EXECUTION COPY
PeoplePC Inc.
REGISTRATION RIGHTS AGREEMENT
DECEMBER 17, 2001
TABLE OF CONTENTS
Page
SECTION 1 GENERAL..........................................................1
1.1 Definitions....................................................1
SECTION 2 REGISTRATION.....................................................3
2.1 Shelf Registration.............................................3
2.2 Expenses of Registration.......................................6
2.3 Obligations of the Company.....................................6
2.4 Furnishing Information.........................................7
2.5 Indemnification................................................7
2.6 Assignment of Registration Rights..............................9
2.7 Amendment of Registration Rights..............................10
2.8 Rule 144 Reporting............................................10
2.9 Termination...................................................11
SECTION 3 MISCELLANEOUS...................................................11
3.1 Governing Law.................................................11
3.2 Successors and Assigns........................................11
3.3 Entire Agreement..............................................11
3.4 Severability..................................................11
3.5 Amendment and Waiver..........................................11
3.6 Delays or Omissions...........................................12
3.7 Notices.......................................................12
3.8 Titles and Subtitles..........................................13
3.9 Counterparts..................................................13
3.10 Expenses......................................................13
3.11 Specific Enforcement..........................................13
3.12 Attorneys'Fees................................................13
3.13 Survival......................................................13
PEOPLEPC INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is entered into
as of the 17th day of December 2001 by and among PEOPLEPC INC., a Delaware
corporation (the "Company"), and the holders of the Company's Series B
Preferred Stock, par value $0.0001 per share ("Series B Stock"), set forth on
Exhibit A hereto (the "Investors").
Recitals
WHEREAS, the Company and the Investors have entered into the Series
B Preferred Stock Purchase Agreement, dated as of December 17, 2001 (the
"Stock Purchase Agreement") providing for, among other things, the sale by the
Company and the purchase by the Investors of an aggregate of 6,400,000 shares
of Series B Stock;
WHEREAS, as a condition of entering into the Stock Purchase
Agreement, the Investors have requested that the Company extend to them
registration rights for shares issued in accordance with the Stock Purchase
Agreement; and
WHEREAS, the Company's and Investors' obligations under the Stock
Purchase Agreement are conditioned upon the execution and delivery of this
Agreement by such parties.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and in the Stock Purchase Agreement, the parties hereto agree as
follows:
SECTION 1
GENERAL
1.1 Definitions. As used in this Agreement the following terms shall
have the following respective meanings:
"Affiliate" means, with respect to a specified person or entity, a
person or entity that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, the person or entity specified.
"Closing" means the consummation of the purchase of the shares of
Series B Stock contemplated by the Stock Purchase Agreement.
"Common Stock" means shares of Common Stock, par value $0.001 per
share, of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Holder" means any person owning of record Registrable Securities
that have not been sold to the public or any assignee of record of such
Registrable Securities.
"Prospectus" means the prospectus included in any Registration
Statement, all amendments and supplements to such prospectus, including
post-effective amendments, and all other material incorporated by reference in
such prospectus.
"Put Option" has the meaning set forth in the definition of Put
Option Stock.
"Put Option Stock" means the Common Stock issuable upon exercise of
the put option (the "Put Option")granted by the Company in the Put Option
Agreement, dated May 30, 2001, entered into by the Company, @viso Limited,
Bowerbrook Limited, SOFTBANK Capital Partners LP, SOFTBANK Capital LP and
SOFTBANK Capital Advisors Fund LP.
"Register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with
the Securities Act, and the declaration or ordering by the SEC of
effectiveness of such registration statement or document.
"Registrable Securities" means (a) shares of Common Stock issued or
issuable upon conversion of the Series B Stock or the Put Option Stock; and
(b) any securities issued as (or issuable upon the conversion or exercise of
any warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, such
Common Stock, the Series B Stock or the Put Option Stock. Notwithstanding the
foregoing, Registrable Securities shall not include any securities sold by a
person to the public pursuant to an effective Registration Statement or that
can be sold under Rule 144(k) pursuant to the Securities Act (or any successor
provision).
"Registrable Securities then outstanding" shall be the number of
shares determined by calculating the total number of shares of the Company's
Common Stock that are Registrable Securities and either (a) are then issued
and outstanding or (b) are issuable upon conversion of Series B Stock, upon
exercise of the Put Option or upon the exercise or conversion of then
exercisable or convertible securities.
