shares of Preferred
Stock sold at the Initial Closing. At each Subsequent Closing from and after
December 1, 1998, the Purchasers purchasing Additional Preferred Shares at such
Subsequent Closing shall have received a certificate from the President of the
Company stating that the representations and warranties of the Company contained
in Article III hereof and otherwise made by the Company in writing in connection
with the transactions contemplated hereby are true and correct (giving effect to
updates, if any, to the exhibits setting forth exceptions to the representations
and warranties of the Company) and that all conditions required to be performed
prior to or at each such Subsequent Closing have been performed as of such
Subsequent Closing (each such certificate referred to herein as a "Bring-Down
Certificate").
1.05. Use of Proceeds. The Company shall use the proceeds for working
capital and general corporate purposes.
1.06. Representations and Warranties by the Purchasers. Each of the
Purchasers represents and warrants severally, but not jointly, that (a) it will
acquire the Preferred Shares to be acquired by it for its own account and that
the Preferred Shares are being and will be acquired by it for the purpose of
investment and not with a view to distribution or resale thereof; (b) the
execution of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of such Purchaser, and this Agreement has been duly executed and delivered,
and constitutes a valid, legal, binding and enforceable agreement of such
Purchaser; (c) it has taken no action which would give rise to any claim by
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any other person for any brokerage commissions, finders' fees or the like
relating to this Agreement or the transactions contemplated hereby; (d) such
Purchaser has had the opportunity to ask questions of and receive answers from
representatives of the Company concerning the terms of the offering of the
Preferred Shares and to obtain additional information concerning the Company and
its business; and (e) such Purchaser has the ability to evaluate the merits and
risks of an investment in the Preferred Shares and can bear the economic risks
of such investment. The acquisition by each Purchaser of the Preferred Shares
acquired by it shall constitute a confirmation of the representations and
warranties made by each such Purchaser as at the date of such acquisition. Each
of the Purchasers further represents that it understands and agrees that, until
registered under the Securities Act or transferred pursuant to the provisions of
Rule 144 as promulgated by the Commission, all certificates evidencing any of
the Shares, whether upon initial issuance or upon any transfer thereof, shall
bear a legend, prominently stamped or printed thereon, reading substantially as
follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, MORTGAGED,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933 AND APPLICABLE STATE SECURITIES LAWS, OR THE AVAILABILITY OF AN
EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT OF
1933 AND APPLICABLE STATE SECURITIES LAWS."
ARTICLE II
CONDITIONS TO PURCHASERS' OBLIGATION
The obligation of each Purchaser to purchase and pay for the Preferred
Shares to be purchased by it at the Initial Closing is subject to the
satisfaction of the following conditions:
2.01. Representations and Warranties. Each of the representations and
warranties of the Company set forth in Article III hereof shall be true and
correct on the date of the Initial Closing.
2.02. Documentation at Closing. The Purchasers shall have received
prior to or at the Closing all of the following documents or instruments, or
evidence of completion thereof, each in form and substance satisfactory to the
Purchasers and their special counsel:
(a) A copy of the Certificate of Incorporation of the Company
(the "Certificate of Incorporation"), certified by the Secretary of State of the
State of Delaware together with a certified copy of the Certificate of
Designation of the Series A Preferred Stock, a copy of the resolutions of the
Board of Directors and, if required, the stockholders of the Company evidencing
the adoption of the Company's Certificate of Designation of the Series A
Preferred Stock, the approval of this Agreement, the issuance of the Preferred
Shares and the
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other matters contemplated hereby, and a copy of the By-laws of the Company, all
of which shall have been certified by the Secretary of the Company to be true,
complete and correct in every particular, and certified copies of all documents
evidencing other necessary corporate or other action and governmental approvals,
if any, with respect to this Agreement and the Shares.
(b) The opinion of ▇▇▇▇ and ▇▇▇▇ LLP, counsel to the Company,
in the form of Exhibit 2.02B attached hereto.
(c) A certificate of the Secretary of the Company which shall
certify the names of the officers of the Company authorized to sign this
Agreement, the certificates for the Preferred Shares and the other documents,
instruments or certificates to be delivered pursuant to this Agreement by the
Company or any of its officers, together with the true signatures of such
officers. The Purchasers may conclusively rely on such certificate until they
shall receive a further certificate of the Secretary or an Assistant Secretary
of the Company canceling or amending the prior certificate and submitting the
signatures of the officers named in such further certificate.
(d) A certificate of the President of the Company stating that
the representations and warranties of the Company contained in Article III
hereof and otherwise made by the Company in writing in connection with the
transactions contemplated hereby are true and correct and that all conditions
required to be performed prior to or at the Initial Closing have been performed
as of the Initial Closing.
(e) Certificates of Good Standing for the Company from the
Secretaries of State of the States of Delaware and California, and the
Commonwealth of Massachusetts shall have been provided to counsel to the
Purchasers.
2.03. Additional Closing Conditions. The Purchasers shall have received
prior to or at the Closing evidence of satisfaction or completion of the
following, in form and substance satisfactory to the Purchasers and their
special counsel:
(a) The Certificate of Designation of the Series A Preferred
Stock shall provide for the designation of the rights and preferences of the
Series A Preferred Stock in the form set forth in Exhibit 1.01A attached hereto
(the "Certificate of Designation").
(b) A Stockholders Agreement in the form set forth in Exhibit
2.03B shall have been executed by the parties named therein.
(c) The Company shall have paid the costs, expenses, taxes and
filing fees identified in Section 7.04.
(d) The Board of Directors of the Company following the
Initial Closing shall consist of five (5) members, of which the members shall
be: ▇▇▇▇▇▇ ▇▇▇▇▇, ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇, with the remaining
members to be designated in accordance with the terms of the Stockholders
Agreement.
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(e) The Company and the Purchasers shall have entered into a
Registration Rights Agreement in the form set forth in Exhibit 2.03E.
(f) The Company's By-laws shall be in form and substance
reasonably satisfactory to the Purchasers and their special counsel; and not in
limitation of the foregoing, shall provide that the Chief Executive Officer
shall be designated and elected by the Company's Board of Directors.
(g) Each of the Founders shall have entered into a
non-competition and non-solicitation agreement and an invention and
non-disclosure agreement in the forms attached hereto as Exhibit 2.03GA and
Exhibit 2.03GB, respectively.
(h) Each of the Founders and each of ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇ shall have entered into a Stock Restriction Agreement substantially in the
form attached hereto as Exhibit 2.03HA. Each of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
Nijahwan shall have entered into a Right of First Refusal Agreement
substantially in the form attached hereto as Exhibit 2.03HB.
2.04. Consents, Waivers, Etc. Prior to the Initial Closing, the Company
shall have obtained all consents or waivers, if any, necessary to execute and
deliver this Agreement, issue the Preferred Shares and to carry out the
transactions contemplated hereby and thereby, and all such consents and waivers
shall be in full force and effect. All corporate and other action and
governmental filings necessary to effectuate the terms of this Agreement, the
Preferred Shares and other agreements and instruments executed and delivered by
the Company in connection herewith shall have been made or taken, except for any
post-sale filing that may be required under federal or state securities laws. In
addition to the documents set forth above, the Company shall have provided to
the Purchasers any other information or copies of documents that they may
reasonably request.
2.05. Bring-Down Certificate. At each Subsequent Closing from and after
December 1, 1998, the Purchasers purchasing Additional Preferred Shares at such
Subsequent Closing shall have received a Bring-Down Certificate.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants as follows as of the date
hereof and as of the date of the Initial Closing:
3.01. Organization and Standing. The Company is a duly organized and
validly existing corporation in good standing under the corporate laws of the
State of Delaware and has all requisite corporate power and authority for the
ownership and operation of its properties and
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for the carrying on of its business as now conducted or as now proposed to be
conducted. The Company is duly licensed or qualified and in good standing as a
foreign corporation authorized to do business in all jurisdictions wherein the
character of the property owned or leased, or the nature of the activities
conducted, by it makes such licensing or qualification necessary as set forth in
Exhibit 3.01, except where the failure to so qualify would not have a material
adverse effect on the business, operations, affairs or condition of the Company
or in its properties or assets taken as a whole, or which might call into
question the validity of this Agreement, any of the Shares, or any action taken
or to be taken pursuant hereto or thereto (a "Material Adverse Effect").
3.02. Corporate Action. The Company has all necessary corporate power
and has taken all corporate action required to enter into and perform this
Agreement, the Registration Rights Agreement, the Stockholders Agreement and any
other agreements and instruments executed in connection herewith (collectively,
the "Financing Documents"). The Financing Documents are valid and binding
obligations of the Company, enforceable in accordance with their terms. The
issuance, sale and delivery of the Preferred Shares in accordance with this
Agreement, and the issuance, sale and delivery of the Converted Shares have been
duly authorized and reserved for issuance, as the case may be, by all necessary
corporate action on the part of the Company. Sufficient authorized but unissued
shares of Common Stock have been reserved by appropriate corporate action in
connection with the prospective conversion of the Preferred Shares at the
initial conversion price, and the issuance of the Preferred Shares is not, and
the issuance of the Converted Shares upon the conversion of the Preferred Shares
will not be, subject to preemptive rights or other preferential rights in any
present stockholders of the Company and will not conflict with any provision of
any agreement or instrument to which the Company is a party or by which it or
its property is bound.
