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EXHIBIT 10.17
INTERNAP NETWORK SERVICES CORPORATION
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
JANUARY 28, 1999
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TABLE OF CONTENTS
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SECTION 1 GENERAL.......................................................................1
1.1 Definitions...................................................................1
SECTION 2 RESTRICTIONS ON TRANSFER; REGISTRATION........................................3
2.1 Restrictions On Transfer......................................................3
2.2 Demand Registration...........................................................4
2.3 Piggyback Registrations.......................................................5
2.4 Form S-3 Registration.........................................................7
2.5 Expenses Of Registration......................................................8
2.6 Obligations Of The Company....................................................8
2.7 Termination Of Registration Rights............................................9
2.8 Delay Of Registration; Furnishing Information................................10
2.9 Indemnification..............................................................10
2.10 Assignment Of Registration Rights............................................12
2.11 Amendment Of Registration Rights.............................................12
2.12 Limitation On Subsequent Registration Rights.................................12
2.13 "Market Stand-Off" Agreement.................................................13
2.14 Rule 144 Reporting...........................................................13
SECTION 3 COVENANTS OF THE COMPANY.....................................................14
3.1 Basic Financial Information And Reporting....................................14
3.2 Inspection Rights............................................................15
3.3 Confidentiality Of Records...................................................15
3.4 Reservation Of Common Stock..................................................15
3.5 Stock Vesting................................................................15
3.6 Board Election Rights........................................................15
3.7 Employee Confidentiality, Nonraiding and Noncompetition Agreement............15
3.8 Directors' Liability And Indemnification.....................................16
3.9 Board Of Directors Approval..................................................16
3.10 Real Property Holding Corporation............................................16
3.11 Qualified Small Business Stock...............................................16
3.12 Termination Of Covenants.....................................................17
3.13 Visitation Rights............................................................17
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TABLE OF CONTENTS
(CONTINUED)
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SECTION 4 RIGHT TO MAINTAIN INTEREST...................................................17
4.1 Subsequent Offerings.........................................................17
4.2 Exercise Of Rights...........................................................18
4.3 Issuance Of Equity Securities To Other Persons...............................18
4.4 Termination Of Rights To Maintain Interest...................................18
4.5 Transfer Of Rights To Maintain Interest......................................18
4.6 Excluded Securities..........................................................18
SECTION 5 MISCELLANEOUS................................................................19
5.1 Governing Law................................................................19
5.2 Survival.....................................................................19
5.3 Successors and Assigns.......................................................19
5.4 Entire Agreement.............................................................20
5.5 Severability.................................................................20
5.6 Amendment and Waiver.........................................................20
5.7 Delays or Omissions..........................................................20
5.8 Notices......................................................................20
5.9 Attorneys' Fees..............................................................21
5.10 Titles and Subtitles.........................................................21
5.11 Counterparts.................................................................21
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INTERNAP NETWORK SERVICES CORPORATION
AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (the "Agreement") is entered into as of
the 28 day of January, 1999, by and among INTERNAP NETWORK SERVICES CORPORATION,
a Washington corporation (the "Company") and (i) the purchasers of the Company's
Series C Preferred Stock ("Series C Stock") set forth on Exhibit A of that
certain Series C Preferred Stock Purchase Agreement of even date herewith (the
"Purchase Agreement") and Exhibit A hereto, (ii) the holders of the Company's
Series B Preferred Stock ("Series B Stock"), and (iii) the individuals holding
the Company's common stock ("Common Stock") and Series A Preferred Stock
("Series A Stock") set forth on Exhibit B hereto (the "Founders"). The parties
described in clauses (ii) and (iii) shall be referred to hereinafter,
collectively, as the "Prior Shareholders." The purchasers of the Series C Stock
shall be referred to hereinafter as the "Investors" and each individually as an
"Investor."