"Registration Expenses" shall mean all expenses incurred by the
Company in complying with Section 2.1 hereof, including, without limitation,
all registration and filing fees, printing expenses, accounting fees, fees and
disbursements of counsel for the Company, reasonable fees and disbursements of
a single special counsel for the Holders, blue sky fees and expenses, and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company which
shall be paid in any event by the Company).
"Registration Statement" means any registration statement of the
Company filed with, or to be filed with, the SEC under the rules and
regulations promulgated under the Securities Act, including the related
Prospectus, amendments and supplements to such registration statement,
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including post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale and stock transfer taxes.
"Underwritten Offering" means a registration in which securities of
the Company are sold to an underwriter or underwriters on a firm commitment
basis for reoffering to the public.
SECTION 2
REGISTRATION
2.1 Shelf Registration.
(a) Filing. No later than 30 calendar days following the Closing,
the Company shall file with the SEC a Registration Statement pursuant to Rule
415 under the Securities Act (the "Shelf Registration Statement") covering the
offer and sale of the Registrable Securities by the Holders from time to time
in accordance with the methods of distribution elected by such Holders and set
forth in the Shelf Registration Statement and, thereafter, shall use its best
efforts to cause such Shelf Registration Statement to be declared effective
under the Securities Act no later than 90 calendar days following the Closing,
or sooner, if practicable
(b) Postponement of Registration. Notwithstanding Section 2.1(a),
the Company shall be entitled to postpone the declaration of effectiveness of
the Shelf Registration Statement for a reasonable period of time, but not in
excess of 60 days after the date the SEC has informed the Company that the
Shelf Registration Statement will not be reviewed or that the SEC has no
further comments with regard to the Shelf Registration Statement, if the board
of directors of the Company (the "Board"), acting in good faith and following
consultation with legal counsel, determines that there exists material
non-public information about the Company which the Board does not wish to
disclose in a Registration Statement (due to the fact that such disclosure
would result in a significant adverse impact on the Company or its
stockholders), which information would otherwise be required to be disclosed
in any Registration Statement filed with the SEC by the Company.
(c) Continued Effectiveness. Subject to Sections 2.1(b), (d) and
(f), the Company shall use its best efforts to keep such Shelf Registration
Statement continuously effective under the Securities Act in order to permit
the Prospectus forming a part thereof to be usable by Holders until such time
as there are no outstanding Registrable Securities (such period of
effectiveness, the "Shelf Period").
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(d) Selling Procedures. Any sale of Registrable Securities pursuant
to the Shelf Registration Statement filed in accordance with Section 2.1(a)
hereof shall be subject to the following conditions and procedures:
(i) The selling Holder shall provide written notice
("Stockholder Notice") to the Company no less than three full trading days
prior to such Holder's intended sale. Within the three trading-day period
following receipt of the Stockholder Notice, which notice shall include a
working facsimile number for purposes of delivery of the Company's response,
the Company shall either (A) inform such Holder in writing if the Registration
Statement and final prospectus then on file with the SEC is current and
otherwise complies with the Securities Act such that sales may be made
thereunder or (B) delay the resale by such Holder by delivering to such Holder
a written notification that the Suspension Right has been exercised and is
then in effect (the "Suspension Notice"). In the event that the selling Holder
receives notice from the Company that the Registration Statement is current
and complies with the Securities Act, such Holder shall then have 15 business
days after the date of the intended sale, as specified in the Stockholder
Notice, to sell the Registrable Securities proposed to be sold. After such 15
day period, the selling Holder shall once again comply with the procedures set
forth in this Section 2.1(d) prior to any further sales. In the event that a
selling Holder receives a Suspension Notice, such Holder shall refrain from
selling any Registrable Securities until his, her or its receipt of a
supplemented or amended prospectus pursuant to Subsections 2.1(d)(ii) and
2.1(d)(iii) below, or written notice from the Company that the suspension
period has ended and use of the prospectus previously furnished to such Holder
may be resumed. Notwithstanding the foregoing, it shall be understood that a
selling Holder who is an Affiliate of the Company as a result of the fact that
such Holder has appointed a member of the Board (as defined below) shall not
be required to deliver a Stockholder Notice and, rather, shall be permitted to
provide prior oral notice in person (including person to person telephone
communications) to the Company's Chief Executive Officer, Chief Financial
Officer or General Counsel (or the person performing the function and duties
normally associated with such positions) in advance of such Holder's sale, in
which case, the Company shall be entitled to deliver an oral Suspension Notice
to such Affiliate.