3.03. Governmental Approvals. Except for the filing of any notice
subsequent to the Closing that may be required under applicable state and/or
federal securities laws (which, if required, shall be filed on a timely basis
and a copy of which shall be provided to the Purchasers and their counsel), no
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for the execution and delivery by the Company of this Agreement, for the offer,
issue, sale and delivery of the Preferred Shares, or for the performance by the
Company of its obligations under this Agreement or the Shares.
3.04. Litigation. Except as set forth in Exhibit 3.04, there is no
litigation or governmental proceeding or investigation pending or, to the
knowledge of the Company, threatened against the Company affecting any of its
respective properties or assets, or against any officer, Key Employee or holder
of more than 5% of the capital stock of the Company (other than any Purchaser)
relating to such person's performance of duties for the Company or relating to
his stock ownership in the Company or otherwise relating to the business of the
Company, nor to the knowledge of the Company has there occurred any event or
does there exist any condition on the basis of which any such litigation,
proceeding or investigation might property be instituted. Neither the Company
nor, to the knowledge of the Company, any officer, Key Employee or holder of
more than 5% of the capital stock of the Company (other than any
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Purchaser) is in default with respect to any order, writ, injunction, decree,
ruling or decision of any court, commission, board or other government agency
specifically naming the Company such officer, Key Employee or holder of more
than 5% of the capital stock of the Company. Except as set forth in Exhibit
3.04, there are no actions or proceedings pending or, to the knowledge of the
Company, threatened against the Company or against any officer or Key Employee
which could reasonably be expected to result, either in any case or in the
aggregate, in any Material Adverse Effect. The foregoing sentences include,
without limiting their generality, actions pending or, to the knowledge of the
Company, threatened (or any basis therefor), involving the prior employment of
any of the Company's officers or employees (including any Key Employees) or
their use in connection with the Company's business of any information or
techniques allegedly proprietary to any of their former employers.
3.05. Certain Agreements of Officers and Key Employees.
(a) To the knowledge of the Company, no officer or Key
Employee of the Company is in violation of any term of any employment contract,
patent disclosure agreement, proprietary information agreement, noncompetition
agreement, or any other contract or agreement or any restrictive covenant
relating to the right of any such officer or Key Employee to be employed by the
Company because of the nature of the business conducted or to be conducted by
the Company or relating to the use of trade secrets or proprietary information
of others, and, to the Company's knowledge, the continued employment of the
Company's officers and Key Employees does not subject the Company or any
Purchaser to any liability to third parties.
(b) To the knowledge of the Company, no officer of the Company
nor any Key Employee of the Company whose termination, either individually or in
the aggregate, would have a Material Adverse Effect, has expressed any present
intention of terminating his employment with the Company.
3.06. Compliance with Other Instruments. The Company is in compliance
in all respects with the terms and provisions of this Agreement and of its
Certificate of Incorporation and By-laws, and in all material respects with the
terms and provisions of all mortgages, indentures, leases, agreements and other
instruments by which it is bound or to which it or any of its respective
properties or assets are subject. The Company is in compliance with all
judgments specifically naming the Company or any of the Founders, decrees,
governmental orders specifically naming the Company or any of the Founders,
statutes, rules or regulations by which it is bound or to which any of its
properties or assets are subject. Neither the execution and delivery of this
Agreement or the issuance of the Shares, nor the consummation of any transaction
contemplated by this Agreement, has constituted or resulted in or will
constitute or result in a default or violation of any term or provision of any
of the foregoing documents, instruments, judgments, agreements, decrees, orders,
statutes, rules and regulations.
3.07. Condition, Absence of Activities. The Company was incorporated as
a Delaware corporation on August 20, 1998. Except as set forth in Exhibit 3.07,
the Company owns no assets and has no liabilities of any kind, including
contingent liabilities, liabilities for taxes or
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agreements or commitments, but excluding trade payables that have occurred in
the ordinary course of business since August 20, 1998. Except as set forth in
Exhibit 3.07 the Company has not conducted any business activities or executed
any material agreements. Not in limitation of the foregoing, the Company has
entered into "beta" agreements with each of Buena Vista Internet Group (an
affiliate of Disney), Universal Studios Online Inc., and Metro-Goldwyn Mayer
Studios Inc. The Company has not paid any dividends or made any distributions on
or purchased or otherwise acquired any shares of its capital stock.
3.08. ERISA. The Company does not make and has no present intentions to
make any contributions to any employee pension benefit plans for its employees
that are subject to ERISA.
3.09. Transactions with Affiliates. Except as set forth on Exhibit
3.09, as contemplated hereby or consented to by the Purchasers in accordance
with this Agreement, there are no loans, leases, royalty agreements or other
continuing transactions between any Founder, officer, employee or director of
the Company or any Person owning 5% or more of any class of capital stock of the
Company or any member of the immediate family of such Founder, officer,
employee, director or stockholder or any corporation or other entity controlled
by such officer, employee, director or stockholder or a member of the immediate
family of such officer, employee, director or stockholder.
3.10. Assumptions or Guaranties of Indebtedness of Other Persons.
Except as contemplated hereby or consented to by the Purchasers in accordance
with this Agreement, the Company has not assumed, guaranteed, endorsed or
otherwise become directly or contingently liable on (including, without
limitation, liability by way of agreement, contingent or otherwise, to purchase,
to provide funds for payment, to supply funds to or otherwise invest in the
debtor or otherwise to assure the creditor against loss), any Indebtedness of
any other Person.
3.11. Investments in Other Persons. Except as contemplated hereby or
consented to by the Purchasers in accordance with this Agreement, the Company
has not made any loan or advance to any Person which is outstanding on the date
of this Agreement, nor is it committed or obligated to make any such loan or
advance, nor does the Company own any capital stock, assets comprising the
business of, obligations of, or any interest in, any Person except as disclosed
in this Agreement. The Company has no Subsidiaries.
3.12. Securities Act of 1933. The Company has complied with all
applicable federal and state securities laws in connection with the offer,
issuance and sale of the Shares. Prior to the Closing, neither the Company nor
anyone acting on its behalf has sold, offered to sell or solicited offers to buy
the Shares or similar securities to, or solicit offers with respect thereto
from, or entered into any preliminary conversations or negotiations relating
thereto with, any Person, so as to bring the issuance and sale of the Shares
under the registration provisions of the Securities Act, and applicable state
securities laws.
3.13. Disclosure. Neither this Agreement nor any other agreement,
document, certificate or written statement furnished to the Purchasers or their
special counsel by or on behalf of the Company in connection with the
transactions contemplated hereby contains any
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untrue statement of a material fact or omits to state a material fact relating
directly to the Company necessary in order to make the statements contained
herein or therein not misleading. There is no fact within the knowledge of the
Company which has not been disclosed herein or in writing to the Purchasers and
which taken by itself would constitute a circumstance having a Material Adverse
Affect. The projections contained in the Business Plan were prepared in good
faith and with a good faith belief in the reasonableness of the assumptions used
therein, but which the Company cannot and does not assure or guarantee the
attainment of in any manner. Without limiting the generality of the foregoing,
the Company does not have any knowledge that there exists, or there is pending
or planned, any statute, rule, law, regulation, standard or code which would
have a Material Adverse Affect on the Company's business.
3.14. Brokers or Finders. No Person has or will have, as a result of
the transactions contemplated by this Agreement, any right, interest or valid
claim against or upon the Company for any commission, fee or other compensation
as a finder or broker because of any act or omission by the Company or any of
their respective agents.
3.15. Capitalization; Status of Capital Stock. The Company has a total
authorized capitalization consisting of (i) 5,000,000 shares of Common Stock,
par value $.01 per share, of which 1,832,400 shares are issued and outstanding
and (ii) 2,000,000 shares of Preferred Stock, par value $.01 per share, of which
1,100,000 shares are designated as Series A Convertible Preferred Stock, of
which no shares are issued and outstanding on the date hereof, prior to giving
effect to the transactions contemplated hereby. A complete list of the capital
stock of the Company that has been previously issued and the names in which such
capital stock is registered on the stock transfer books of the Company is set
forth in Exhibit 3.15 hereto. All the outstanding shares of capital stock of the
Company have been duly authorized, and are validly issued, fully paid and
non-assessable. The Preferred Shares, when issued and delivered in accordance
with the terms hereof and after payment of the purchase price therefor, and the
Converted Shares, when issued and delivered upon conversion of the Preferred
Shares, will be duly authorized, validly issued, fully-paid and non-assessable.
Except as otherwise set forth in Exhibit 3.15, no options, warrants,
subscriptions or purchase rights of any nature to acquire from the Company
shares of capital stock or other securities are authorized, issued or
outstanding, nor is the Company obligated in any other manner to issue shares of
its capital stock or other securities except as contemplated by this Agreement.
