Exhibit 4.2
FIFTH RESTATED AND AMENDED
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INVESTOR'S RIGHTS AGREEMENT
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This Fifth Restated and Amended Investor's Rights Agreement (this
"Agreement") is made and entered into as of September 10, 1999 by and among
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MarketFirst Software, Inc., a Delaware corporation (the "Company"), and the
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persons and entities listed on Exhibit A hereto (the "Investors") and the
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persons listed on Exhibit B attached hereto (the "Founders").
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R E C I T A L S
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A. Certain of the Investors (the "Prior Investors") are holders of
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outstanding shares of the Company's Series A Preferred Stock ("Series A Stock"),
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Series B Preferred Stock ("Series B Stock") and Series C Preferred Stock
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("Series C Stock") issued by the Company to such Prior Investors pursuant to a
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Series A Preferred Stock Purchase Agreement by and among the Company and the
Series A Stock Investors dated October 30, 1996 (the "Series A Agreement"),
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pursuant to a Series B Preferred Stock Purchase Agreement by and between the
Company and the Series B Stock Investors dated October 20, 1997 (the "Series B
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Agreement") or pursuant to a Series C Preferred Stock Purchase Agreement by and
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among the Company and the Series C Stock Investors dated March 6, 1998, as
amended (the "Series C Agreement"). The Prior Investors have also been granted
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certain information and registration rights, rights of first refusal and rights
of co-sale under a Fourth Restated and Amended Investor's Rights Agreement by
and among the Company and the Prior Investors dated January 11, 1999 (the "Prior
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Rights Agreement").
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B. The Investors have agreed to purchase shares of the Series D Preferred
Stock ("Series D Stock"), and collectively with the Series A Stock, the Series B
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Stock and the Series C Stock, the "Preferred Stock," pursuant to the Series D
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Preferred Stock Purchase Agreement by and among the Company and such Investors
dated of even date herewith (the "Series D Agreement"). The Series D Agreement
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provides that, as a condition to the Investors' purchase of shares of Series D
Stock thereunder, the Company will enter into this Agreement and the Investors
will be granted the rights set forth herein.
C. The Company and the undersigned parties hereto desire to enter into
this Agreement in order to amend, restate and replace their rights and
obligations under the Prior Rights Agreement with the rights and obligations set
forth in this Agreement. Section 6.2 of the Prior Rights Agreement provides
that the Prior Rights Agreement may be amended by the written consent of the
Company, the holders of a majority of the Founders' Shares and the holders of
two thirds of the Preferred Stock, voting together as a single class. The
undersigned parties to this Agreement constitute the parties necessary to amend
the Prior Rights Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
1. INFORMATION AND PARTICIPATION RIGHTS.
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1.1 Financial Information. The Company covenants and agrees that,
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commencing on the date of this Agreement, for so long as any Investor holds at
least One Million (1,000,000) shares of Preferred Stock issued under the Series
A Agreement, the Series B Agreement, the Series C Agreement and/or the Series D
Agreement and/or the equivalent number (on an as-converted basis) of shares of
Common Stock of the Company (the "Common Stock") issued upon the conversion of
such shares of Preferred Stock ("Conversion Stock") the Company will:
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(a) Annual Reports. Furnish to such Investor, as soon as
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practicable and in any event within 120 days after the end of each fiscal year
of the Company, a consolidated Balance Sheet as of the end of such fiscal year,
a consolidated Statement of Income and a consolidated Statement of Cash Flows of
the Company and its subsidiaries for such year, setting forth in each case in
comparative form the figures from the Company's previous fiscal year (if any),
all prepared in accordance with generally accepted accounting principles and
practices and audited by nationally recognized independent certified public
accountants;
(b) Quarterly Reports. Furnish to such Investor as soon as
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practicable, and in any case within forty-five (45) days of the end of each
fiscal quarter of the Company (except the last quarter of the Company's fiscal
year), quarterly unaudited financial statements, including an unaudited Balance
Sheet, an unaudited Statement of Income and an unaudited Statement of Cash
Flows, all prepared substantially in accordance with generally accepted
accounting principles and practices.
(c) Monthly Reports. Furnish to such Investor within thirty (30)
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days of the end of each month, an unaudited Statement of Income and Statement of
Cash Flows and Balance Sheet for and as of the end of such month, in reasonable
detail and substantially in the form provided to the Board of Directors.
(d) Annual Budget. Furnish to such Investor as soon as
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practicable, but in any event at least thirty (30) days prior to the end of each
fiscal year, a budget and business plan for the next fiscal year, prepared on a
monthly basis, including balance sheets, income statements and statements of
cash flows for such months and, as soon as prepared, any other budgets or
revised budgets prepared by the Company.
(e) Inspection. The Company shall permit such Investor, at
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Investor's expense, to visit and inspect the Company's properties, to examine
its books of account and records and to discuss the Company's affairs, finances
and accounts with its officers, all at such reasonable times as may be requested
by the Investor.
1.2 Attendance at Board Meetings. For so long as SAP America, Inc.
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("SAP") or entities affiliated with Enterprise Partners ("Enterprise") holds (of
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record or beneficially) at least One Million (1,000,000) shares of Preferred
Stock and/or Conversion Stock (the "Minimum Amount"), SAP, if SAP holds the
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Minimum Amount, or Enterprise, if Enterprise holds the Minimum Amount, or both
SAP and Enterprise, if both entities shall each hold the Minimum
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Amount shall, at the expense of such entity, be entitled to reasonable notice of
and to attend all meetings of the Board of Directors of the Company as an
observer; provided, however, that the Board of Directors may, without prior
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notice, exclude SAP or Enterprise, as the case may be, from attending any part
of any meeting of the Board of Directors if the Board of Directors reasonably
determines that the matters being discussed or to be discussed during such part
of such meeting (i) are of such a competitively sensitive or confidential nature
that disclosure to SAP or Enterprise, as the case may be, could materially
affect the Company's business, plans, or relationships, or (ii) are subject to
the attorney-client privilege.
1.3 Board Participation. For so long as Enterprise holds (of record
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or beneficially) at least nine percent (9%) of the outstanding capital stock of
the Company, each Investor and Founder, upon the request of Enterprise, agrees
to vote such shares of capital stock of the Company owned by such Investor as
may be necessary to elect to the Board of Directors of the Company ( and
maintain in office for so long as Enterprise continues to own at least nine
percent (9%) of the outstanding capital stock of the Company) one (1) individual
designated in writing by Enterprise. For so long as at least a majority of the
shares of Series D Stock originally issued remain outstanding (subject to
appropriate adjustment for any stock splits, reverse stock split, stock
dividend, recapitalization or similar transaction), each Investor and Founder
agrees to vote such shares of capital stock of the Company owned by such
Investor as may be necessary to elect to the Board of Directors of the Company
one (1) individual designated in writing by Excelsior.
1.4 Confidentiality. Each Investor agrees to hold all information
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received pursuant to this Section in confidence, and not to use or disclose any
of such information to any third party, except to the extent such information
may be made publicly available by the Company.
1.5 Termination of Certain Rights. The Company's obligations under
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this Section will terminate upon the closing of the Company's initial public
offering of Common Stock pursuant to an effective firmly underwritten
registration statement filed under the U.S. Securities Act of 1933, as amended
(the "Securities Act").