(ii) Subject to this Section 2.1(d), if the Shelf Registration
Statement or final prospectus then on file with the SEC is not current or
otherwise does not comply with the Securities Act, the Company shall use
commercially reasonable efforts to provide to the selling Holder a current
prospectus that complies with the Securities Act on or before the date of the
intended sale of the Registrable Securities as disclosed in the Stockholder
Notice; provided, however, that if (A) the board of directors of the Company
(the "Board"), acting in good faith and following consultation with legal
counsel, determines that there exists material nonpublic information about the
Company which the Board does not wish to disclose in the Shelf Registration
Statement (due to the fact that such disclosure would result in a significant
adverse impact on the Company or its stockholders) which information would
otherwise be required by the Securities Act to be disclosed in the
Registration Statement to be filed pursuant to Section 2.1(a), or (B) upon the
occurrence of any event described in clause (D) of Subsection 2.1(d)(iii)
hereof, no more than two times during any 12 month period, the Company shall
have the right to delay the preparation of a current prospectus that complies
with the Securities Act for up to 60 days on each occasion without explanation
to such Holder (each, a "Suspension Right"). The Company shall be entitled to
exercise its Suspension Right consecutively.
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(iii) Notwithstanding the foregoing, the Company shall notify
each Holder (A) of any request by the SEC or any other federal or state
governmental authority during the period of effectiveness of the Shelf
Registration Statement for amendments or supplements to the Shelf Registration
Statement or related prospectus or for additional information relating to the
Shelf Registration Statement, (B) of the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of any
proceedings for that purpose, (C) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, or (D) of the happening of any event which makes any statement made
in the Shelf Registration Statement or related prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or which requires the making of any changes in the Shelf
Registration Statement or prospectus so that, in the case of the Registration
Statement, it will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and that in the case of the Prospectus,
it will not contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. In any such
event, the Company may suspend use of the prospectus on written notice to each
Holder, in which case each Holder shall not dispose of Registrable Securities
covered by the Shelf Registration Statement or prospectus until copies of a
supplemented or amended prospectus are distributed to the Holders or until the
Holders are advised in writing by the Company that the use of the applicable
prospectus may be resumed. The Company shall use its best efforts to ensure
that the use of the Prospectus may be resumed as soon as practicable. The
Company shall use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of the Shelf Registration Statement, or the
lifting of any suspension of the qualification (or exemption from
qualification) of any of the securities for sale in any jurisdiction, at the
earliest practicable moment. The Company shall, upon the occurrence of any
event contemplated by clause (D), prepare a supplement or post-effective
amendment to the Shelf Registration Statement or a supplement to the related
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, such Prospectus will not contain
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(e) Underwritten Offering. If the holders of not less than 66?%
of the Registrable Securities included in any offering pursuant to such Shelf
Registration Statement so elect, such offering of Registrable Securities shall
be in the form of an Underwritten Offering, and the Company shall, from time
to time, amend (including, to the extent required, through a post-effective
amendment) or supplement the Shelf Registration Statement for such purpose.
The Holders of a majority of such Registrable Securities included in such
Underwritten Offering shall have the right to select the managing underwriter
or underwriters to administer such offering; provided, that such managing
underwriter or underwriters shall be reasonably acceptable to the Company. The
right of any Holder to include its Registrable Securities in such Underwritten
Offering shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting. Notwithstanding anything to the contrary in
this Agreement, in no event shall the aggregate number of days pursuant to
which: (i) the Shelf Registration Statement may be postponed pursuant to
Section 2.1(b) hereto, (ii) a Holder's sales of Registrable Securities may be
suspended pursuant to Section 2.1(d)(i) hereto, (iii) a Holder's sales of
Registrable Securities may be delayed pursuant to Section 2.1(d)(ii) hereto;
and (iv) the Shelf Registration Statement may be suspended pursuant to Section
2.1(f) hereto, exceed 120 days in any twelve (12) month period.