RECITALS
WHEREAS, the Company has issued Series A Stock and Series B Stock and
has granted registration rights to the holders thereof pursuant to Section 2 of
that certain Investor Rights Agreement dated October 29, 1997, as amended on
December 29, 1997 and March 1, 1998 (the "Prior Agreement");
WHEREAS, the Company proposes to sell and issue up to twenty nine
million six hundred twenty-nine thousand six hundred thirty (29,629,630) shares
of its Series C Stock pursuant to the Purchase Agreement;
WHEREAS, as a condition of entering into the Purchase Agreement, the
Investors have requested that the Company extend to them registration rights,
information rights and other rights as set forth below; and
WHEREAS, the Company, the Founders and the undersigned holders of Series
B Stock desire to amend and restate the Prior Agreement and to accept the rights
and obligations created pursuant hereto which shall supersede the Prior
Agreement.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and in the Purchase Agreement, the parties mutually agree as follows:
SECTION 1 GENERAL
1.1 DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
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"FORM S-3" means such form under the Securities Act as in effect on the
date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
"FOUNDERS" means all holders of Common Stock and Series A Preferred
Stock as of the date of this agreement and their authorized transferees.
"FOUNDERS' STOCK" means all Common Stock and Series A Preferred Stock of
the Company held by the Founders, upon the Closing, and any Common Stock issued
or issuable with respect to such Common Stock upon any recapitalizations, stock
splits, stock dividends or similar distributions.
"HOLDER" means any holder of outstanding Registrable Securities that
have not been sold to the public, but only if such holder is an Investor or a
holder of Series B Stock (or, solely with regards to Sections 2.3, 2.5, 2.8(b),
2.9, 2.13 and 5.6(b), a Founder) or an assignee or transferee of registration
rights in accordance with Section 2.10 hereof.
"INITIATING HOLDERS" means Holders who in the aggregate hold at least
forty percent (40%) of the Registrable Securities.
"INITIAL OFFERING" means the Company's first firm commitment
underwritten public offering of its Common Stock registered under the Securities
Act.
"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 of effectiveness of such
registration statement or document.
"REGISTRABLE SECURITIES" means (a) Common Stock of the Company issued or
issuable upon conversion of the Shares; and (b) any Common Stock of the Company
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 above-described securities.
For purposes of the registration rights granted to holders of Company securities
pursuant to Section 2.3 hereof and for purposes of the obligations imposed upon
holders of Registrable Securities under Sections 2.9 and 2.13, but not for the
definition of Initiating Holders or for purposes of Section 5.6(a), "Registrable
Securities" shall include Founders' Stock. Notwithstanding the foregoing,
Registrable Securities shall not include any securities sold by a person to the
public either pursuant to a registration statement or Rule 144 or sold in a
private transaction in which the transferor's rights under Section 2 of this
Agreement are not assigned.
"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 pursuant to then exercisable or convertible
securities.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the Company
in complying with Sections 2.2, 2.3 and 2.4 hereof, including, without
limitation, all registration
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and filing fees, printing expenses, fees and disbursements of counsel for the
Company, reasonable fees and disbursements not to exceed Fifteen Thousand
Dollars ($15,000) 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).
"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 of Registrable Securities pursuant to this
Agreement, as well as fees and disbursements of legal counsel for the selling
Holders, except as to those included in Registration Expenses, as defined above.
"SHARES" shall mean (i) the Company's Series B Stock held by the Prior
Shareholders as of the date hereof listed on Exhibit B hereto and their
permitted assigns, and (ii) the Company's Series C Stock issued pursuant to the
Purchase Agreement and held by the Investors listed on Exhibit A hereto and
their permitted assigns.