Except as set forth in Exhibit 3.15, there are no restrictions on the transfer
of shares of capital stock of the Company other than those imposed by relevant
federal and state securities laws and as otherwise contemplated by this
Agreement, the Stockholders' Agreement referred to in Section 2.03(b), the
Registration Rights Agreement referred to in Section 2.03(e), the Certificate of
Designation referred to in Section 2.03(a) and the Stock Restriction and Right
of First Refusal Agreements referred to in Section 2.03(h). Other than as
provided in this Section, there are no agreements, understandings, trusts or
other collaborative arrangements or understandings concerning the voting of the
capital stock of the Company. The offer and sale of all capital stock and other
securities of the Company issued before the Closing complied with or were exempt
from all applicable federal and state securities laws and no stockholder has a
right of rescission with respect thereto.
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3.16. Registration Rights. Except for the rights granted to the
Purchasers pursuant to Registration Rights Agreement referred to in Section
2.03(e) hereof, no Person has demand or other rights to cause the Company to
file any registration statement under the Securities Act relating to any
securities of the Company or any right to participate in any such registration
statement.
3.17. Books and Records. The books of account, ledgers, order books,
records and documents of the Company accurately and completely reflect all
material information relating to the business of the Company, the location and
collection of its assets, and the nature of all transactions giving rise to the
obligations or accounts receivable of the Company.
3.18. Title to Assets, Patents. The Company has good and marketable
title in fee to such of its fixed assets, if any, as are real property, and good
and marketable title to all of its other assets and properties, free of any
mortgages, pledges, charges, liens, security interests or other encumbrances,
except those occurring in the ordinary course of business and those indicated on
Exhibit 3.18(a). The Company enjoys peaceful and undisturbed possession under
all leases under which it is operating, and all said leases are valid and
subsisting and in full force and effect. The Company does not know of any
adverse claim that would interfere with the Company's right to use the patents,
patent rights, permits, licenses, trade secrets, trademarks, trademark rights,
trade names or trade name rights or franchises, copyrights, inventions, software
and intellectual property rights being used to conduct its business as now
operated and as now proposed to be operated (a list of all such patents,
trademarks, trade names, permits, and licenses used by the Company in the
operation of its business and all material is attached hereto as Exhibit
3.18(b)); and the Company does not have any reason to believe that the conduct
of the Company's business as now operated and as now proposed to be operated
conflicts or will conflict with valid patents, patent rights, permits, licenses
granted to the Company (other than off the shelf), trade secrets, trademarks,
trademark rights, trade names or trade name rights or franchises, copyrights,
inventions, and intellectual property rights of any other Person. To the
Company's knowledge, no product or process presently used or proposed to be
manufactured, marketed, offered, sold or used by the Company will violate any
license or infringe on any intellectual property rights of any other Person; and
neither the Company's intellectual property rights nor the operation or proposed
operation of the Company's business is known by the Company to conflict with the
asserted rights of others, nor does there exist any known basis for any such
conflict. No claim is known by the Company to be pending or threatened to the
effect that any such intellectual property owned or licensed by the Company, or
which the Company otherwise has the right to use, is invalid or unenforceable by
the Company, and the Company does not have any reason to believe that any
patents or intellectual property rights owned or used by the Company may be
invalid. Except as set forth in Exhibit 3.18(c), the Company has no obligation
known by the Company to compensate any Person for the use of any such patents or
other intellectual property rights, and the Company has not granted any Person
any license or other rights to use in any manner any of the patents or rights of
the Company, whether requiring the payment of royalties or not.
3.19. The Year 2000. The Company has used reasonable procedures to
verify that its software will recognize and process date fields after the turn
of the century, and perform date-
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dependent calculations and operations (including sorting, comparing and
reporting) after the turn of the century correctly, and has used reasonable
efforts to ensure that its software will not produce invalid and/or incorrect
results as a result of the change of century (all without human intervention,
other than original data entry of valid dates), provided that the software
receives correct and properly formatted date inputs from all software and
hardware that exchanges data with or provides data to the software.
ARTICLE IV
COVENANTS OF THE COMPANY
4.01. Affirmative Covenants of the Company Other Than Reporting
Requirements. Without limiting any other covenants and provisions hereof, the
Company covenants and agrees that until the consummation of a Qualified Public
Offering, it will perform and observe the following covenants and provisions,
and will cause each Subsidiary, if and when such Subsidiary exists, to perform
and observe such of the following covenants and provisions as are applicable to
such Subsidiary:
(a) Payment of Taxes and Trade Debt. Pay and discharge, and
cause each Subsidiary to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income, profits or
business, or upon any properties belonging to it, prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid, might become a
lien or charge upon any properties of the Company or any Subsidiary, provided
that neither the Company nor any Subsidiary shall be required to pay any such
tax, assessment, charge, levy or claim which is being contested in good faith
and by appropriate proceedings if the Company or any Subsidiary shall have set
aside on its books sufficient reserves, if any, with respect thereto. Pay and
cause each Subsidiary to pay, when due, or in conformity with customary trade
terms, all lease obligations, all trade debt, and all other Indebtedness
incident to the operations of the Company or its Subsidiaries, except such as
are being contested in good faith and by proper proceedings if the Company or
Subsidiary concerned shall have set aside on its books sufficient reserves, if
any, with respect thereto.
(b) Maintenance of Insurance. Obtain and maintain from
reputable insurance companies or associations a term life insurance policy on
the lives of each of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ the face amount equal to
$2,000,000 each (so long as each remains an employee of the Company), which
proceeds will be payable to the order of the Company. Within ten (10) days after
the Initial Closing, obtain insurance with a reputable insurance company or
association in such amount and covering such risks as is customary coverage
covering its properties and businesses customarily carried by companies engaged
in similar businesses and owning similar properties in the same general areas in
which the Company or any Subsidiary operates for the type and scope of its
properties and businesses and maintain, and cause each Subsidiary to maintain,
such insurance. The Company will not cause or permit any assignment of the
proceeds of the life insurance policies specified in the first sentence of this
paragraph and will not borrow against such policies. The Company will add
Battery
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Ventures IV, L.P. as a notice party to such policies and will request that the
issuer(s) of such policies provide such designee with at least ten (10) days'
notice before either such policy is terminated (for failure to pay premiums or
otherwise) or assigned, or before any change is made in the designation of a
beneficiary thereof.
(c) Preservation of Corporate Existence. Preserve and
maintain, and, unless the Company deems it not to be in its best interests,
cause each Subsidiary to preserve and maintain, its corporate existence, rights,
franchises and privileges in the jurisdiction of its incorporation, and qualify
and remain qualified, and cause each Subsidiary to qualify and remain qualified,
as a foreign corporation in each jurisdiction in which such qualification is
necessary or desirable in view of its business and operations or the ownership
or lease of its properties. Use commercially reasonable best efforts to secure,
preserve and maintain, and cause each Subsidiary to use commercially reasonable
best efforts to secure, preserve and maintain, all licenses and other rights to
use patents, processes, licenses, permits, trademarks, trade names, inventions,
intellectual property rights or copyrights owned or possessed by it and deemed
by the Company to be material to the conduct of its business or the business of
any Subsidiary.
(d) Compliance with Laws. Comply, and cause each Subsidiary to
comply, with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority, where noncompliance would have a Material
Adverse Affect.
(e) Inspection. Permit, upon reasonable request and notice,
each of the Purchasers who holds at least 65,789 shares of the outstanding
Preferred Shares (as equitably adjusted for stock splits, stock dividends and
the like) or any authorized agents or representatives thereof to examine and
make copies of and extracts from the records and books of account of, and visit
and inspect the properties of the Company and any Subsidiary, to discuss the
affairs, finances and accounts of the Company and any Subsidiary with any of its
officers, directors or Key Employees and independent accountants, and consult
with and advise the management of the Company and any Subsidiary as to their
affairs, finances and accounts, all at reasonable times and upon reasonable
notice. Each Purchaser agrees that it will maintain the confidentiality of any
information so obtained by it which is not otherwise available from other
sources, subject to the disclosure of information of a non-technical nature,
including financial information, which such Purchaser discloses to its partners
and/or shareholders generally.
(f) Keeping of Records and Books of Account. Keep, and cause
each Subsidiary to keep, adequate records and books of account in which complete
entries will be made in accordance with generally accepted accounting principles
consistently applied, reflecting all financial transactions of the Company and
any Subsidiary, and in which, for each fiscal year, all proper reserves for
depreciation, depletion, return of merchandise, obsolescence, amortization,
taxes, bad debts and other purposes in connection with its business shall be
made.