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2. REGISTRATION RIGHTS.
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2.1 Definitions. For purposes of this Section 2:
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(a) Registration. The terms "register," "registered," and
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"registration" refer to a registration effected by preparing and filing a
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registration statement in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement.
(b) Registrable Securities. The term "Registrable Securities"
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means: (1) all the shares of Common Stock of the Company issued or issuable upon
the conversion of any shares of Preferred Stock issued under the Series A
Agreement, the Series B Agreement, the Series C Agreement and/or the Series D
Agreement, that are now owned or may hereafter be acquired by any Investor or
any permitted successors and assigns of Investor; (2) for the purpose of this
Section 2, any shares of Common Stock now or hereafter held by the Founders (the
"Founders' Shares"); and (3) any shares of Common Stock of the Company issued as
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(or issuable
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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, all such shares of Common Stock described in clause (1) or
(2) of this subsection (b); excluding in all cases, however, any Registrable
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Securities sold by a person in a transaction in which rights under this Section
2 are not assigned in accordance with this Agreement or any Registrable
Securities sold to the public or sold pursuant to Rule 144 promulgated under the
Securities Act; provided, however, that notwithstanding anything herein to the
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contrary, the Founder's Shares shall not be Registrable Securities for purposes
of Section 2.2 of this Agreement.
(c) Registrable Securities Then Outstanding. The number of shares of
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"Registrable Securities Then Outstanding" shall mean the number of shares of
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Common Stock which are Registrable Securities and (1) are then issued and
outstanding or (2) are then issuable pursuant to the exercise or conversion of
then outstanding and then exercisable options, warrants or convertible
securities.
(d) Holder. The term "Holder" means any person owning of record
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Registrable Securities that have not been sold to the public or pursuant to Rule
144 promulgated under the Securities Act or any assignee of record of such
Registrable Securities to whom rights under this Section 2 have been duly
assigned in accordance with this Agreement; provided, however, that for purposes
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of this Agreement, a record holder of shares of Preferred Stock convertible into
such Registrable Securities shall be deemed to be the Holder of such Registrable
Securities; provided further, that ▇▇▇▇▇▇ ▇▇▇▇▇▇ shall be deemed a Holder only
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for the purpose of this Section 2 and ▇▇▇▇ ▇▇▇▇ shall be deemed a Holder only
for the purpose of Section 2 and 3; provided, further, that a holder of
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Founders' Shares (as defined in Section 2.1(b)) shall not be a Holder with
respect to such Founders' Shares for purposes of Section 2.2 of this Agreement;
and provided, further, that the Company shall in no event be obligated to
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register shares of Preferred Stock and that Holders of Registrable Securities
will not be required to convert their shares of Preferred Stock into Common
Stock in order to exercise the registration rights granted hereunder, until
immediately before the closing of the offering to which the registration
relates.
(e) SEC. The term "SEC" or "Commission" means the U.S. Securities and
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Exchange Commission.
2.2 Demand Registration.
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(a) Request by Holders. If the Company shall receive at any time
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after the earlier of (i) December 31, 2001, or (ii) six (6) months after the
effective date of the Company's initial public offering of its securities
pursuant to a registration filed under the Securities Act, a written request
from the Holders of a majority of the Registrable Securities (other than
Founders' Shares) then outstanding that the Company file a registration
statement under the Securities Act covering the registration of the Registrable
Securities pursuant to this Section 2.2, then the Company shall, within ten (10)
business days of the receipt of such request, give written notice of such
request ("Request Notice") to all Holders, and effect, as soon as practicable,
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the registration under the Securities Act of all Registrable Securities (other
than Founders' Shares) which Holders request to be registered and included in
such registration by written notice given such Holders to the Company within
twenty (20) days after receipt of the
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Request Notice, subject only to the limitations of this Section 2.2; provided
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that the Registrable Securities (other than Founders' Shares) requested by all
Holders to be registered pursuant to such request must either (i) be at least
forty percent (40%) of all Registrable Securities (other than Founders' Shares)
then outstanding or (ii) have an anticipated aggregate public offering price
(before any underwriting discounts and commissions) of not less than $20,000,000
if such requested registration is the initial public offering of the Company's
stock registered under this Securities Act.
(b) Underwriting. If the Holders initiating the registration request
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under this Section 2.2 ("Initiating Holders") intend to distribute the
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Registrable Securities covered by their request by means of an underwriting,
then they shall so advise the Company as a part of their request made pursuant
to this Section 2.2 and the Company shall include such information in the
written notice referred to in subsection 2.2(a). In such event, the right of
any Holder to include his Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders
and such Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the managing underwriter or
underwriters selected for such underwriting by the Company and a majority in
interest of the Initiating Holders. Notwithstanding any other provision of this
Section 2.2, if the underwriter(s) advise(s) the Company in writing that
marketing factors require a limitation of the number of securities to be
underwritten then the Company shall so advise all Holders of Registrable
Securities which would otherwise be registered and underwritten pursuant hereto,
and the number of Registrable Securities that may be included in the
underwriting shall be reduced as required by the underwriter(s) and allocated
among the Holders of Registrable Securities on a pro rata basis according to the
number of Registrable Securities then outstanding held by each Holder requesting
registration (including the Initiating Holders); provided, however, that the
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number of shares of Registrable Securities to be included in such underwriting
and registration shall not be reduced unless all other securities of the Company
are first entirely excluded from the underwriting and registration. Any
Registrable Securities excluded and withdrawn from such underwriting shall be
withdrawn from the registration.
(c) Maximum Number of Demand Registrations. The Company is obligated
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to effect only two (2) such registrations pursuant to this Section 2.2.
(d) Deferral. Notwithstanding the foregoing, if the Company shall
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furnish to Holders requesting the filing of a registration statement pursuant to
this Section 2.2, a certificate signed by the President or Chief Executive
Officer of the Company stating that in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company and
its stockholders for such registration statement to be filed and it is therefore
essential to defer the filing of such registration statement, then the Company
shall have the right to defer such filing for a period of not more than 120 days
after receipt of the request of the Initiating Holders; provided, however, that
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the Company may not utilize this right more than once in any twelve (12) month
period.
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(e) Expenses. All expenses incurred in connection with a
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registration pursuant to this Section 2.2, including without limitation all
registration and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company, and the reasonable fees and
disbursements of one counsel for the selling Holders (but excluding
underwriters' discounts and commissions), shall be borne by the Company. Each
Holder participating in a registration pursuant to this Section 2.2 shall bear
such Holder's proportionate share (based on the total number of shares sold in
such registration other than for the account of the Company) of all discounts,
commissions or other amounts payable to underwriters or brokers in connection
with such offering. Notwithstanding the foregoing, the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to this Section 2.2 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities to be
registered, unless the Holders of a majority of the Registrable Securities
(other than Founders' Shares) then outstanding agree to forfeit their right to
one (1) demand registration pursuant to this Section 2.2 (in which case such
right shall be forfeited by all Holders of Registrable Securities); provided,
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further, however, that if at the time of such withdrawal, the Holders have
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learned of a material adverse change in the condition, business, or prospects of
the Company not known to the Holders at the time of their request for such
registration and have withdrawn their request for registration with reasonable
promptness after learning of such material adverse change, then the Holders
shall not be required to pay any of such expenses and shall retain their rights
pursuant to this Section 2.2.