SECTION 2 RESTRICTIONS ON TRANSFER; REGISTRATION
2.1 RESTRICTIONS ON TRANSFER
(a) Each Holder agrees not to make any disposition of all or any
portion of the Shares or Registrable Securities unless and until:
(i) There is then in effect a registration statement under
the Securities Act covering such proposed disposition and such disposition is
made in accordance with such registration statement; or
(ii) (A) The transferee has agreed in writing to be bound
by the terms of this Agreement, (B) such Holder shall have notified the Company
of the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (C) if
reasonably requested by the Company, such Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the
Securities Act. It is agreed that the Company will not require opinions of
counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
(iii) Notwithstanding the provisions of paragraphs (i) and
(ii) above, no such registration statement or opinion of counsel shall be
necessary for a transfer by a Holder which is (A) a partnership to its partners
or former partners in accordance with partnership interests, (B) a corporation
to its shareholders in accordance with their interest in the corporation, (C) a
limited liability company to its members or former members in accordance with
their interest in the limited liability company, (D) to the Holder's family
member or trust for the benefit of an individual Holder or (E) an "affiliate (as
defined in the Securities Act) of such Holder, provided that such affiliate is
an "accredited investor" (as defined in the Securities Act);
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provided that in each case the transferee will be subject to the terms of this
Agreement to the same extent as if he or she were an original Holder hereunder.
(b) Each certificate representing Shares or Registrable Securities
shall (unless otherwise permitted by the provisions of the Agreement) be stamped
or otherwise imprinted with a legend substantially similar to the following (in
addition to any legend required under applicable state securities laws or as
provided elsewhere in this Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS
AND UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
(c) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any holder thereof if the holder shall have
obtained an opinion of counsel (which counsel may be counsel to the Company)
reasonably acceptable to the Company to the effect that the securities proposed
to be disposed of may lawfully be so disposed of without registration,
qualification or legend.
(d) Any legend endorsed on an instrument pursuant to applicable
state securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.
2.2 DEMAND REGISTRATION
(a) Subject to the conditions of this Section 2.2, if the Company
shall receive a written request from the Initiating Holders that the Company
file a registration statement under the Securities Act covering the registration
of at least twenty-five percent (25%) of the Registrable Securities held by such
Initiating Holders and having an aggregate offering price to the public in
excess of five million dollars ($5,000,000) (a "Qualified Public Offering"),
then the Company shall, within thirty (30) days of the receipt thereof, give
written notice of such request to all Holders and, subject to the limitations of
this Section 2.2, use its best efforts to effect, as soon as practicable, the
registration under the Securities Act of all Registrable Securities that the
Holders request to be registered.
(b) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 2.2 or any request pursuant to Section 2.4 and the Company shall
include such information in the written notice referred to in Section 2.2(a) or
Section 2.4(a), as applicable. In such event, the right of any Holder to include
its 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
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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 underwriter or underwriters selected for such
underwriting by a majority in interest of the Initiating Holders (which
underwriter or underwriters shall be reasonably acceptable to the Company).
Notwithstanding any other provision of this Section 2.2 or Section 2.4, if the
underwriter advises the Company that marketing factors require a limitation of
the number of securities to be underwritten (including Registrable Securities)
then the Company shall so advise all Holders of Registrable Securities that
would otherwise be underwritten pursuant hereto, and the number of shares that
may be included in the underwriting shall be allocated to the Holders of such
Registrable Securities on a pro rata basis based on the number of Registrable
Securities held by all such Holders (including the Initiating Holders but not
including the Founders). Any Registrable Securities excluded or withdrawn from
such underwriting shall be withdrawn from the registration.
(c) The Company shall not be required to effect a registration
pursuant to this Section 2.2:
(i) prior to October 29, 2001;
(ii) after the Company has effected two (2) registrations
pursuant to this Section 2.2, and such registrations have been declared or
ordered effective;
(iii) during the period starting with the date of the
filing of, and ending on the date one hundred eighty (180) days following the
effective date of the registration statement pertaining to the Initial Offering;
provided that the Company makes reasonable good faith efforts to cause such
registration statement to become effective;
(iv) if within thirty (30) days of receipt of a written
request from Initiating Holders pursuant to Section 2.2(a), the Company gives
notice to the Holders of the Company's intention to make its Initial Offering
within ninety (90) days; or
(v) if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 2.2, a certificate signed by the
Chairman of the Board 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 shareholders for such registration statement to be effected at such time, in
which event the Company shall have the right to defer such filing for one period
of not more than ninety (90) days after receipt of the request of the Initiating
Holders; provided that such right to delay a request shall be exercised by the
Company not more than once in any twelve (12) month period.