(g) Maintenance of Properties; Material Assets. Use
commercially reasonable best efforts to maintain and preserve, and cause each
Subsidiary to use commercially reasonable best efforts to maintain and preserve,
all of its properties and assets, necessary for the proper conduct of its
business, in good repair, working order and condition, ordinary wear and
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tear excepted; including, without limitation, the maintenance and preservation
of any material patents, licenses, permits or agreements being used by the
Company in its business as now operated and as now proposed to be operated,
including that certain patent and license agreement dated October 26, 1998 by
and between the Massachusetts Institute of Technology ("MIT") and the Company
(the "License Agreement"). The Company shall continue to use its best efforts to
seek to obtain the assignment of all rights (including any and all patent rights
and copyrights) of those individuals known to be authors of the Program as such
term is defined in the License Agreement.
(h) Compliance with ERISA. Comply, and cause each Subsidiary
to comply, with all minimum funding requirements applicable to any pension,
employee benefit plans or employee contribution plans which are subject to ERISA
or to the Internal Revenue Code of 1986, as amended (the "Code"), and comply,
and cause each Subsidiary to comply, in all other material respects with the
provisions of ERISA and the Code, and the rules and regulations thereunder,
which are applicable to any such plan. Neither the Company nor any Subsidiary
will permit any event or condition to exist which could permit any such plan to
be terminated under circumstances which would cause the lien provided for in
Section 4068 of ERISA to attach to the assets of the Company or any Subsidiary.
(i) Budgets Approval. Not later than 45 days prior to the
commencement of each fiscal year, prepare and submit to, and obtain the approval
of a majority of the Board of Directors of, a business plan and monthly
operating budgets in reasonable detail for the next fiscal year, including
capital and operating expense budgets, cash flow projections and profit and loss
projections, all itemized in reasonable detail (including itemization of
provisions for officers' compensation). The budget and business plan shall be
reviewed by the Company periodically, and all changes therein and all material
deviations therefrom shall be resubmitted to the Board of Directors. The Company
shall not enter into any activity not in the ordinary course of business and not
envisioned by the budget and business plan, unless approved by the affirmative
vote of a majority of the members of the Board of Directors.
(j) Financings. Promptly, fully and in detail, inform the
Board of Directors of any substantive discussions, offers or contracts relating
to possible financings of any nature for the Company, whether initiated by the
Company or any other Person, except for (A) arrangements with trade creditors,
and (B) utilization by the Company or any Subsidiary of commercial lending
arrangements with financial institutions.
(k) By-laws. The Company shall at all times cause its By-laws
to provide that, unless otherwise required by the laws of the State of Delaware,
(i) any two directors or (ii) any holder or holders of at least 25% of the
outstanding Preferred Shares, shall have the right to call a meeting of the
Board of Directors or stockholders. The Company shall at all times maintain
provisions in its By-laws or Certificate of Incorporation indemnifying all
directors against liability to the maximum extent permitted under the laws of
the State of Delaware.
(l) Noncompetition and Nonsolicitation Agreements; Invention
and Nondisclosure Agreements. The Company shall obtain a Noncompetition and
Nonsolicitation
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Agreement, and Invention and Nondisclosure Agreement in the form attached hereto
as Exhibits 2.03HA and 2.03HB, respectively, from each Key Employee of the
Company.
(m) The Board of Directors. Call, and to the extent a quorum
can be maintained, hold meetings of the Company's Board of Directors as
determined by a majority of the Board of Directors (which majority shall include
at least one representative of the Purchasers), but in any event not less than
on a quarterly basis. Promptly pay all direct out-of-pocket expenses reasonably
incurred by each non-management director of the Company in attending each
meeting of the Board of Directors or any committee thereof.
(n) Chief Executive Office. Subject to Section 4.02(j) herein,
the Company shall continue the executive search currently in effect for a Chief
Executive Officer.
4.02. Negative Covenants of the Company. Without limiting any other
covenants and provisions hereof, the Company covenants and agrees that, for so
long as at least 50% of the shares of Series A Preferred Stock which were issued
pursuant to this Agreement remain outstanding, it will comply with and observe
the following covenants and provisions, and will cause each Subsidiary, if and
when such Subsidiary exists, to comply with and observe such of the following
covenants and provisions as are applicable to such Subsidiary, and will not,
without the consent of at least 60% in interest of the holders of the Preferred
Shares:
(a) Restrictions on Indebtedness. Create, incur, assume or
suffer to exist, or permit any Subsidiary to create, incur, assume or suffer to
exist, any liability with respect to any Indebtedness for money borrowed except
the following:
(i) Indebtedness of the Company, not to exceed, in
the aggregate, $6,000,000; and
(ii) Indebtedness of the Company in respect of
Capital Expenditures subject to Section 4.02(i) herein.
(b) Merger or Sale. Except as contemplated by this Agreement
and subject to the terms of the Series A Convertible Preferred Stock, merge with
or into any other entity (except a Subsidiary or merger in which the Company is
the surviving Company and the holders of Company voting stock outstanding
immediately prior to the transaction constitute a majority of the holders of
voting stock outstanding immediately following the transaction or a
consolidation or merger pursuant to which the aggregate consideration
definitively and unconditionally payable to all of the stockholders of the
Corporation is greater than $50 million), sell to any person or entity any
assets constituting all or substantially all of the assets of the Company, or
agree to do or permit any Subsidiary to do any of the foregoing (unless the
aggregate consideration definitively and unconditionally payable to all of the
stockholders as a result of any such transaction is greater than $50 million).
(c) Assumptions or Guaranties of Indebtedness of Other
Persons. Assume, guarantee, endorse or otherwise become directly or contingently
liable on, or permit any
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Subsidiary to assume, guarantee, endorse or otherwise become directly or
contingently liable on (including, without limitation, liability by way of
agreement, contingent or otherwise, to purchase, to provide funds for payment,
to supply funds to or otherwise invest in the debtor or otherwise to assure the
creditor against loss) any Indebtedness of any other Person, except for
guaranties by endorsement of negotiable instruments for deposit or collection in
the ordinary course of business, and except for the guaranties of the permitted
obligations of any wholly-owned Subsidiary.
(d) Distributions. Declare or pay any dividends, purchase,
redeem, retire, or otherwise acquire for value any of its capital stock (or
rights, options or wan-ants to purchase such shares) now or hereafter
outstanding, return any capital to its stockholders as such, or make any
distribution of assets to its stockholders as such, or permit any Subsidiary to
do any of the foregoing (such transactions being hereinafter referred to as
"Distributions"), except that any such Subsidiary may declare and make payment
of cash and stock dividends, return capital and make distributions of assets to
the Company, and except as specifically provided for in the Company's
Certificate of Incorporation or the Certificate of Designation, provided,
however, that nothing herein contained shall prevent the Company from:
(i) effecting a stock split (except for a reverse
stock split) or declaring or paying any dividend consisting of shares of any
class of capital stock to the holders of shares of such class of capital stock,
or
(ii) redeeming any stock of a deceased stockholder
out of insurance held by the Company on that stockholder's life, or
(iii) repurchasing the shares of Common Stock at the
original cost thereof (in accordance with the Stock Restriction and Right of
First Refusal Agreements in the form of Exhibits 2.03HA and 2.03HB,
respectively, attached hereto or similar agreement) held by officers, employees,
directors or consultants of the Company which are subject to restrictive stock
purchase agreements under which the Company has the option to repurchase such
shares upon the occurrence of certain events, including the termination of
employment,
if in the case of any such transaction the payment can be made in compliance
with the other terms of this Agreement.
(e) Change in Nature of Business. Make or permit any
Subsidiary to make, any material change in the nature of its business as
contemplated in written materials delivered to the Purchasers prior to the date
hereof.
(f) Ownership of Subsidiaries. Purchase or hold beneficially
any stock, other securities or evidences of Indebtedness in, or make any
investment in any other Person, excluding a wholly-owned subsidiary of the
Company.
(g) Issuance of Reserved Employee Shares. Grant to any of its
employees awards, options or other rights to purchase Reserved Employee Shares
unless
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authorized by vote of the Company's Board of Directors which shall include at
least two members who arc elected solely by the Purchasers.
(h) Dealings with Affiliates and Others. Other than as
contemplated by this Agreement, and other than transactions in the ordinary
course of business involving less than $50,000, enter into any transaction,
including, without limitation, any loans or extensions of credit or royalty
agreements, with any officer or director of the Company or any Subsidiary or
holder of any class of capital stock of the Company, or any member of their
respective immediate families or any corporation or other entity directly or
indirectly affiliated with one or more of such officers, directors or
stockholders or members of their immediate families unless such transaction is
approved in advance by a majority of disinterested members of the Board of
Directors, or absent such Board of Directors approval, by a majority in interest
of the Purchasers.
(i) Capital Expenditures. Incur any Capital Expenditures in
any fiscal year in excess of the agreed upon budget therefor.
(j) Chief Executive Officer. Elect a Chief Executive Officer
unless such person has received the prior approval of those members of the Board
of Directors specified in Sections 4(i) and (ii) of the Stockholders' Agreement.