2.3 Piggyback Registrations. The Company shall notify all Holders of
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Registrable Securities in writing at least thirty (30) days prior to filing any
registration statement under the Securities Act for purposes of effecting a
public offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding any registration statements relating to any employee
benefit plan or a corporate reorganization) and will afford each such Holder an
opportunity to include in such registration statement all or any part of the
Registrable Securities then held by such Holder. Each Holder desiring to
include in any such registration statement all or any part of the Registrable
Securities held by such Holder shall, within twenty (20) days after receipt of
the above-described notice from the Company, so notify the Company in writing,
and in such notice shall inform the Company of the number of Registrable
Securities such Holder wishes to include in such registration statement. If a
Holder decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.
(a) Underwriting. If a registration statement under which the
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Company gives notice is for an underwritten offering, then the Company shall so
advise the Holders of Registrable Securities. In such event, the right of any
such Holder's Registrable Securities to be included in a registration pursuant
to this Section 2.3 shall be conditioned upon such Holder's participation in
such underwriting and the inclusion of such Holder's Registrable Securities in
the underwriting to the extent provided herein. All Holders proposing to
distribute their Registrable Securities through such underwriting shall enter
into an underwriting agreement in customary form with the managing underwriter
or underwriter(s) selected for such underwriting.
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Notwithstanding any other provision of this Agreement, if the managing
underwriter determine(s) in good faith that marketing factors require a
limitation of the number of shares to be underwritten, then the managing
underwriter(s) may exclude shares (including Registrable Securities) from the
registration and the underwriting, and the number of shares that may be included
in the registration and the underwriting shall be allocated, first, to the
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Company, second, to each of the Investors requesting inclusion of their
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Registrable Securities in such registration statement on a pro rata basis based
on the total number of Registrable Securities then held by each such Investor,
and third, to each of the Founders requesting inclusion of their Registrable
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Securities in such registration statement on a pro rata basis based on the total
number of Registrable Securities then held by such Founder; provided, however,
that in each registration in which the Investors are permitted to include
Registrable Securities the Founders shall be permitted to sell no less than the
lesser of (i) that number of shares equal to the quotient obtained by dividing
$500,000 by the fair market value of a share included in such registration, such
shares to be allocated between Founders on a pro rata basis based on the total
number of Registrable Securities then held by each Founder, or (ii) the number
of shares of Registrable Securities that each Founder would be permitted to
include in such a registration if the Founders were eligible to participate in
the registration on a pro rata basis with the Investors. In no event shall the
amount of securities of the selling Holders included in the offering be reduced
below thirty percent (30%) of the total amount of securities included in such
offering, unless such offering is the initial public offering of the Company's
securities, in which case the selling Holders may be excluded if the
underwriters make the determination described above and no other stockholder's
securities are included in such offering. If any Holder disapproves of the terms
of any such underwriting, such Holder may elect to withdraw therefrom by written
notice to the Company and the underwriter, delivered at least ten (10) business
days prior to the effective date of the registration statement. Any Registrable
Securities excluded or withdrawn from such underwriting shall be excluded and
withdrawn from the registration. For any Holder which is a partnership or
corporation, the partners, retired partners and stockholders of such Holder, or
the estates and family members of any such partners and retired partners and any
trusts for the benefit of any of the foregoing persons shall be deemed to be a
single "Holder", and any pro rata reduction with respect to such "Holder" shall
be based upon the aggregate amount of shares carrying registration rights owned
by all entities and individuals included in such "Holder", as defined in this
sentence.
(b) Expenses. All expenses incurred in connection with a
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registration pursuant to this Section 2.3 (excluding underwriters' and brokers'
discounts and commissions), including, without limitation all federal and "blue
sky" registration and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company and reasonable fees and
disbursements of one counsel for the selling Holders shall be borne by the
Company.
2.4 Obligations of the Company. Whenever required under this Section
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2 to effect the registration of any Registrable Securities, the Company shall,
as expeditiously as reasonably possible:
(a) prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for a period of up to one hundred
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twenty (120) days or, if earlier, until the distribution contemplated in the
Registration Statement has been completed;
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
(c) furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them;
(d) use best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdiction as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions;
(e) in the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering;
(f) notify each Holder of Registrable Securities covered by such
registration statement at any time when prospectus relating thereto is required
to be delivered under the Securities Act or the happening of any event as a
result of which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
(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; and
(h) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
2.5 Furnish Information. It shall be a condition precedent to the
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obligations of the Company to take any action pursuant to Sections 2.2 or 2.3
that the selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition of such securities as shall be required to timely effect the
registration of their Registrable Securities.
2.6 Delay of Registration. No Holder shall have any right to obtain
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or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 2.
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2.7 Indemnification. In the event any Registrable Securities are
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included in a registration statement under this Section 2:
(a) By the Company. To the extent permitted by law, the Company
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will indemnify and hold harmless each Holder, the partners, officers and
directors of each Holder, any underwriter (as defined in the Securities Act) for
such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Securities Exchange Act of 1934,
as amended, (the "1934 Act"), against any losses, claims, damages, or
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liabilities (joint or several) to which they may become subject under the
Securities Act, the l934 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"):
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(i) any untrue statement or alleged untrue
statement of a material fact contained in such
registration statement, 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 1934 Act, any
federal or state securities law or any rule or
regulation promulgated under the Securities Act, the
1934 Act or any federal or state securities law in
connection with the offering covered by such
registration statement;
and the Company will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or defending any
such loss, claim, damage, liability or action; provided however, that the
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indemnity agreement contained in this subsection 2.7(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 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, partner, officer, director, underwriter
or controlling person of such Holder.
(b) By Selling Holders. To the extent permitted by law, each
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selling Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the registration statement, each
person, if any, who controls the Company within the meaning of the Securities
Act, any underwriter and any other Holder selling securities under such
registration statement or any of such other Holder's partners, directors or
officers or any person who controls such Holder within the meaning of the
Securities Act or the 1934 Act,
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against any losses, claims, damages or liabilities (joint or several) to which
the Company or any such director, officer, controlling person, underwriter or
other such Holder, partner or director, officer or controlling person of such
other Holder may become subject under the Securities Act, the 1934 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 expressly for use in connection with such registration; and each such
Holder will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, underwriter or other
Holder, partner, officer, director or controlling person of such other Holder in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
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in this subsection 2.7(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; and provided further, that the total amounts payable in indemnity by a
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Holder in respect of any Violation shall not exceed the net proceeds received by
such Holder in the registered offering out of which such Violation arises.
(c) Notice. Promptly after receipt by an indemnified party of notice
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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, 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 parties; provided, however,
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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 conflict of interests between such
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 prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 2.7, 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 Agreement.