2.3 PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of
Registrable Securities in writing at least thirty (30) days prior to the filing
of any registration statement under the Securities Act for purposes of 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 registration statements relating to employee benefit
plans or with respect to corporate reorganizations or other transactions under
Rule 145 of the Securities Act) and will afford each such Holder an opportunity
to include in such registration statement all or
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part of such Registrable Securities held by such Holder; provided, however, that
no Holder shall be eligible to so participate in such registration if such
Holder could have sold such Registrable Securities on an unrestricted basis
pursuant to Rule 144 of the Securities Act during the four-week period
immediately preceding the effectiveness of such registration; provided further,
that such participation right shall not be granted to any Holders following the
fifth anniversary of the closing of the Initial Offering. Each Holder desiring
to include in any such registration statement all or any part of the Registrable
Securities held by it shall, within fifteen (15) days after the above-described
notice from the Company, so notify the Company in writing. Such notice shall
state the intended method of disposition of the Registrable Securities by such
Holder. 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 the registration statement under which the
Company gives notice under this Section 2.3 is for an underwritten offering, the
Company shall so advise the Holders of Registrable Securities. In such event,
the right of any such Holder 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 underwriter or underwriters
selected for such underwriting by the Company. Notwithstanding any other
provision of the Agreement, if the underwriter determines in good faith that
marketing factors require a limitation of the number of shares to be
underwritten, the number of shares that may be included in the underwriting
shall be allocated, first, to the Company; second, to the Holders who are (x)
Investors, (y) holders of Series B Stock, and (z) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. on a pro
rata basis based on the total number of Registrable Securities held by such
Holders and ▇▇. ▇▇▇▇▇▇; third, to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.; fourth, to Holders who
are Founders (other than ▇▇. ▇▇▇▇▇▇) on a pro rata basis based on the total
number of Registrable Securities held by such Holders; and fifth, to any other
shareholders of the Company (other than a Holder) on a pro rata basis. No such
reduction shall (i) reduce the securities being offered by the Company for its
own account to be included in the registration and underwriting, or (ii) reduce
the amount of securities of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and the selling Holders who
are Investors or holders of Series B Stock to below twenty-five percent (25%) of
the total amount of securities to be included in such registration, unless such
offering is the Initial Offering and such registration does not include shares
of any other selling shareholders, in which event any or all of the Registrable
Securities of the Holders (including ▇▇. ▇▇▇▇▇▇) may be excluded in accordance
with the preceding sentence. In no event will shares of any other selling
shareholder be included in such registration which would reduce the number of
shares which may be included by Holders without the written consent of Holders
of not less than sixty-six and two-thirds percent (66 2/3%) of the Registrable
Securities proposed to be sold in the offering.
(b) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.3 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in
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such registration. The Registration Expenses of such withdrawn registration
shall be borne by the Company in accordance with Section 2.5 hereof.
2.4 FORM S-3 REGISTRATION. In case the Company shall receive from any
Holder or Holders of at least fifteen percent (15%) of the Registrable
Securities a written request or requests that the Company effect a registration
on Form S-3 (or any successor to Form S-3) or any similar short-form
registration statement and any related qualification or compliance with respect
to all or a part of the Registrable Securities owned by such Holder or Holders,
the Company will:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders of Registrable
Securities; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 2.4:
(i) if Form S-3 (or any successor or similar form) is not
available for such offering by the Holders;
(ii) if the Holders, together with the holders of any
other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public, net of underwriting costs, of less than five
hundred thousand dollars ($500,000);
(iii) if the Company shall furnish to the Holders a
certificate signed by the Chairman of the Board of Directors 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 shareholders
for such Form S-3 Registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the Form S-3 registration
statement for one period of not more than ninety (90) days after receipt of the
request of the Holder or Holders under this Section 2.4; provided, that such
right to delay a request shall be exercised by the Company not more than once in
any twelve (12) month period;
(iv) if the Company has, within the six (6) month period
preceding the date of such request, already effected one (1) registration on
Form S-3 for the Holders pursuant to this Section 2.4; or
(v) in any particular jurisdiction in which the Company
would be required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or compliance.