4.03. Reporting Requirements. For as long as any of the Preferred
Shares remain outstanding, the Company will furnish the following to each
Purchaser who holds at least 65,789 shares (as equitably adjusted for stock
splits, stock dividends and the like) of the Series A Preferred Stock which were
issued pursuant to this Agreement (provided, that any notice required to be
delivered pursuant to Section 4.03(e) shall be deemed delivered by providing
such notice to the directors elected by the holders of the Series A Preferred
Stock):
(a) Monthly Reports: as soon as available and in any event
within 30 days after the end of each calendar month, unaudited consolidated and
consolidating balance sheets of the Company and its Subsidiaries as of the end
of such month and consolidated and consolidating statements of income and
retained earnings of the Company and its Subsidiaries for such month and for the
period commencing at the end of the previous fiscal year and ending with the end
of such month, setting forth in each case in comparative form the corresponding
figures for the corresponding period of the preceding fiscal year, and including
comparisons to monthly budgets, a cash flow analysis for such month, a schedule
showing each expenditure of a capital nature during such month, and a summary
discussion of the Company's principal functional areas, all in reasonable detail
and duly certified (subject to year-end audit adjustments) by the chief
financial officer of the Company as having been prepared in accordance with
generally accepted accounting principles consistently applied;
(b) Quarterly Reports: to the extent not otherwise provided to
any Person, as soon as available and in any event within 45 days after the end
of each of the first three quarters of each fiscal year of the Company,
unaudited consolidated balance sheets of the Company and its Subsidiaries as of
the end of such quarter and consolidated statements of income and cash flows of
the Company and its Subsidiaries for such quarter and for the period
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commencing at the end of the previous fiscal year and ending with the end of
such quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding period of the preceding fiscal year, and including
comparisons to quarterly budgets and a summary discussion of the Company's
principal functional areas, all in reasonable detail and duly certified (subject
to year-end audit adjustments) by the chief financial officer of the Company as
having been prepared in accordance with generally accepted accounting principles
consistently applied;
(c) Annual Reports: as soon as available and in any event
within 120 days after the end of each fiscal year of the Company (other than the
fiscal year ended December 31, 1998), a copy of the annual audit report for such
year for the Company and its Subsidiaries, including therein consolidated
balance sheets of the Company and its Subsidiaries as of the end of such fiscal
year and consolidated statements of income of the Company and its Subsidiaries
for such fiscal year, setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year, all such consolidated
statements to be duly certified by the chief financial officer of the Company
and by such independent public accountants of recognized national standing
approved by a majority of the Board of Directors;
(d) Budgets: as soon as available after approval by the Board
of Directors, a business plan and monthly operating budgets for the forthcoming
fiscal year;
(e) Notice of Adverse Changes: promptly after the occurrence
thereof and in any event within 10 days after each occurrence, notice of any
material adverse change in the operations or financial condition of the Company
or any material default in any other material agreement to which the Company is
a party;
(f) Written Reports: promptly upon receipt or publication
thereof, any written reports submitted to the Company by independent public
accountants in connection with an annual or interim audit of the books of the
Company and its Subsidiaries made by such accountants or by consultants or other
experts in connection with such consultant's or other expert's review of the
Company's operations or industry, and written reports prepared by the Company to
comply with other investment or loan agreements;
(g) Notice of Proceedings: promptly after the commencement
thereof, notice of all material actions, suits and proceedings of the type
described in Section 3.04 before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting the Company or any Subsidiary; and
(h) Stockholders' and Commission Reports: promptly upon
sending, making available, or filing the same, such reports and financial
statements as the Company or any Subsidiary shall send or make available to the
stockholders of the Company or file with the Commission.
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ARTICLE V
RIGHT OF FIRST REFUSAL
5.01. Right of First Refusal. The Company shall not issue, sell or
exchange, agree or obligate itself to issue, sell or exchange, or reserve or set
aside for issuance, sale or exchange, any (i) shares of Common Stock, (ii) any
other equity security of the Company, including without limitation, shares of
Series A Preferred Stock, (iii) any debt security of the Company (other than
debt with no equity feature) including without limitation, any debt security
which by its terms is convertible into or exchangeable for any equity security
of the Company, (iv) any security of the Company that is a combination of debt
and equity, or (v) any option, warrant or other right to subscribe for, purchase
or otherwise acquire any such equity security or any such debt security of the
Company, unless in each case the Company shall have first offered to sell such
securities (the "Offered Securities") to the Purchasers as follows: The Company
shall offer to sell to each Purchaser (a) that portion of the Offered Securities
as the number of shares of Preferred Shares then held by such Purchaser bears to
the total number of Preferred Shares held by all Purchasers (the "Basic
Amount"), and (b) such additional portion of the Offered Securities as such
Purchaser shall indicate it will purchase should the other Purchasers subscribe
for less than their Basic Amounts (the "Undersubscription Amount"), at a price
and on such other terms as shall have been specified by the Company in writing
delivered to such Purchaser (the "Offer"), which Offer by its terms shall remain
open and irrevocable for a period of fifteen (15) days from receipt of the
Offer.
5.02. Notice of Acceptance. Notice of each Purchaser's intention to
accept, in whole or in part, any Offer made pursuant to Section 5.01 shall be
evidenced by a writing signed by such Purchaser and delivered to the Company
prior to the end of the 15-day period of such offer, setting forth such of the
Purchaser's Basic Amount as such Purchaser elects to purchase and, if such
Purchaser shall elect to purchase all of its Basic Amount, such
Undersubscription Amount as such Purchaser shall elect to purchase (the "Notice
of Acceptance"). If the Basic Amounts subscribed for by all Purchasers are less
than the total Offered Securities, then each Purchaser who has set forth
Undersubscription Amounts in its Notice of Acceptance shall be entitled to
purchase, in addition to the Basic Amounts subscribed for, all Undersubscription
Amounts it has subscribed for; provided, however, that should the
Undersubscription Amounts subscribed for exceed the difference between the
Offered Securities and the Basic Amounts subscribed for (the "Available
Undersubscription Amount"), each Purchaser who has subscribed for any
Undersubscription Amount shall be entitled to purchase only that portion of the
Available Undersubscription Amount as the Undersubscription Amount subscribed
for by such Purchaser bears to the total Undersubscription Amounts subscribed
for by all Purchasers subject to rounding by the Board of Directors to the
extent it reasonably deems necessary.
5.03. Conditions to Acceptances and Purchase.
(a) Permitted Sales of Refused Securities. In the event that
Notices of Acceptance are not given by the Purchasers in respect of all the
Offered Securities, the Company shall have ninety (90) days from the expiration
of the period set forth in Section 5.01 to close the
24
-20-
sale of all or any part of such Offered Securities as to which a Notice of
Acceptance has not been given by the Purchasers (the "Refused Securities") to
the Person or Persons specified in the Offer, but only for cash and otherwise in
all respects upon terms and conditions, including, without limitation, unit
price and interest rates, which are no more favorable, in the aggregate, to such
other Person or Persons or less favorable to the Company than those set forth in
the Offer.
(b) Reduction in Amount of Offered Securities. In the event
the Company shall propose to sell less than all the Refused Securities (any such
sale to be in the manner and on the terms specified in Section 5.03(a) above),
then each Purchaser shall reduce the number of, or other units of the Offered
Securities specified in its respective Notices of Acceptance to an amount which
shall be not less than the amount of the Offered Securities which the Purchaser
elected to purchase pursuant to Section 5.02 multiplied by a fraction, (i) the
numerator of which shall be the amount of Offered Securities which the Company
actually proposes to sell, and (ii) the denominator of which shall be the amount
of all Offered Securities. In the event that any Purchaser so elects to reduce
the number or amount of Offered Securities specified in its respective Notices
of Acceptance, the Company may not sell or otherwise dispose of more than the
reduced amount of the Offered Securities until such securities have again been
offered to the Purchasers in accordance with Section 5.01.
(c) Closing. Upon the closing, which shall include full
payment to the Company, of the sale to such other Person or Persons of all or
less than all the Refused Securities, the Purchasers shall purchase from the
Company, and the Company shall sell to the Purchasers, the number of Offered
Securities specified in the Notices of Acceptance, as reduced pursuant to
Section 5.03(b) if the Purchasers have so elected, upon the terms and conditions
specified in the Offer. The purchase by the Purchasers of any Offered Securities
is subject in all cases to the preparation, execution and delivery by the
Company and the Purchasers of a purchase agreement relating to such Offered
Securities reasonably satisfactory in form and substance to the Purchasers and
their respective counsel.
5.04. Further Sale. In each case, any Offered Securities not purchased
by the Purchasers or other Person or Persons in accordance with Section 5.03 may
not be sold or otherwise disposed of until they are again offered to the
Purchasers under the procedures specified in Sections 5.01, 5.02 and 5.03.
5.05. Termination of Right of First Refusal. The rights of the
Purchasers under this Article V shall terminate immediately prior to the
consummation of a Qualified Public Offering or when the Purchasers own less than
50% of the shares of Series A Preferred Stock purchased pursuant to this
Agreement, whichever is earlier, provided that the right of the Purchasers under
this Article V may be waived by the affirmative vote or consent of holders of at
least a majority of the then outstanding Preferred Shares.