(d) Defect Eliminated in Final Prospectus. The foregoing indemnity
-------------------------------------
agreements of the Company and Holders are subject to the condition that, insofar
as they relate to any Violation made in a preliminary prospectus but eliminated
or remedied in the amended prospectus on file with the SEC at the time the
registration statement in question becomes effective or the amended prospectus
filed with the SEC pursuant to SEC Rule 424(b) (the "Final Prospectus"), such
-----------------
indemnity agreement shall not inure to the benefit of any person if a copy of
the Final Prospectus was furnished to the indemnified party and was not
furnished to the person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the Securities Act.
(e) Contribution. In order to provide for just and equitable
------------
contribution to joint liability under the Securities Act in any case in which
either (i) any Holder
10
exercising rights under this Agreement, or any controlling person of any such
Holder, makes a claim for indemnification pursuant to this Section 2.7, but it
is judicially determined (by the entry of a final judgment or decree by a court
of competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Agreement provides for indemnification
in such case, or (ii) contribution under the Securities Act may be required on
the part of any such selling Holder or any such controlling person in
circumstances for which indemnification is provided under this Agreement; then,
and in each such case, the Company and such Holder will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that such Holder is
responsible for the portion represented by the percentage that the public
offering price of its Registrable Securities offered by and sold under the
registration statement bears to the public offering price of all securities
offered by and sold under such registration statement, and the Company and other
selling Holders are responsible for the remaining portion; provided, however,
-------- -------
that, in any such case, (A) no such Holder will be required to contribute any
amount in excess of the public offering price of all such Registrable Securities
offered and sold by such Holder pursuant to such registration statement; and (B)
no person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) will be entitled to contribution from
any person or entity who was not guilty of such fraudulent misrepresentation.
(f) Survival. The obligations of the Company and Holders under
--------
this Section 2.7 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.
(g) Underwriting Agreement. Notwithstanding the foregoing, to
----------------------
the extent that provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public
offering conflict with the foregoing provisions of this Section, the provisions
in the underwriting agreement shall control.
2.8 "Market Stand-Off" Agreement. Each Holder hereby agrees that it
---------------------------
shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell, lend, offer, pledge, contract to sell, sell any
option or contract to purchase, purchase any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
Registrable Securities or other shares of stock of the Company then owned by
such Holder (other than to donees or partners of the Holder who agree to be
similarly bound) for up to one hundred eighty (180) days following the effective
date of a registration statement of the Company filed under the Securities Act;
provided, however, that:
-------- -------
(a) such agreement shall be applicable only to the first such
registration statement of the Company which covers securities to be sold on its
behalf to the public in an underwritten offering but not to Registrable
Securities sold pursuant to such registration statement; and
(b) all officers and directors of the Company then holding
Common Stock of the Company and all greater than 10% stockholders of the Company
enter into similar agreements.
11
In order to enforce the foregoing covenant, the Company shall have the
right to place restrictive legends on the certificates representing the shares
and to impose stop transfer instructions with respect to the Registrable
Securities and such other shares of stock of each Holder (and the shares or
securities of every other person subject to the foregoing restriction) until the
end of such period.
2.9 Rule 144 Reporting. With a view to making available the benefits
------------------
of certain rules and regulations of the Commission which may at any time permit
the sale of the Registrable Securities to the public without registration, after
such time as a public market exists for the Common Stock of the Company, the
Company agrees to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date of the first registration under the Securities Act
filed by the Company for an offering of its securities to the general public;
(b) Use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the 1934 Act (at any time after it has become subject to such
reporting requirements); and
(c) So long as a Holder owns any Registrable Securities, to
furnish to the Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144 (at any
time after 90 days after the effective date of the first registration statement
filed by the Company for an offering of its securities to the general public),
and of the Securities Act and the 1934 Act (at any time after it has become
subject to the reporting requirements of the 1934 Act), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company as a Holder may reasonably request in availing itself
of any rule or regulation of the Commission allowing a Holder to sell any such
securities without registration (at any time after the Company has become
subject to the reporting requirements of the 1934 Act).
2.10 Termination of the Company's Obligations. The Company shall
----------------------------------------
have no obligations pursuant to Sections 2.2 or 2.3 with respect to any
Registrable Securities proposed to be sold by a Holder in a registration
pursuant to Sections 2.2 or 2.3 if, in the opinion of counsel to the Company,
all such Registrable Securities proposed to be sold by a Holder may be sold in a
three-month period without registration under the Securities Act pursuant to
Rule 144 under the Securities Act.
3. RIGHT OF FIRST REFUSAL.
----------------------
3.1 General. Each Holder (as defined in Section 2.1(d)) and any
-------
party to whom such Holder's rights under this Section 3 have been duly assigned
in accordance with Section 4.1(b) (each such Holder or assignee being
----
hereinafter referred to as a "Rights Holder") has the right of first refusal to
-------------
purchase such Rights Holder's Pro Rata Share (as defined below), of all (or any
part) of any "New Securities" (as defined in Section 3.2) that the Company may
from time to time issue after the date of this Agreement. A Rights Holder's
"Pro Rata Share" for
--------------
12
purposes of this right of first refusal is the ratio of (a) the number of shares
of Registrable Securities as to which such Rights Holder is the Holder (and/or
is deemed to be the Holder under Section 2.1(d)), to (b) a number of shares of
Common Stock of the Company equal to the sum of (i) the total number of shares
of Common Stock of the Company then outstanding plus (ii) the total number of
shares of Common Stock of the Company into which all then outstanding shares of
Preferred Stock of the Company are then convertible.
3.2 New Securities. "New Securities" shall mean any Common Stock or
-------------- --------------
Preferred Stock of the Company, whether now authorized or not, and rights,
options or warrants to purchase such Common Stock or Preferred Stock, and
securities of any type whatsoever that are, or may become, convertible or
exchangeable into such Common Stock or Preferred Stock; provided, however, that
-------- -------
the term "New Securities" does not include:
---- --- -------
(i) shares of the Company's Common Stock issuable to employees,
officers, directors, contractors, advisors or consultants of the Company
pursuant to incentive agreements or plans approved by the Board of Directors of
the Company;
(ii) any securities issuable upon conversion of or with respect
to any then outstanding shares of Preferred Stock of the Company or Common Stock
or other securities issuable upon conversion thereof;
(iii) any securities issuable upon exercise of any options,
warrants or rights to purchase any securities of the Company (not described in
subsection 3.2(i)) outstanding on the date of this Agreement ("Warrant
-------
Securities") and any securities issuable upon the conversion of any Warrant
----------
Securities;
(iv) shares of the Company's Common Stock or preferred stock
issued in connection with any stock split or stock dividend;
(vi) shares of the Company's Common Stock (and/or options or
warrants therefor) issued or issuable to parties providing the Company with
equipment leases, real property leases, loans, credit lines, guaranties of
indebtedness, cash price reductions or similar financing, (if in transactions
with primarily non-equity financing purposes) under arrangements approved by the
Board; or
(vii) securities issued pursuant to the acquisition of another
corporation or entity by the Company by consolidation, merger, purchase of all
or substantially all of the assets, or other reorganization in which the Company
acquires, in a single transaction or series of related transactions, all or
substantially all of the assets of such other corporation or entity or fifty
percent (50%) or more of the voting power of such other corporation or entity or
fifty percent (50%) or more of the equity ownership of such other entity.