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(c) Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. Subject to Section 2.5 below, all Selling
Expenses incurred in connection with registrations requested pursuant to this
Section 2.4 shall be paid by the selling Holders pro rata in proportion to the
number of shares sold by each, and by the Company, if it participates in such
registration, pro rata in proportion to the number of shares sold by it.
2.5 EXPENSES OF REGISTRATION. Except as specifically provided herein,
all Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2.2 or any registration under
Section 2.3 or Section 2.4 herein shall be borne by the Company. All Selling
Expenses incurred in connection with any registrations under those sections,
shall be borne by the holders of the securities so registered pro rata on the
basis of the number of shares so registered. The Company shall not, however, be
required to pay for expenses of any registration proceeding begun pursuant to
Section 2.2 or 2.4, the request of which has been subsequently withdrawn by the
Holders requesting such registration unless (a) the withdrawal is based upon
material adverse information concerning the Company of which the Holders
requesting such registration were not aware at the time of such request or (b)
the Holders of a majority of Registrable Securities agree to forfeit their right
to one requested registration pursuant to Section 2.2 or Section 2.4, as
applicable, in which event such right shall be forfeited by all Holders. If the
Holders are required to pay the Registration Expenses, such expenses shall be
borne by the holders of securities (including Registrable Securities) requesting
such registration in proportion to the number of shares for which registration
was requested. If the Company is required to pay the Registration Expenses of a
withdrawn offering pursuant to clause (a) above, then the Holders shall not
forfeit their rights pursuant to Section 2.2 or Section 2.4 to a demand
registration.
2.6 OBLIGATIONS OF THE COMPANY. Whenever required 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 all reasonable 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 up to ninety (90) days or, if earlier,
until the Holder or Holders have completed the distribution related thereto.
(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 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.
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(d) Use all 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 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(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) 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 not misleading in the light of the circumstances then
existing.
(g) Furnish, at the request of a majority of the Holders
participating in the registration, on the date that such Registrable Securities
are delivered to the underwriters for sale, if such securities are being sold
through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (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 and reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities 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 and
reasonably satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and if permitted by
applicable accounting standards, to the Holders requesting registration of
Registrable Securities.
2.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Section 2 shall terminate and be of no further force and effect five
(5) years after the date of the Company's Initial Offering. In addition, a
Holder's registration rights shall expire if (a) the Company has completed its
Initial Offering and is subject to the provisions of the Exchange Act, (b) such
Holder (together with its affiliates, partners and former partners) holds less
than one percent (1%) of the Company's outstanding Common Stock (treating all
share of convertible Preferred Stock on an as converted basis) and (c) all
Registrable Securities held by and issuable to such Holder (and its affiliates,
partners and former partners) may be sold under Rule 144 during any ninety (90)
day period.
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2.8 DELAY OF REGISTRATION; FURNISHING INFORMATION
(a) No Holder shall have any right to obtain 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.
(b) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 2.2, 2.3 or 2.4 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 effect the registration of their
Registrable Securities.
(c) The Company shall have no obligation with respect to any
registration requested pursuant to Section 2.2 or Section 2.4 if, due to the
operation of subsection 2.2(b), the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's obligation
to initiate such registration as specified in Section 2.2 or Section 2.4,
whichever is applicable.
2.9 INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 2.2, 2.3 or 2.4:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the partners, officers, directors and legal
counsel 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 Exchange Act, 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
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 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 reimburse each such Holder, partner, officer, director, legal
counsel, underwriter or controlling person for 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 2.9(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
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information furnished expressly for use in connection with such registration by
such Holder, partner, officer, director, legal counsel, underwriter or
controlling person of such Holder.