5.06. Exception. The rights of the Purchasers under this Article V
shall not apply to:
(a) any Additional Shares issued at any Subsequent Closing;
25
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(b) Common Stock or rights to purchase Common Stock issued or
issuable to MIT pursuant to the License Agreement;
(c) Common Stock or rights to purchase Common Stock issued or
issuable to any strategic partner of the Company, which strategic partner and
the issuance of Common Stock thereto shall be approved by both of the directors
elected solely by the holders of the Series A Preferred Stock as set forth in
the Stockholders' Agreement;
(d) Common Stock or rights to purchase Common Stock issued as
a stock dividend to holders of Common Stock or upon any subdivision or
combination of shares of Common Stock;
(e) Series A Preferred Stock issued as a dividend to holders
of Series A Preferred Stock upon any subdivision or combination of shares of
Series A Preferred Stock;
(f) the Converted Shares;
(g) any Reserved Employee Shares;
(h) Any securities issued in connection with the acquisition
by the Company of another entity by merger, purchase of all or substantially all
of the assets of, or purchase of all or substantially all of the capital stock
of such entity; or
(i) any warrants to purchase Common Stock issued in connection
with a commercial bank loan or lease with a financial institution if approved by
a majority of the Board of Directors, which majority includes the approval of
two representatives of the Purchasers.
ARTICLE VI
DEFINITIONS AND ACCOUNTING TERMS
6.01. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Agreement" means this Series A Preferred Stock Purchase Agreement as
from time to time amended and in effect between the parties, including all
Exhibits hereto.
"Board of Directors" means the board of directors of the Company as
constituted from time to time.
"Business Plan" means the Business Plan of the Company dated as of
August 28, 1998.
"Closing" shall have the meaning attributable to it in Section 1.04 of
this Agreement.
26
-22-
"Capital Expenditures" for any period shall mean all amounts debited or
required to be debited to the fixed asset accounts on the balance sheet of the
Company during such period in accordance with generally accepted accounting
principles in respect of (a) the acquisition, construction, improvement,
replacement or betterment of land, buildings, machinery, equipment or of any
other fixed assets or leaseholds, and (b) to the extent related to and not
included in (a) above, materials, contract labor and direct labor (excluding
expenditures properly chargeable to repairs or maintenance in accordance with
generally accepted accounting principles).
"Commission" means the Securities and Exchange Commission (or any other
federal agency administering the securities laws).
"Common Stock" includes (a) the Company's Common Stock, par value $.01
per share, as authorized on the date of this Agreement, (b) any other capital
stock of any class or classes (however designated) of the Company, authorized on
or after the date hereof, the holders of which shall have the right, without
limitation as to amount, either to all or to a share of the balance of current
dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and the holders of which
shall ordinarily, in the absence of contingencies or in the absence of any
provision to the contrary in the Company's Certificate of Incorporation, be
entitled to vote for the election of a majority of directors of the Company
(even though the right so to vote has been suspended by the happening of such a
contingency or provision), and (c) any other securities into which or for which
any of the securities described in (a) or (b) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise.
"Company" means and shall include Akamai Technologies, Inc., a Delaware
corporation, and its successors and assigns.
"Consolidated" and "consolidating" when used with reference to any term
defined herein mean that term as applied to the accounts of the Company and its
Subsidiaries consolidated in accordance with generally accepted accounting
principles.
"Converted Shares" shall have that meaning attributable to it in
Section 1.02 of this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Founders" shall mean ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇.
"Indebtedness" means all obligations, contingent and otherwise, which
should, in accordance with generally accepted accounting principles, be
classified upon the obligor's balance sheet (or the notes thereto) as
liabilities, but in any event including liabilities secured by any mortgage on
property owned or acquired subject to such mortgage, whether or not the
liability secured thereby shall have been assumed, and also including (i) all
guaranties,
27
-23-
endorsements and other contingent obligations, in respect of Indebtedness of
others, whether or not the same are or should be so reflected in said balance
sheet (or the notes thereto), except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business and (ii) the present value of any lease payments due under
leases required to be capitalized in accordance with applicable Statements of
Financial Accounting Standards, determined by discounting all such payments at
the interest rate determined in accordance with applicable Statements of
Financial Accounting Standards.
"Key Employee" means and includes any Founder, the President, chief
executive officer, chief financial officer, chief operating officer, vice
president of operations, research, development, sales or marketing, or any other
individual who performs a significant role in the operations of the Company or a
Subsidiary as may be reasonably designated by the Board of Directors of the
Company.
"Person" means an individual, corporation, partnership, joint venture,
trust, or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Preferred Shares" shall have the meaning attributable to it in Section
1.01 of this Agreement.
"Purchaser"and "Purchasers" shall have that meaning attributable to
those words in Section 1.01 of this Agreement and shall include the Purchasers
and also any other holder of any of the Shares.
"Qualified Public Offering" means a fully underwritten, firm commitment
public offering pursuant to an effective registration under the Securities Act
covering the offer and sale by the Company of its Common Stock in which the
aggregate net proceeds to the Company equal or exceed $20,000,000, in which the
price per share of such Common Stock equals or exceeds $22.80 (such price
subject to equitable adjustment in the event of any stock split, stock dividend,
combination, reorganization, reclassification or other similar event).
"Reserved Employee Shares" means shares of Common Stock, not to exceed
in the aggregate 650,000 shares (appropriately adjusted to reflect stock splits,
stock dividends, combinations of shares and the like with respect to the Common
Stock and subject to the provisions of the Section 4.02(g) hereof), reserved by
the Company for issuance pursuant to the Company's 1998 Stock Incentive Plan,
provided that, such number may be increased by up to 839,914 additional shares
of Common Stock (the "Founders' Shares") (appropriately adjusted to reflect
stock splits, stock dividends, combinations of shares and the like with respect
to the Common Stock and subject to the provisions of the Section 4.02(g) hereof
and including 236,900 shares previously issued or subject to options prior to
the date hereof) held by the Founders upon the repurchase of such Founders
Shares by the Company from the Founders pursuant to contractual rights held by
the Company. The foregoing numbers of Reserved Employee Shares may be increased
by the affirmative vote or written consent of the directors elected solely by
the holders of Series A Convertible Preferred Stock or the affirmative vote or
written consent of the holders of at least 60% of the then outstanding shares of
Series A Convertible Preferred Stock.
28
-24-
"Securities Act" means the Securities Act of 1933, 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.
"Series A Preferred Stock" means the Series A Convertible Preferred
Stock of the Company, par value $.01 per share, having the rights, powers,
privileges and preferences set forth in Exhibit 1.01A hereto.
"Shares" shall have that meaning attributable to it in Section 1.03 of
this Agreement.
"Subsidiary" or "Subsidiaries" means any corporation, partnership,
trust or other entity of which the Company and/or any of its other Subsidiaries
(as herein defined) directly or indirectly owns at the time a majority of the
outstanding shares of every class of equity securities of such corporation,
partnership, trust or other entity.
6.02. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistently applied, and all financial data submitted pursuant to
this Agreement shall be prepared in accordance with such principles.
6.03. Knowledge. All references to the knowledge or awareness of the
Company shall mean the actual knowledge of any of ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Sileeg, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇.
ARTICLE VII
MISCELLANEOUS
7.01. No Waiver; Cumulative Remedies. No failure or delay on the part
of any party to this Agreement in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
7.02. Amendments, Waivers and Consents. Any provision in this Agreement
to the contrary notwithstanding, and except as hereinafter provided changes in
or additions to this Agreement may be made, and compliance with any covenant or
provision set forth herein may be omitted or waived, if the Company (i) shall
obtain consent thereto in writing from the holder or holders of at least 60% of
the then outstanding shares of Series A Convertible Preferred Stock, and (ii)
shall deliver copies of such consent in writing to any holders who did not
execute such consent. Any waiver or consent may be given subject to satisfaction
of conditions stated therein and any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given. The
Company shall not offer, or agree to pay, any fee or other consideration to any
Purchaser in connection with any amendment, modification or waiver of any
29
-25-
provision of this Agreement, the Certificate of Designations for the Series A
Preferred Stock, the Stockholders Agreement or the Registration Rights Agreement
unless such amendment, modification or waiver relates solely to the rights and
remedies of such Purchaser and does not adversely affect any rights or remedies
of any other holder of the Series A Preferred Stock or such fee or other
consideration is offered and paid to all Purchasers pro-rata to their holdings
of Preferred Stock. In addition, the Company shall not directly or indirectly
repurchase or retire any Series A Preferred Stock (other through the conversion
thereof in accordance with the terms of the Certificate of Designations) except
on terms and conditions offered to all Purchasers pro-rata to their holdings of
the Series A Preferred Stock.
7.03. Addresses for Notices. All notices, requests, demands and other
communications provided for hereunder shall be in writing and mailed, faxed or
delivered to each applicable party at the address set forth in Exhibit 1.01
hereto or at such other address as to which such party may inform the other
parties in writing in compliance with the terms of this Section.