3.3 Procedures. In the event that the Company proposes to undertake
----------
an issuance of New Securities, it shall give to each Rights Holder written
notice of its intention to issue New Securities (the "Notice"), describing the
------
type of New Securities and the price and the general terms upon which the
Company proposes to issue such New Securities. Each Rights
13
Holder shall have twenty (20) days from the date of receipt of any such Notice
to agree in writing to purchase such Rights Holder's Pro Rata Share of such New
Securities for the price and upon the general terms specified in the Notice by
giving written notice to the Company and stating therein the quantity of New
Securities to be purchased (not to exceed such Rights Holder's Pro Rata Share).
If any Rights Holder fails to so agree in writing within such twenty (20) day
period to purchase such Rights Holder's full Pro Rata Share of an offering of
New Securities (a "Nonpurchasing Holder"), then such Nonpurchasing Holder shall
--------------------
forfeit the right hereunder to purchase that part of his Pro Rata Share of such
New Securities that he did not so agree to purchase and the Company shall
promptly give each Rights Holder who has timely agreed to purchase his full Pro
Rata Share of such offering of New Securities (a "Purchasing Holder") written
-----------------
notice of the failure of any Nonpurchasing Holder to purchase such Nonpurchasing
Rights Holder's full Pro Rata Share of such offering of New Securities (the
"Overallotment Notice"). Each Purchasing Holder shall have a right of
--------------------
overallotment such that such Purchasing Holder may agree to purchase a portion
of the Nonpurchasing Holders' unpurchased Pro Rata Shares of such offering on a
pro rata basis according to the relative Pro Rata Shares of the Purchasing
Rights Holders, at any time within ten (10) days after receiving the
Overallotment Notice.
3.4 Failure to Exercise. In the event that the Rights Holders fail
-------------------
to exercise in full the right of first refusal within such twenty (20) plus ten
(10) day period, then the Company shall have ninety (90) days thereafter to sell
the New Securities with respect to which the Rights Holders' rights of first
refusal hereunder were not exercised, at a price and upon general terms not
materially more favorable to the purchasers thereof than specified in the
Company's Notice to the Rights Holders. In the event that the Company has not
issued and sold the New Securities within such ninety (90) day period, then the
Company shall not thereafter issue or sell any New Securities without again
first offering such New Securities to the Rights Holders pursuant to this
Section 3.
3.5 Termination. This right of first refusal shall terminate (i)
-----------
immediately before the closing of the first firmly underwritten sale of Common
Stock of the Company to the public pursuant to a registration statement filed
with, and declared effective by, the SEC under the Securities Act at a public
offering price of not less than $20,000,000 in the aggregate; or (ii) upon (a)
the acquisition of all or substantially all the assets of the Company or (b) an
acquisition of the Company by another corporation or entity by consolidation,
merger or other reorganization in which the holders of the Company's outstanding
voting stock immediately prior to such transaction own, immediately after such
transaction, securities representing less than fifty percent (50%) or more of
the voting power of the parent corporation or other entity surviving such
transaction pursuant to this Section 3.
4. COMPANY RIGHT OF FIRST REFUSAL. Before any Preferred Stock held by
------------------------------
Investor or any transferee of such Preferred Stock (either being sometimes
referred to herein as the "Holder") may be sold or otherwise transferred, the
------
Company will have a right of first refusal to purchase the Preferred Stock to be
sold or transferred (the "Offered Stock") on the terms and conditions set forth
-------------
in this Section (the "Company Right of First Refusal").
------------------------------
14
(a) Notice of Proposed Transfer. The Holder of the Preferred Stock
---------------------------
will deliver to the Company a written notice (the "Notice") stating: (i) the
------
Holder's bona fide intention to sell or otherwise transfer the Offered Stock;
(ii) the name of each proposed Purchaser or other transferee ("Proposed
--------
Transferee"); (iii) the number of shares of Offered Stock to be transferred to
----------
each Proposed Transferee; (iv) the bona fide cash price or other consideration
for which the Holder proposes to transfer the Offered Stock (the "Offered
-------
Price"); and (v) that the Holder will offer to sell the Offered Stock to the
-----
Company at the Offered Price as provided in this Section.
(b) Exercise of Company Right of First Refusal. At any time within
------------------------------------------
thirty (30) days after the date of the Notice, the Company may, by giving
written notice to the Holder (the "Exercise Notice"), elect to purchase all (but
---------------
not less than all) of the Offered Stock proposed to be transferred to any one or
more of the Proposed Transferees named in the Notice, at the purchase price
determined in accordance with subsection (c) below.
(c) Purchase Price. The purchase price for the Offered Stock
--------------
purchased under this Section will be the Offered Price. If the Offered Price
includes consideration other than cash, then the value of the non-cash
consideration as determined in good faith by the Company's Board of Directors
will conclusively be deemed to be the cash equivalent value of such non-cash
consideration.
(d) Payment. Payment of the purchase price for Offered Stock will be
-------
payable, at the option of the Company and/or its assignee(s) (as applicable), by
check or by cancellation of all or a portion of any outstanding indebtedness of
the Holder to the Company or by any combination thereof. The purchase price
will be paid without interest and the closing shall be held within ten (10)
business days following the delivery of the Exercise Notice.
(e) Holder's Right to Transfer. In the event the Exercise Notice is
--------------------------
not given to Investor prior to the expiration of the thirty (30) day exercise
period, then the Holder may sell or otherwise transfer such Offered Stock to
that Proposed Transferee at the Offered Price or at a higher price, provided
--------
that such sale or other transfer is consummated within 120 days after the date
of the Notice, and provided further, that: (i) any such sale or other transfer
-------- -------
is effected in compliance with all applicable securities laws; and (ii) the
Proposed Transferee agrees in writing that the provisions of this Section will
continue to apply to the Offered Stock in the hands of such Proposed Transferee.
If the Offered Stock described in the Notice is not transferred to the Proposed
Transferee within such 120 day period, then a new Notice must be given to the
Company, and the Company will again be offered the Right of First Refusal before
any Preferred Stock held by the Holder may be sold or otherwise transferred.
(f) Exempt Transfers. Notwithstanding anything to the contrary in
----------------
this Section, the following transfers of Preferred Stock will be exempt from the
Company Right of First Refusal: (i) the transfer of any or all of the Preferred
Stock during Investor's lifetime by gift or on Investor's death by will or
intestacy to Investor's "immediate family" (as defined below) or to a trust for
the benefit of Investor or Investor's immediate family, provided that each
transferee or other recipient agrees in a writing satisfactory to the Company
that the provisions of this Section will continue to apply to the transferred
Preferred Stock in the hands of such transferee or
15
other recipient; (ii) any transfer of Preferred Stock made pursuant to a
statutory merger or statutory consolidation of the Company with or into another
corporation or corporations (except that the Company Right of First Refusal will
continue to apply thereafter to such Preferred Stock, in which case the
surviving corporation of such merger or consolidation shall succeed to the
rights or the Company under this Section unless the agreement of merger or
consolidation expressly otherwise provides); (iii) any transfer of Preferred
Stock pursuant to the winding up and dissolution of the Company; or (iv) any
transfer to an entity affiliated with the Investors or distribution from such
funds to any general partners, limited partners shareholders or members. As used
herein, the term "immediate family" will mean Investor's spouse, lineal
----------------
descendant or antecedent, father, mother, brother or sister, adopted child or
grandchild, or the spouse of any child, adopted child, grandchild or adopted
grandchild of Investor.