(f) Piggyback Rights. If, at any time, the Company proposes to
register any of its Common Stock or any other equity securities under the
Securities Act on a Registration Statement on Form S-1, Form S-2 or Form S-3
(or an equivalent general registration form then in effect) for purposes of an
offering or sale by or on behalf of the Company of its Common Stock or such
equity securities for its own account (a "Primary Offering"), the Company may
suspend the use of the Shelf Registration Statement for no more than 120 days;
provided, that if the Company exercises its right pursuant to the foregoing,
the Company shall afford the Holders the opportunity to register their
Registrable Securities on the Registration Statement for the Primary Offering
on terms and conditions no less favorable to the Holders than those set forth
in Section 2.4 of the Second Amended and Restated Investor Rights Agreement,
dated as of May 30, 2001, by and among the Company and the Investors (as
defined therein).
2.2 Expenses of Registration. All Registration Expenses shall be
borne by the Company. All Selling Expenses, in any, incurred in connection
with any registrations hereunder, shall be borne by the Holders of the
securities so registered pro rata on the basis of the number of shares so
registered.
2.3 Obligations of the Company.
Subject to the limitations of Sections 2.1 and 2.9, whenever
required to effect the registration of or maintain the effectiveness of the
Shelf Registration Statement for the Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in
connection with such Registration Statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement for the period set forth in
Section 2.1 above.
(b) Furnish to the Holders such number of copies of a
Prospectus, including a preliminary Prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(c) Use its commercially reasonable efforts to register and
qualify the securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as shall be reasonably
requested by the Holders; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions.
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(d) In the event of any Underwritten Offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(e) Notify each Holder of Registrable Securities covered by
such Registration Statement at any time when a Prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any
event as a result of which the Prospectus included in such Registration
Statement, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which such
Prospectus is, or is to be, used, not misleading.
(f) Use its commercially reasonable efforts to furnish, on the
date that such Registrable Securities are delivered to the underwriters for
sale, if such securities are being sold through underwriters, (i) an opinion,
dated as of such date, of the counsel representing the Company for the
purposes of such registration, in form and substance as is customarily given
to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and (ii) a letter dated as of such date, from the
independent certified public accountants of the Company, in form and substance
as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering addressed to the underwriters,
if any.
(g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.
2.4 Furnishing Information. It shall be a condition precedent to the
obligations of the Company to register Registrable Securities held by any
Holder that such selling Holder shall furnish to the Company such information
regarding such Holder, the Registrable Securities held by such Holder and the
intended method of disposition of such securities and shall take all such
action as may be required to effect the registration of their Registrable
Securities.
2.5 Indemnification.
(a) To the extent permitted by law, the Company shall indemnify
and hold harmless each Holder and any underwriter (as defined in the
Securities Act) for such Holder against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation") by the Company: (i) any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement filed as set forth in this Agreement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, (ii) the omission or alleged omission to state therein
a material fact required to be stated therein, or necessary to make the
statements therein not misleading, or (iii) any violation or alleged violation
by the Company of the Securities Act, the Exchange Act, any state securities
law or any rule or regulation promulgated under the Securities Act, the
Exchange Act or any state securities law in connection with the offering
covered by such registration statement; and the Company will pay as reasonably
incurred to each
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such Holder or underwriter any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity agreement
contained in this Section 2.5(a) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Company, which consent shall not be
unreasonably withheld, nor shall the Company be liable in any such case for
any such loss, claim, damage, liability or action (i) to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and
in conformity with written information furnished expressly for use in
connection with such registration by such Holder or underwriter of such Holder
or (ii) with respect to any preliminary prospectus to the extent such loss,
claim, damage, liability or action results from the fact that Holder or
underwriter sold Registrable Securities to a person to whom there was not sent
or given, at or prior to the written confirmation of such sale, a copy of the
final prospectus (excluding documents incorporated by reference) in any case
where such delivery is required by the Securities Act if the Company has
previously furnished copies thereof to such Holder or underwriter on a timely
basis, and the loss, claim, damage or liability of such Holder or underwriter
results from an untrue statement or omission of a material fact contained in
the preliminary prospectus which was corrected in the final prospectus.