If to any other holder of the Shares: at such holder's address for
notice as set forth in the register maintained by the Company, or, as to each of
the foregoing, at the addresses set forth on Exhibit 1.01 hereto or at such
other address as shall be designated by such Person in a Written notice to the
other parties complying as to delivery with the terms of this Section 7.03.
If to the Company: at the address set forth on page 1 hereof, or at
such other address as shall be designated by the Company in a written notice to
the other parties complying as to delivery with the terms of this Section, with
a copy to: ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇
▇. ▇▇▇▇▇, Esq.
All such notices, requests, demands and other communications shall,
when mailed (which mailing must be accomplished by first class mail, postage
prepaid; express overnight courier service; or registered mail, return receipt
requested) or transmitted by facsimile, be effective three days after deposited
in the mails or upon transmission by facsimile, respectively, addressed as
aforesaid, unless otherwise provided herein.
7.04. Costs, Expenses and Taxes. The Company agrees to pay in
connection with the preparation, execution and delivery of this Agreement and
the issuance of the Preferred Shares, the reasonable fees and expenses of ▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, special counsel for the Purchasers, up to a maximum of
$20,000. In addition, the Company shall pay any and all stamp and other taxes
payable or determined to be payable in connection with the execution and
delivery of this Agreement, the issuance of the Preferred Shares and the other
instruments and documents to be delivered hereunder or thereunder, and agrees to
save the Purchasers harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes.
7.05. Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the Company and the Purchasers and their respective
heirs, successors and assigns, except that the Company shall not have the right
to delegate any of its respective obligations
30
-26-
hereunder or to assign its respective rights hereunder or any interest herein
without the prior written consent of the holders of at least a majority in
interest of the Shares.
7.06. Survival of Representations and Warranties. All representations
and warranties made in this Agreement, the Shares, or any other instrument or
document delivered in connection herewith or therewith, shall survive the
execution and delivery hereof or thereof.
7.07. Prior Agreements. This Agreement constitutes the entire agreement
between the parties and supersedes any prior understandings or agreements
concerning the purchase and sale of the Shares.
7.08. Severability. The provisions of this Agreement and the terms of
the Series A Preferred Stock are severable and, in the event that any court of
competent jurisdiction shall determine that any one or more of the provisions or
part of a provision contained in this Agreement or the Series A Preferred Stock
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Agreement or the terms of the
Series A Preferred Stock; but this Agreement and the terms of the Series A
Preferred Stock shall be reformed and construed as if such invalid or illegal or
unenforceable provision, or part of a provision, had never been contained
herein, and such provisions or part reformed so that it would be valid, legal
and enforceable to the maximum extent possible.
7.09. Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the General Corporation Law of the State of
Delaware as to matters within the scope thereof, and as to all other matters
shall be governed by and construed in accordance with the internal laws of the
Commonwealth of Massachusetts.
7.10. Headings. Article, Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
7.11. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
7.12. Further Assurances. From and after the date of this Agreement,
upon the request of any Purchaser or the Company, the Company and the Purchasers
shall execute and deliver such instruments, documents and other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement and the Shares.
7.13. Indemnification.
(a) The Company shall, with respect to the representations,
warranties and agreement made by it herein, indemnify, defend and hold the
Purchasers harmless against all
31
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liability, loss or damage, together with all reasonable costs and expenses
related thereto (including legal and accounting fees and expenses (collectively,
"Losses" and individually, a "Loss")), arising from the untruth, inaccuracy or
breach of any such representations, warranties or agreements of the Company.
Without limiting the generality of the foregoing, the Purchasers shall be deemed
to have suffered Loss as a result of the untruth, inaccuracy or breach of any
such representations or warranties if such liability, loss or damage shall be
suffered by the Company as a result of, or in connection with, such untruth,
inaccuracy or breach of any facts or circumstances constituting such untruth,
inaccuracy or breach. To claim a Loss, one or more Purchasers shall deliver to
the Company a notice (the "Loss Notice") specifying in reasonable detail the
nature and estimated amount of the Loss. At the time of delivery of the Loss
Notice to the Company, a duplicate copy of the Loss Notice shall be delivered to
the other Purchasers. A determination as to the existence and amount of the Loss
claimed in the Loss Notice shall be made in accordance with Section 7.13(c)
below. At the election of the Purchasers (made within 10 days after
determination of the existence and amount of a Loss in accordance with Section
7.13(c)), the Loss shall be payable to the Purchasers in (i) cash, (ii) by means
of an adjustment in the Series A Conversion Price (as defined in Section 5A of
the Designation of the Series A Preferred Stock) as provided in Section 5H of
the Designation of the Series A Preferred Stock or (iii) by a combination of (i)
and (ii) above. Any dispute regarding a Loss shall be determined as set forth in
Section 7.13(c) herein.
(b) The representations and warranties of the Company set
forth in this Agreement shall survive the Closing until November 23, 2000 and be
of no further force or effect as of such date, except that (i) the
representations and warranties set forth in Section 3.07 shall survive until the
delivery to the Purchasers of the report described in Section 4.03(c) of this
Agreement covering the Company's fiscal year ended December 31, 1999, (ii) the
representations and warranties set forth in Sections 3.13 and 3.18 shall survive
the Closing until November 23, 1999, and (iii) the representations and
warranties set forth in Section 3.15 shall survive the Closing forever and shall
not terminate.
(c) Within 10 days after delivery of the Loss Notice, the
Purchasers shall designate a representative (the "Purchaser Representative").
The Company and the Purchaser Representative shall thereafter attempt in good
faith for 30 days to agree upon the amount of the Loss claimed in the Loss
Notice (the "Loss Amount") and the then fair market value of one share of Series
A Preferred Stock after giving effect to the Loss (the "Current Series A
Value"). If no such agreement can be reached, the Company and the Purchaser
Representative shall each promptly select an arbitrator and thereafter the two
arbitrators shall select a third arbitrator. The three arbitrators shall
thereafter determine, by majority vote and pursuant to the then rules of the
American Arbitration Association, the Loss Amount and the Current Series A
Value. Each of the arbitrators shall be a member in good standing of the
American Arbitration Association. The Company and the Purchaser Representative
shall each be permitted to submit written positions and arguments to the
arbitrators concerning the matters at issue before the arbitrators. The fees and
expenses of the arbitrators shall be borne (i) 100% by the Company, if the Loss
amount as determined by the arbitrators is greater than or equal to 50% of the
estimated amount of the Loss as set forth in the Loss Notice, or (ii) 100% by
the Purchaser or Purchasers submitting the Loss
32
-28-
Notice, if the Loss Amount as determined by the arbitrators is less than 50% of
the estimated amount of the Loss as set forth in the Loss Notice.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
33
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
************
THE COMPANY: PURCHASERS:
AKAMAI TECHNOLOGIES, INC. BATTERY VENTURES IV, L.P.
By: Battery Partners, IV, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------- ---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇ Member Manager
Title: President
BATTERY INVESTMENT PARTNERS IV,
LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Member Manager
▇▇▇▇▇ PARTNERS, L.P.
By: ▇▇▇▇▇ PARTNERS, LLC
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ - Managing Member
/s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Revocable Trust Dated
December 19, 1980
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Title Trustee
---------------------------------------
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
34
-30-
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
35
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Authorized Signature:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
--------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
65,789 Shares
-------
Aggregate Purchase Price ($7.60 per
Share):
$499,996.40
---------------
Agreed to and accepted this
30th day of November, 1998
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
36
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
Ehrenkranz & Ehrenkranz LLP
--------------------------------------------
Authorized Signature:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
--------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
32,894 Shares
--------
Aggregate Purchase Price ($7.60 per
Share):
$249,994.40
-------------
Agreed to and accepted this
30th day of November, 1998.
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
37
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
▇▇▇▇▇ ▇▇▇▇▇▇ Lifetime Trust
--------------------------------------------
Authorized Signature:
/s/ [Illegible]
--------------------------------------------
Address:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
--------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
--------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
32,894 Shares
--------
Aggregate Purchase Price ($7.60 per
Share):
$249,994.40
-----------
Agreed to and accepted this
30th day of November, 1998.
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
38
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Authorized Signature:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Address:
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------
--------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
19,736 Shares
-------
Aggregate Purchase Price ($7.60 per
Share):
$149,993.60
------------
Agreed to and accepted this
30th day of November, 1998.
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
39
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ as
trustees of the R&L ▇▇▇▇▇▇ Trust under the
amended and restated trust agreement dated
12/15/95
---------------------------------------------
Authorized Signature:
/s/ [Illegible]
---------------------------------------------
Address:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇., 2nd Floor
---------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------
---------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
16,447 Shares
-------
Aggregate Purchase Price ($7.60 per
Share):
$124,997.20
------------
Agreed to and accepted this
30th day of November, 1998.
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
40
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
Straight Arrow Publishers Company, L.P.
---------------------------------------------
Authorized Signature:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, VP and CFO
Address:
c/o Rolling Stone
---------------------------------------------
1290 Avenue of the Americas
---------------------------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
16,447 Shares
--------
Aggregate Purchase Price ($7.60 per
Share):
$124,997.20
--------------
Agreed to and accepted this
30th day of November, 1998.