(g) Termination of Company Right of First Refusal. The Company Right
---------------------------------------------
of First Refusal will terminate as to all Preferred Stock on the effective date
of the first sale of common stock of the Company to the general public pursuant
to a registration statement filed with and declared effective by the SEC under
the 1933 Act (other than a registration statement relating solely to the
issuance of common stock pursuant to a business combination or an employee
incentive or benefit plan).
(h) Encumbrances on Preferred Stock. Investor may ▇▇▇▇▇ ▇ ▇▇▇▇ or
-------------------------------
security interest in, or pledge, hypothecate or encumber Preferred Stock only if
each party to whom such lien or security interest is granted, or to whom such
pledge, hypothecation or other encumbrance is made, agrees in a writing
satisfactory to the Company that: (i) such lien, security interest, pledge,
hypothecation or encumbrance will not apply to such Preferred Stock after they
are acquired by the Company and/or its assignees) under this Section; and (ii)
the provisions of this Section will continue to apply to such Preferred Stock in
the hands of such party and any transferee of such party. Investor may not
▇▇▇▇▇ ▇ ▇▇▇▇ or security interest in, or pledge, hypothecate or encumber, any
Preferred Stock.
5. RIGHT OF CO-SALE.
----------------
5.1 Certain Definitions. For purposes of this Agreement, the
-------------------
following terms have the following meanings:
(a) "Stock" for purposes of this section, means and includes all
-----
shares of Common Stock issued and outstanding at the relevant time plus (a) all
shares of Common Stock that may be issued upon exercise of any options, warrants
and other rights of any kind that are then exercisable, and (b) all shares of
Common Stock that may be issued upon conversion of (i) any convertible
securities, including, without limitation, Preferred Stock and debt securities
then outstanding, which are by their terms then convertible into or exchangeable
for Common Stock or (ii) any such convertible securities issuable upon exercise
of outstanding options, warrants or other rights that are then exercisable.
(b) "Offered Stock" for purposes of this section, means all Stock
-------------
proposed to be Transferred by a Founder.
16
(c) "Transfer" and "Transferred" for purposes of this section, means
-------- -----------
and includes any sale, assignment, encumbrance, hypothecation, pledge,
conveyance in trust, gift, transfer by bequest, devise or descent, or other
transfer or disposition of any kind, including but not limited to transfers to
receivers, levying creditors, trustees or receivers in bankruptcy proceedings or
general assignees for the benefit of creditors, whether voluntary or by
operation of law, directly or indirectly, except for:.
------ ---
(i) any transfers of Stock by gift during a Founder's lifetime or
on a Founder's death by will or intestacy to such Founder's "immediate family"
(as defined below) or to a trust for the benefit of Founder or Founder's
immediate family, provided that each transferee or other recipient executes a
counterpart copy of this Agreement and becomes bound thereby as a Founder. For
purposes of this Agreement, the term "immediate family" means Founder's spouse,
----------------
lineal descendant (whether natural or adopted) or antecedent, brother or sister,
or the spouse of any of the foregoing; and
(ii) any transfer of Stock by a Founder made: (i) pursuant to a
statutory merger or statutory consolidation of the Corporation with or into
another corporation or corporations; (ii) pursuant to the winding up and
dissolution of the Corporation; or at, and pursuant to, an IPO.
(d) "IPO" for purposes of this section, means the first sale of the
---
Corporation's Common Stock for at least $2.13 per share to the general public
pursuant to a registration statement under the 1933 Act in which the gross
proceeds to the Corporation (without reduction for underwriter's discounts and
commissions or expenses of the sale), equals or exceeds $20,000,000.
5.2 Notice Of Proposed Transfer. Before any Founder may effect any
---------------------------
Transfer of any Stock, such Founder (the "Selling Founder") must give at the
---------------
same time to the Company and the Investors a written notice signed by the
Selling Founder (the "Selling Founder's Notice") stating (a) the Selling
------------------------
Founder's bona fide intention to transfer such Offered Stock; (b) the number of
shares of Offered Stock proposed to be transferred to each proposed purchaser or
other transferee ("Proposed Transferee"); (c) the name, address and
-------------------
relationship, if any, to the Selling Founder of each Proposed Transferee; and
(d) the bona fide cash price or, in reasonable detail, other consideration, per
share for which the Selling Founder proposes to transfer such Offered Stock to
each Proposed Transferee (the "Offered Price"). Upon the request of the
-------------
Corporation or any Investor, the Founder will promptly furnish to the
Corporation and to the Investors such other information as may be reasonably
requested to establish that the offer and Proposed Transferee(s) are bona fide.
5.3 Right of Co-Sale. To the extent the Company does not exercise
----------------
its right of first refusal in Section 2 of those certain Investment
Representation Agreements dated August 15, 1996 by and between the Company and
each of the Founders as to all of the Offered Stock, then each Investor will
have the right to participate in the sale of any Offered Stock not sold to the
Corporation or to the Investors (the "Remaining Offered Stock") in the manner
-----------------------
set forth herein (the "Right of Co-Sale"). Pursuant to this Section 5, each
----------------
Investor may transfer to the Proposed Transferee(s) identified in the Selling
Founder's Notice such Investor's Pro Rata Share of the
17
Remaining Offered Stock by giving written notice to the Selling Founder within
fifteen (15) days after the date of the Selling Founder's Notice; specifying the
number of shares and type of Stock that such Investor desires to transfer to
each Proposed Transferee by exercising the Right of Co-Sale. For purposes of
this Section 5, an Investor's "Pro Rata Share" will be defined as a fraction,
--------------
the numerator of which is the number of shares of Stock then owned by such
Investor, and the denominator of which is the number of shares of Stock then
owned by all Investors having a Right of Co-Sale hereunder plus the number of
shares of Stock held by the Selling Founder who proposes the Transfer. The Right
of Co-Sale shall expire upon the IPO.
5.4 Consummation of Co-Sale. Each Investor, in exercising the Right
-----------------------
of Co-Sale, may effect such Investor's participation in such Transfer by
delivering to the Selling Founder at the closing of the transfer of Offered
Stock to such transferee (the "Closing") one or more certificates, properly
-------
endorsed for Transfer, representing such Stock to be Transferred by such
Investor. At the Closing, such certificates or other instruments will be
transferred and delivered to the Proposed Transferee(s) set forth in the Selling
Founder's Notice in consummation of the transfer of the Offered Stock pursuant
to the terms and conditions specified in the Selling Founder's Notice, and the
Founder will remit, or will cause to be remitted, to Investor within seven (7)
days after such Closing that portion of the proceeds of the Transfer to which
Investor is entitled by reason of such Investor's participation in such transfer
pursuant to the Right of Co-Sale.
5.5 Prohibited Transfers.
--------------------
(a) In the event a Founder should sell any Founders' Shares (the
"Selling Founder") in contravention of the Right of Co-Sale of the Investors
---------------
under this Agreement (a "Prohibited Transfer"), each Investor, in addition to
-------------------
such other remedies as may be available at law, in equity or hereunder, shall
have the put option provided below, and the Selling Founder shall be bound by
the applicable provisions of such option.