(b) To the extent permitted by law, each Holder will, if
Registrable Securities held by such Holder are included in the securities as
to which such registration qualifications or compliance is being effected,
indemnify and hold harmless the Company, any underwriter and any other Holder
selling securities under such registration statement against any losses,
claims, damages or liabilities (joint or several) to which the Company,
underwriter or other such Holder may become subject under the Securities Act,
the Exchange Act or other federal or state law, insofar as such losses,
claims, damages or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder to be specifically for use in
connection with such registration; and each such Holder will pay as reasonably
incurred any legal or other expenses reasonably incurred by the Company,
underwriter or other Holder in connection with investigating or defending any
such loss, claim, damage, liability or action if it is judicially determined
that there was such a Violation; provided, however, that the indemnity
agreement contained in this Section 2.5(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; provided further, that in no event shall any
indemnity under this Section 2.5 exceed the net proceeds from the offering
received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 2.5 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 2.5,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the indemnified party; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the fees and
expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
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indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if materially
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
Section 2.5, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 2.5.
(d) If the indemnification provided for in this Section 2.5 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the Violation(s) that
resulted in such loss, claim, damage or liability, as well as any other
relevant equitable considerations. The relative fault of the indemnifying
party and of the indemnified party shall be determined by a court of law by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates
to information supplied by the indemnifying party or by the indemnified party
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission; provided,
however, that in no event shall any contribution by a Holder hereunder exceed
the net proceeds from the offering received by such Holder.
(e) The obligations of the Company and Holders under this
Section 2.5 shall survive completion of any offering of Registrable Securities
in the Shelf Registration Statement and the termination of this Agreement. No
indemnifying party, in the defense of any such claim or litigation, shall,
except with the consent of each indemnified party, consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
(f) The obligations of the Company under this Section 2.5 shall
extend, upon the same terms and conditions, to each officer, director and
partner of each Holder and underwriter and each person, if any, who controls
any Holder or underwriter within the meaning of the Securities Act; and the
obligations of the Holders or underwriters contemplated by this Section 2.5
shall extend, upon the same terms and conditions, to each officer and director
of the Company (including any person who, with his consent, is named in any
registration statement as about to become a director of the Company) and to
each person, if any, who controls the Company within the meaning of the
Securities Act.
2.6 Assignment of Registration Rights.
The rights pursuant to this Section 2 may be assigned by a Holder to
a transferee or assignee of Registrable Securities which (a) is a subsidiary,
parent, general partner, limited partner, retired partner, member or retired
member of a Holder, or is an affiliate or donee of such Holder, including
without limitations, any partnership or other entity of which any affiliate of
such Holder is a general
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partner or over which such Holder has investment discretion, or any employee
of any of the foregoing, (b) is a Holder's family member or trust for the
benefit of an individual Holder, or (c) acquires at least ten percent (10%) of
the Registrable Securities (as adjusted for stock splits and combinations);
provided, however, (i) the transferor shall, within ten (10) days after such
transfer, furnish to the Company written notice of the name and address of
such transferee or assignee and the securities with respect to which such
registration rights are being assigned, (ii) such transferee shall agree to be
subject to all restrictions set forth in this Agreement and (iii) such
transferee provides the Company with such information as the Company may
reasonably request.
2.7 Amendment of Registration Rights.
Any provision of this Section 2 may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Holders of at least a majority in interest of the Registrable
Securities then outstanding; provided, however, that if such amendment
adversely affects the Registrable Securities held by a non-consenting Holder
in a manner different than that of a consenting Holder, then such amendment or
waiver shall require the consent of such adversely affected non-consenting
party; provided, further, that any waiver or amendment of this Section 2.7
shall require the consent of all parties to this Agreement. Any amendment or
waiver effected in accordance with this Section 2.7 shall be binding upon each
Holder and the Company. By acceptance of any benefits under this Section 2,
Holders of Registrable Securities hereby agree to be bound by the provisions
hereunder.