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
41
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Authorized Signature:
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------
---------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
1,316 Shares
------
Aggregate Purchase Price ($7.60 per
Share):
$10,001.60
-------------
Agreed to and accepted this
30th day of November, 1998.
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
42
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Authorized Signature:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Address:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇. #▇▇▇
---------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------
---------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
13,157 Shares
---------
Aggregate Purchase Price ($7.60 per
Share):
$99,993.20
-------------
Agreed to and accepted this
30th day of November, 1998.
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
43
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
---------------------------------------------
Authorized Signature:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
---------------------------------------------
Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------
---------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
3,289 Shares
---------
Aggregate Purchase Price ($7.60 per
Share):
$24,996.40
------------
Agreed to and accepted this
30th day of November, 1998.
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
44
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
---------------------------------------------
Authorized Signature:
/s/ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
---------------------------------------------
Address:
24650 North ▇▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------
---------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
3,289 Shares
---------
Aggregate Purchase Price ($7.60 per
Share):
$24,996.40
-----------
Agreed to and accepted this
30th day of November, 1998.
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
45
AKAMAI TECHNOLOGIES, INC.
Amendment No. 1 to Series A Convertible
Preferred Stock Purchase Agreement
This Amendment No. 1 to Series A Convertible Preferred Stock Purchase
Agreement (this "Amendment") is dated as of December 8, 1998 by and among Akamai
Technologies, Inc., a Delaware corporation (the "Company"), and the individuals
and entities whose signatures are set forth below (the "Purchasers").
WHEREAS, the Company and the Purchasers are parties to a Series A
Convertible Preferred Stock Purchase Agreement dated as of November 23, 1998
(the "Purchase Agreement");
WHEREAS, the Company and the Purchasers desire Polaris Venture Partners
II L.P. and Polaris Venture Partners Founders Fund II L.P. (together, the
"Polaris Funds") to join in and become parties to the Purchase Agreement as
Additional Purchasers pursuant to Section 1.04(b) thereof; and
WHEREAS, the amendment of the Purchase Agreement as provided herein is
a condition to the Polaris Funds' joining in and becoming parties to the
Purchase Agreement as Additional Purchasers;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
1. Effective immediately prior to the Polaris Funds' joining in and
becoming parties to the Purchase Agreement as Additional Purchasers, Section
5.01 of the Purchase Agreement shall be deleted in its entirety and the
following shall be inserted in lieu thereof:
"5.01 Right of First Refusal. The Company shall not issue,
sell or exchange, agree or obligate itself to issue, sell or exchange,
or reserve or set aside for issuance, sale or exchange, any (i) shares
of Common Stock, (ii) any other equity security of the Company,
including without limitation, shares of Series A Preferred Stock, (iii)
any debt security of the Company (other than debt with no equity
feature) including without limitation, any debt security which by its
terms is convertible into or exchangeable for any equity security of
the Company, (iv) any security of the Company that is a combination of
debt and equity, or (v) any option, warrant or other right to subscribe
for, purchase or otherwise acquire any such equity security or any such
debt security of the Company, unless in each such case the Company
shall have first offered to sell such securities (the "Offered
Securities") to the Purchasers as follows: The Company shall offer to
sell to each Purchaser (a) that portion of the Offered Securities as
the number of Preferred Shares then held by such Purchaser bears to the
total number of Preferred Shares held by all Purchasers (assuming for
these purposes that (i) the number of Preferred Shares then held by
Polaris Venture Partners II L.P. and Polaris Venture Partners Founders
Fund II L.P. equals twice the number of Preferred Shares actually held
by Polaris Venture Partners II L.P. and Polaris Venture Partners
Founders Fund II L.P., respectively, and (ii) the number of Preferred
Shares then held by all Purchasers equals the sum of (X) the number of
46
Preferred Shares then held by all Purchasers other than Polaris Venture
Partners II L.P. and Polaris Venture Partners Founders Fund II L.P.
plus (Y) twice the number of Preferred Shares actually held by Polaris
Venture Partners II L.P. and Polaris Venture Partners Founders Fund II
L.P.) (the "Basic Amount"), and (b) such additional portion of the
Offered Securities as such Purchaser shall indicate it will purchase
should the other Purchasers subscribe for less than their Basic Amounts
(the "Undersubscription Amount"), at a price and on such other terms as
shall have been specified by the Company in writing delivered to such
Purchaser (the "Offer"), which Offer by its terms shall remain open and
irrevocable for a period of fifteen (15) days from receipt of the
Offer."
2. Other than as set forth above, the Purchase Agreement is ratified
and confirmed in all respects.
EXECUTED as of the date first set forth above.
COMPANY:
AKAMAI TECHNOLOGIES, INC.
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
PURCHASERS:
BATTERY VENTURES IV, L.P.
By: Battery Partners IV, LLC
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Member Manager
BATTERY INVESTMENT PARTNERS
IV, LLC
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Member Manager
-2-
47
▇▇▇▇▇ PARTNERS, L.P.
By: ▇▇▇▇▇ Partners, LLC
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Managing Member
/s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ REVOCABLE
TRUST DATED DECEMBER 19, 1980
By:
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Trustee
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name:
Title:
-3-
48
▇▇▇▇▇ ▇▇▇▇▇▇ LIFETIME TRUST
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Trustee
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ AS TRUSTEES OF THE R&L
▇▇▇▇▇▇ TRUST UNDER THE
AMENDED AND RESTATED TRUST
AGREEMENT DATED 12/15/95
By:
-------------------------------------------
Name:
Title:
STRAIGHT ARROW PUBLISHERS
COMPANY, L.P.
By:
-------------------------------------------
Name:
Title:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III
/s/ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
-4-
49
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
Battery Ventures IV, L.P.
-------------------------------------------
Authorized Signature:
/s/ [Illegible]
-------------------------------------------
Address:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------
-------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
116,454 Shares
--------
Aggregate Purchase Price ($7.60 per
Share):
$885,050.40
-----------
Agreed to and accepted this
14th day of December, 1998.
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
50
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
Battery Investment Partners IV, LLC
-------------------------------------------
Authorized Signature:
/s/ [Illegible]
-------------------------------------------
Address:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------
-------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
1,974 Shares
--------
Aggregate Purchase Price ($7.60 per
Share):
$15,002.40
-----------
Agreed to and accepted this
14th day of December, 1998
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
51
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
Polaris Venture Partners II L.P.
-------------------------------------------
Authorized Signature:
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
Address:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------
-------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
257,119 Shares
----------
Aggregate Purchase Price ($7.60 per
Share):
$1,954,104.40
--------------
Agreed to and accepted this
14th day of December, 1998
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
52
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
Polaris Venture Partners
Founders Fund II L.P.
-------------------------------------------
Authorized Signature:
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
Address:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------
-------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
6,044 Shares
--------
Aggregate Purchase Price ($7.60 per
Share):
$45,934.40
--------------
Agreed to and accepted this
14th day of December, 1998
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
53
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
Authorized Signature:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
Address:
c/o Polaris Venture Partners
-------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
29,605 Shares
---------
Aggregate Purchase Price ($7.60 per
Share):
$224,998.00
-------------
Agreed to and accepted this
14th day of December, 1998
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
54
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Authorized Signature:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ #▇▇▇
-------------------------------------------
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------
-------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
6,578 Shares
---------
Aggregate Purchase Price ($7.60 per
Share):
$49,992.80
---------------
Agreed to and accepted this
14th day of December, 1998
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
55
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
Authorized Signature:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
Address:
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------
-------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
6,578 Shares
---------
Aggregate Purchase Price ($7.60 per
Share):
$49,992.80
--------------
Agreed to and accepted this
14th day of December, 1998
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
56
ADDITIONAL PURCHASER SIGNATURE PAGE
By his, her or its execution and delivery of this signature page, the
undersigned hereby (i) joins in and agrees to be an "Additional Purchaser" under
that certain Series A Convertible Preferred Stock Purchase Agreement dated as of
November 23, 1998 among Akamai Technologies, Inc. (the "Company") and the
individuals and entities named therein (the "Purchase Agreement"), (ii) joins in
and agrees to be a "Purchaser" under that certain Registration Rights Agreement
dated as of November 23, 1998 among the Company and the individuals and entities
named therein (the "Registration Rights Agreement"), (iii) joins in and agrees
to be an "Investor" under that certain Stockholders' Agreement dated as of
November 23, 1998 among the Company and the individuals and entities named
therein (the "Stockholders' Agreement") and (iv) authorizes this signature page
to be attached to the Purchase Agreement, the Registration Rights Agreement and
the Stockholders' Agreement.
Name of Purchaser:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Authorized Signature:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Address:
c/o Polaris Venture Partners
-------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------------------------------
Number of Shares of Series A Convertible
Preferred Stock Being Purchased:
3,289 Shares
---------
Aggregate Purchase Price ($7.60 per
Share):
$24,996.40
-------------
Agreed to and accepted this
14th day of December, 1998
AKAMAI TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