(b) In the event of a Prohibited Transfer, each Investor shall
have the right to sell to the Selling Founder the type and number of shares of
Common Stock (either directly or through delivery of Preferred Stock) equal to
the number of shares each Investor would have been entitled to transfer to the
purchaser had the Prohibited Transfer under Section 5.3 hereof been effected
pursuant to and in compliance with the terms hereof. Such sale shall be made on
the following terms and conditions:
(i) The price per share at which the shares are to be sold
to the Selling Founder shall be equal to the price per share paid
by the purchaser to the Selling Founder in the Prohibited
Transfer. The Selling Founder shall also reimburse each Investor
for any and all fees and expenses, including legal fees and
expenses, incurred pursuant to the exercise or the attempted
exercise of the Investor's rights under Section 5.3.
(ii) Within 90 days after the later of the dates on which
the Investor (a) received notice of the Prohibited Transfer or
(b) otherwise became aware of the Prohibited Transfer, each
Investor shall, if exercising
18
the option created hereby, deliver to the Selling Founder the
certificate or certificates representing shares to be sold, each
certificate to be properly endorsed for transfer.
(iii) The Selling Founder shall, upon receipt of the
certificate or certificates for the shares to the sold by an
Investor, pursuant to this subparagraph 5.5(b), pay the aggregate
purchase price therefor and the amount of reimbursable fees and
expenses, as specified in subparagraph 5.5(b)(i), in cash or by
other means acceptable to the Investor.
(iv) Notwithstanding the foregoing, any attempt by a Selling
Founder to transfer Founders' Shares in violation of section 5.3
hereof shall be void and the Company agrees it will not effect
such a transfer nor will it treat any alleged transferee as the
holder of such shares without the written consent of a majority
in interest of the Investors.
6. ASSIGNMENT AND AMENDMENT.
------------------------
6.1 Assignment. Notwithstanding anything herein to the contrary:
----------
(a) Information Rights. The rights of an Investor under Section
------------------
1 hereof may be assigned only to a party who acquires from an Investor (or an
Investor's permitted assigns) at least 1,000,000 shares of Preferred Stock
and/or an equivalent number (on an as-converted basis) of shares of Conversion
Stock.
(b) Registration Rights; Refusal Rights. The registration
-----------------------------------
rights of a Holder under Section 2 hereof and the rights of first refusal of a
Rights Holder under Section 3 hereof may be assigned only to a party who
acquires at least 250,000 shares of Preferred Stock and/or an equivalent number
(on an as-converted basis) of Registrable Securities issued upon conversion
thereof; provided, however that no such assignment shall be effective until the
-------- -------
Company receives written notice from the assigning party stating the name and
address of the assignee and identifying the securities of the Company as to
which the rights in question are being assigned; and provided further that any
-------- -------
such assignee shall receive such assigned rights subject to all the terms and
conditions of this Agreement, including without limitation the provisions of
this Section 4.
6.2 Amendment of Rights. Any provision of this Agreement 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 Investors (and/or any of their permitted
successors or assigns) holding 662/3% of the shares of Preferred Stock and/or
Conversion Stock, provided, however, that the piggyback registration rights
granted to the Founders under Section 2 of this Agreement may not be eliminated
or materially and adversely changed without the written consent of persons
holding a majority of the Founders' Shares and, provided, further, that no
-------- -------
provision of this Agreement affecting the rights of the holders of Series D
Stock may be amended or waived without the written consent of the majority
19
of the holders of shares of Series D Stock and/or shares of Common Stock of the
Company issued upon the conversion of shares of Series D Stock.
7. GENERAL PROVISIONS.
------------------
7.1 Notices. Any notice, request or other communication required or
-------
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if deposited in the U.S. mail by registered or
certified mail, return receipt requested, postage prepaid, (a) if to an Investor
at such Investor's address set forth in Exhibit A, or at such other address as
---------
such Investor shall have furnished to the Company in writing, (b) if to the
Company at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and addressed to
the Corporate Secretary or at such other address as the Company shall have
furnished to the Investors, (c) if to a Founder, as follows at such founder's
address set forth in Exhibit B, or at such other address as such Founder shall
---------
have furnished to the Company in writing. Any party hereto (and such party's
permitted assigns) may by notice so given change its address for future notices
hereunder. Notice shall conclusively be deemed to have been given when
personally delivered or when deposited in the mail in the manner set forth
above.
7.2 Entire Agreement. This Agreement, together with all the Exhibits
----------------
hereto, constitutes and contains the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes the Prior
Rights Agreement and any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties respecting the subject
matter hereof. This Agreement will amend and restate the Prior Rights Agreement
to read as set forth herein, when it has been duly executed by parties having
the right to so amend and restate the Prior Rights Agreement.
7.3 Governing Law. This Agreement shall be governed by and construed
-------------
exclusively in accordance with the internal laws of the State of California as
applied to agreements among California residents entered into and to be
performed entirely within California, excluding that body of law relating to
conflict of laws and choice of law.
7.4 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, then such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
7.5 Third Parties. Nothing in this Agreement, express or implied, is
-------------
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.
7.6 Successors And Assigns. Subject to the provisions of Section 4.1,
----------------------
the provisions of this Agreement shall inure to the benefit of, and shall be
binding upon, the successors and permitted assigns of the parties hereto.
20
7.7 Captions. The captions to sections of this Agreement have been
--------
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.
7.8 Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
7.9 Costs And Attorneys' Fees. In the event that any action, suit or
-------------------------
other proceeding is instituted concerning or arising out of this Agreement or
any transaction contemplated hereunder, the prevailing party shall recover all
of such party's costs and attorneys' fees incurred in each such action, suit or
other proceeding, including any and all appeals or petitions therefrom.
7.10 Adjustments for Stock Splits, Etc. Wherever in this Agreement
----------------------------------
there is a reference to a specific number of shares of Common Stock or Preferred
Stock of the Company of any class or series, then, upon the occurrence of any
subdivision, combination or stock dividend of such class or series of stock, the
specific number of shares so referenced in this Agreement shall automatically be
proportionally adjusted to reflect the affect on the outstanding shares of such
class or series of stock by such subdivision, combination or stock dividend.
7.11 Aggregation of Stock. All shares held or acquired by affiliated
--------------------
entities, partners (limited and unlimited), affiliates or persons shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.
7.12 Prior Rights Agreement Superseded. Pursuant to Section 6.2 of
---------------------------------
the Prior Rights Agreement, the undersigned parties who are parties to such
Prior Rights Agreement hereby amend and restate the Prior Rights Agreement to
read in its entirety as set forth in this Agreement, all with the intent and
effect that the Prior Rights Agreement shall be hereby terminated and entirely
replaced and superseded by this Agreement.
21
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
THE COMPANY:
MarketFirst Software, Inc.