2.8 Rule 144 Reporting.
With a view to making available to the Holders the benefits of
certain rules and regulations of the SEC which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees
to use its commercially reasonable efforts to:
(a) Make and keep public information available, as those terms
are understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the effective date of
the first registration filed by the Company for an offering of its securities
to the general public;
(b) File with the SEC, in a timely manner, all reports and
other documents required of the Company under the Exchange Act; and
(c) So long as a Holder owns any Registrable Securities,
furnish to such Holder forthwith upon request: a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
of the Securities Act, and of the Exchange Act (at any time after it has
become subject to such reporting requirements); a copy of the most recent
annual or quarterly report of the Company to the extent such reports are not
available on the web site maintained by the SEC; and such other reports and
documents as a Holder may reasonably request in availing itself of any rule or
regulation of the SEC allowing it to sell any such securities without
registration.
-10-
2.9 Termination. The registration rights set forth herein shall
terminate with respect to a Holder (and the shares held by such Holder shall
cease to constitute Registrable Securities) at such time as all of the
Registrable Securities then held by such Holder can be sold by such Holder in
a three-month period in accordance with Rule 144 of the Securities Act.
SECTION 3
MISCELLANEOUS
3.1 Governing Law. This Agreement shall be governed in all respects
by the laws of the State of Delaware without regard to principles of conflict
of laws.
3.2 Successors and Assigns. Except as otherwise expressly provided
herein, the rights and obligations hereunder may not be assigned or delegated
by the Investors or the Company without the prior written consent of the
other; provided, however, that the Investors may assign their rights and
delegate their obligations hereunder, in whole or in part, to any affiliates
of the Investors, including, without limitation, any other partnership or
other entity of which any direct or indirect subsidiary of such Investor or
any affiliate thereof is a general partner or has investment discretion, or
any employees of any of the foregoing subject to applicable securities laws;
provided, further, that any such assignee that acquires any Shares shall, as a
condition to acquiring such Shares, agree to be bound by the provisions of any
agreement applicable to the Shares. The provisions hereof shall inure to the
benefit of, be enforceable by and be binding upon, the successors and
permitted assigns of the parties hereto and each person who shall be a Holder
of Registrable Securities from time to time.
3.3 Entire Agreement. This Agreement and the Stock Purchase
Agreement and the Exhibits and Schedules hereto and thereto, including the
Certificate of Designations of the Company, in the form attached as Exhibit B
to the Stock Purchase Agreement (the "Certificate"), and the other documents
delivered pursuant hereto and thereto constitute the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof and thereof.
3.4 Severability. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
3.5 Amendment and Waiver.
(a) This Agreement may be amended or modified only upon the
written consent of the Company and holders of at least a majority of the
Registrable Securities as of the date of such amendment.
(b) The obligations of the Company and the rights of the
holders of the Registrable Securities under this Agreement may be waived only
with the written consent of the holders of at least a majority of the
Registrable Securities as of the date of such waiver.
-11-
3.6 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any Holder upon any breach,
default or noncompliance by the Company under this Agreement, the Stock
Purchase Agreement or the Certificate shall impair any such right, power or
remedy, nor shall it be construed to be a waiver of any such breach, default
or noncompliance thereafter occurring. It is further agreed that any waiver,
permit, consent or approval of any kind of character on any Holder's part of
any breach, default or noncompliance under this Agreement, the Stock Purchase
Agreement or the Certificate or any waiver on such Holder's part of any
provisions or conditions of this Agreement, the Stock Purchase Agreement or
the Certificate must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, under this Agreement,
the Stock Purchase Agreement or the Certificate, by law or otherwise afforded
to any Holder shall be cumulative and not alternative.
3.7 Notices. Subject to Section 2.1(d)(i), all notices, requests,
demands or other communications which are required or may be given pursuant to
the terms of this Agreement shall be in writing and shall be deemed to have
been duly given: (i) on the date of delivery if personally delivered by hand,
(ii) upon the third day after such notice is (a) deposited in the United
States mail, if mailed by registered or certified mail, postage prepaid,
return receipt requested, or (b) sent by a nationally recognized overnight
express courier, or (iii) by facsimile upon written confirmation (other than
the automatic confirmation that is received from the recipient's facsimile
machine) of receipt by the recipient of such notice:
If to any Investor: To the address or facsimile number of such
Purchaser specified on Exhibit A hereto.
With a copy to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company: PeoplePC Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone No.:
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
-12-
Such addresses may be changed, from time to time, by means of a notice given
in the manner provided in this Section 3.7.
3.8 Titles and Subtitles. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
3.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
3.10 Expenses. The Company and each of the Investors shall pay all
costs and expenses that it incurs with respect to the negotiation, execution,
delivery and performance of this Agreement and all of the transactions
contemplated herein; provided, however, that if the Investors consummate the
purchase of the Registrable Securities contemplated by the Stock Purchase
Agreement, the Company shall reimburse the reasonable legal fees and expenses
of counsel to SOFTBANK Capital Partners LP incurred in connection with the
negotiation, preparation, execution, delivery and performance of this
Agreement and all of the transactions contemplated hereby.
3.11 Specific Enforcement. Any Holder shall be entitled to specific
enforcement of its rights under this Agreement. The Company acknowledges that
money damages would be an inadequate remedy for its breach of this Agreement
and consents to an action for specific performance or other injunctive relief
in the event of any such breach.
3.12 Attorneys' Fees. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party
shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
3.13 Survival. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any Holder and
the closing of the transactions contemplated hereby until the registration
rights set forth herein terminate as provided in Section 2.9; provided,
however, that Section 2.5 and this Section 3 shall survive and remain in
effect indefinitely.
-13-
IN WITNESS WHEREOF, the parties hereto have executed this
REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first paragraph
hereof.
COMPANY:
PEOPLEPC INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE
-14-
IN WITNESS WHEREOF, the parties hereto have executed this
REGISTRATION RIGHTS AGREEMENT as of the date set forth in the first paragraph
hereof.
INVESTOR:
SOFTBANK CAPITAL PARTNERS LP
By: SOFTBANK Capital Partners LLC
Its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Title: Administrative Member
----------------------------
SOFTBANK CAPITAL LP
By: SOFTBANK Capital Partners LLC
Its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Title: Administrative Member
----------------------------
SOFTBANK CAPITAL ADVISORS FUND LP
By: SOFTBANK Capital Partners LLC
Its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Title: Administrative Member
----------------------------
REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE
-15-
SOFTBANK TECHNOLOGY VENTURES IV LP
By: SOFTBANK Technology Ventures IV LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Title:
----------------------------
SOFTBANK TECHNOLOGY ADVISORS FUND LP
By: SOFTBANK Technology Ventures IV LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
Title:
----------------------------
▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE
-16-
@VISO LIMITED
By: /s/ ▇▇▇▇▇ Boulben
-----------------------------------
Name: ▇▇▇▇▇ Boulben
----------------------------
Title: Director
----------------------------
REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE
-17-
CMS TECH CO-INVESTMENT SUBPARTNERSHIP
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Authorized Representative
REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE
-18-
BIB INVESTMENT PARTNERS
By: /s/ ▇▇▇ ▇▇▇▇▇
---------------------------
▇▇▇ ▇▇▇▇▇, Partner
REGISTRATION RIGHTS AGREEMENT
SIGNATURE PAGE
-19-
Exhibit A
SERIES B:
Schedule of Purchasers
NAME AND ADDRESS SHARES
---------------- ---------
Softbank Capital Partners LP 1,799,928
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(fax) ▇▇▇-▇▇▇-▇▇▇▇
Softbank Capital LP 1,769,004
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(fax) ▇▇▇-▇▇▇-▇▇▇▇
Softbank Capital Advisors Fund LP 31,068
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(fax) ▇▇▇-▇▇▇-▇▇▇▇
Softbank Technology Ventures IV LP 49,060
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(fax) ▇▇▇-▇▇▇-▇▇▇▇
Softbank Technology Advisors Fund LP 940
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(fax) ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ 600,000
c/o ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(fax) ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ 60,000
c/o Mayfair Management
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(fax) ▇▇▇-▇▇▇-▇▇▇▇
NAME AND ADDRESS SHARES
---------------- ---------
@viso Limited All shares of Common Stock
c/o Macfarlanes issued upon exercise of the
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Put Option
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(fax) ▇▇-▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
(fax) ▇▇▇-▇▇▇-▇▇▇▇
CMS Tech Co-Investment Subpartnership 50,000
c/o CMS Affiliated Partnerships
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
BIB Investment Partners 15,000
c/o ▇▇▇ ▇▇▇▇▇
CMS Companies
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