By: ____________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇ , Chief Executive Officer
FOUNDERS:
________________________________ ________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
INVESTORS:
________________________________ ________________________________
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
________________________________ ________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
________________________________ ________________________________
▇▇▇▇▇ ▇▇▇▇▇ N.C. ▇▇▇▇▇▇
________________________________ ________________________________
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
[Signature Page to Fifth Restated and Amended Investor's Rights Agreement]
INVESTORS (cont'd):
▇▇▇▇▇ ▇▇▇▇▇▇▇ Trust
_________________________________
▇▇▇▇▇ ▇▇▇▇ By:_________________________________
Name: ______________________________
Title:______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Trust DLJ Capital Corporation
By:______________________________ By:_________________________________
Name:____________________________ ▇▇▇▇ ▇▇▇▇▇
Title:___________________________ Attorney-in-Fact
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ CEO FUND, ▇.▇.
▇▇▇▇▇▇▇ Trustees of The ▇▇▇▇▇▇▇
Family Trust U/D/T 4/2/97 By: DLJ Capital Corporation
Its: General Partner
By:______________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By:______________________________ By:_________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attorney-in-Fact
DLJ ESC II, L.P. SPROUT CAPITAL VIII, L.P.
By: DLJ LBO Plans Management Corporation By: DLJ Capital Corporation
Its: General Partner Its: General Partner
By:______________________________ By:_________________________________
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attorney-in-Fact Attorney-in-Fact
SPROUT CAPITAL VII, L.P. SPROUT VENTURE CAPITAL, L.P.
By: DLJ Capital Corporation By: DLJ Capital Corporation
Its: Managing General Partner Its: General Partner
By:______________________________ By:_________________________________
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attorney-in-Fact Attorney-in-Fact
[Signature Page to Fifth Restated and Amended Investor's Rights Agreement]
INVESTORS (cont'd):
ENTERPRISE PARTNERS IV, L.P. ENTERPRISE PARTNERS IV
ASSOCIATES, L.P.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its: General Partner Its: General Partner
By:_________________________________ By:_________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
General Partner General Partner
____________________________________ ____________________________________
Madhavan Rangaswami ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
____________________________________ ____________________________________
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
____________________________________ ____________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
SAP AMERICA, INC.
By:_________________________________ ____________________________________
Name:_______________________________ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
____________________________________ ____________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ INVESTMENTS
By:_________________________________
Name:_______________________________
Title:______________________________
[Signature Page to Fifth Restated and Amended Investor's Rights Agreement]
INVESTORS (cont'd):
EXCELSIOR PRIVATE EQUITY FUND II, INC.
By:____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Investment Officer
[Signature Page to Fifth Restated and Amended Investor's Rights Agreement]
2
▇▇▇▇▇▇▇▇ New Technologies Fund, Inc.
By J. & ▇. ▇▇▇▇▇▇▇▇ & Co. Incorporated,
its investment adviser
By _________________________________
Name:
Title:
▇▇▇▇▇▇▇▇ Investment Opportunities Master
Fund * NTV Portfolio
By J. & ▇. ▇▇▇▇▇▇▇▇ & Co. Incorporated,
its investment adviser
By _________________________________
Name:
Title:
[Signature Page to Fifth Restated and Amended Investor's Rights Agreement]
3
WINFIELD CAPITAL CORP.
By:____________________________
(Signature)
Print Name:____________________
Print Title:___________________
[Signature Page to Fifth Restated and Amended Investor's Rights Agreement]
4
▇▇▇▇▇▇▇▇ PARTNERS II, L.P.
By:_____________________________
(Signature)
Print Name:_____________________
Print Title:____________________
[Signature Page to Fifth Restated and Amended Investor's Rights Agreement]
5
__________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
__________________________________
▇▇▇ ▇▇▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
__________________________________
▇▇▇▇▇ ▇▇▇▇▇
__________________________________
▇▇▇▇▇ ▇▇▇▇▇
__________________________________
▇▇▇ ▇▇▇▇▇▇
__________________________________
▇▇▇ ▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇
__________________________________
▇▇▇▇▇ ▇▇▇▇▇▇
__________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇
__________________________________
▇▇▇▇▇▇ ▇▇▇▇▇
[Signature Page to Fifth Restated and Amended Investor's Rights Agreement]
6
EXHIBIT A
List of Investors
-----------------
Name and Address Series A Stock Series B Stock Series C Stock Series D Stock
---------------- -------------- -------------- -------------- --------------
▇▇▇▇▇▇ ▇▇▇▇▇ 2,000,000
▇▇▇▇▇ ▇▇▇▇▇
c/o RP Accord Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 40,000 11,000
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ 100,000
▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ 100,000
▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Trust 250,000 61,100
c/o The Portola Group
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, #▇-▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ Trust 250,000 61,100
c/o The Portola Group
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, #▇-▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 100,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ 100,000
c/o Oracle Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇/▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ 200,000
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
List of Investors (cont'd)
Name and Address Series A Stock Series B Stock Series C Stock Series D Stock
---------------- ----------------- ----------------- ----------------- ------------------
▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,000,000 735,294
c/o CrossRoads Software
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., #▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
N.C. ▇▇▇▇▇▇ 100,000 73,530
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DLJ Capital Corporation 116,029 41,259
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
DLJ First ESC L.L.C. 441,176
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
DLJ ESC II, L.P. 394,271 297,074
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Sprout Capital VII, L.P. 4,511,042 1,604,073
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Sprout CEO Fund, L.P. 85,480 30,396
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Sprout Capital VIII, L.P. 3,629,572 1,290,632
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Sprout Venture Capital, L.P. 217,775 77,438
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
2
List of Investors (cont'd)
Name and Address Series A Stock Series B Stock Series C Stock Series D Stock
---------------- ----------------- ----------------- ----------------- ------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ 73,528
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 183,824
c/o Mastech
▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ 183,824
c/o Mastech
▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Madhavan Rangaswami 140,932
c/o The Sand Hill Group
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 140,932
c/o The Sand Hill Group
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SAP America, Inc. 3,676,472 938,967
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ 183,823
▇.▇. ▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 36,764
c/o Morgan ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇.
New York, N.Y. 10036
Enterprise Partners IV, L.P. 4,397,060 1,563,540
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Enterprise Partners IV 382,353 135,960
Associates, L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3
List of Investors (cont'd)
Name and Address Series A Stock Series B Stock Series C Stock Series D Stock
---------------- ----------------- ----------------- ----------------- ------------------
Sippl Investments 147,059 36,500
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ 91,912 20,300
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ 39,706
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Excelsior Private Equity Fund II, Inc. 4,694,407
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Winfield Capital Corporation 938,881
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ Partners II, L.P. 938,881
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Seligman New Technologies Fund, Inc. 1,534,980
c/o ▇.▇. ▇▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Seligman Investment Opportunities 1,000,000
Master Fund* NTV Portfolio
c/o ▇.▇. ▇▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
5
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 4,694
DLJ
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ 4,694
DLJ
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 4,694
DLJ
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ 4,694
DLJ
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ 18,779
DLJ
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ 4,694
DLJ
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ 18,779
DLJ
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 4,694
DLJ
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ 4,694
DLJ
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
6
▇▇▇▇▇ ▇▇▇▇▇▇▇ 4,694
DLJ
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ 56,338
USWeb/CKS
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Totals 2,040,000 2,200,000 19,882,358 15,407,936
7
EXHIBIT B
List of Founders
----------------
Name and Address Common Stock
--------------------------------- ----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 3,852,000
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ 2,000,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Total 5,852,000