(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, each of its directors, officers and
legal counsel, and 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, 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, or partner, director, officer or controlling person of such other
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 under an instrument duly executed by such Holder and stated to be
specifically 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, legal counsel, controlling person, underwriter or
other Holder, or partner, officer, director, legal counsel or controlling person
of such 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 2.9(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 2.9 exceed the proceeds from the offering received by such
Holder.
(c) Promptly after receipt by an indemnified party under this
Section 2.9 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 2.9, 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, 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 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 2.9, 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 2.9.
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(d) If the indemnification provided for in this Section 2.9 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, that in no event shall any contribution by a
Holder hereunder exceed the proceeds from the offering received by such Holder.
(e) The obligations of the Company and Holders under this Section
2.9 shall survive completion of any offering of Registrable Securities in a
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.
2.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company
to register Registrable Securities pursuant to this Section 2 may be assigned by
a Holder to a transferee or assignee of Registrable Securities which (a)
previously holds Registrable Securities, (b) is a subsidiary, parent, general
partner, limited partner or retired partner of a Holder, or is a Holder's family
member or trust for the benefit of an individual Holder or (c) acquires at least
Seventy-Five Thousand (75,000) shares of 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 and (ii) such
transferee shall agree to be subject to all restrictions set forth in this
Agreement.
2.11 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 sixty-six and
two-thirds percent (66 2/3%) of the Registrable Securities then outstanding. Any
amendment or waiver effected in accordance with this Section 2.11 shall be
binding upon each Holder and the Company. By acceptance of any benefits under
this Article 2, Holders of Registrable Securities hereby agree to be bound by
the provisions hereunder.
2.12 LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. After the date of
this Agreement, the Company shall not, without the prior written consent of the
Holders of sixty-six and two-thirds percent (66 2/3%) of the Registrable
Securities then outstanding, enter into any agreement with any holder or
prospective holder of any securities of the Company that would
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allow such holder or prospective holder in any registration filed under this
Section 2, unless under the terms of such agreement, such holder or prospective
holder may include such securities only to the extent that the inclusion of its
securities will not reduce the amount of Registrable Securities of the Holders
which is included.
2.13 "MARKET STAND-OFF" AGREEMENT. Each Holder hereby agrees that such
Holder shall not sell or otherwise transfer or dispose of any Common Stock (or
other securities) of the Company held by such Holder (other than those included
in the registration) for a period specified by the representative of the
underwriters of Common Stock (or other securities) of the Company not to exceed
one hundred eighty (180) days following the effective date of a registration
statement of the Company filed under the Securities Act, provided that all
officers, directors and affiliates of the Company and holders of at least two
percent (2%) of the Company's voting securities enter into similar agreements.
Each Holder agrees to execute and deliver such other agreements as may
be reasonably requested by the Company or the underwriter which are consistent
with the foregoing or which are necessary to give further effect thereto. In
addition, if requested by the Company or the representative of the underwriters
of Common Stock (or other securities) of the Company, each Holder shall provide,
within ten (10) days of such request, such information as may be required by the
Company or such representative in connection with the completion of any public
offering of the Company's securities pursuant to a registration statement filed
under the Securities Act. The obligations described in this Section 2.13 shall
not apply to a registration relating solely to employee benefit plans on Form
S-1 or Form S-8 or similar forms that may be promulgated in the future, or a
registration relating solely to a Commission Rule 145 transaction on Form S-4 or
similar forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of said one
hundred eighty (180) day period.
2.14 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 best 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 with the reporting requirements 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; 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.
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2.15 REGISTRATION RIGHTS UNDER PRIOR AGREEMENT. The registration rights
contained in this Agreement set forth the sole and entire agreement among the
Company and the Prior Shareholders on the subject matter hereof and supersede
any and all rights granted and covenants made under the Prior Agreement (and the
undersigned parties to the Prior Agreement hereby amend such agreements such
that the registration rights provided for herein shall apply to all parties
under the Prior Agreement).
SECTION 3 COVENANTS OF THE COMPANY
3.1 BASIC FINANCIAL INFORMATION AND REPORTING
(a) The Company will maintain true books and records of account
in which full and correct entries will be made of all its business transactions
pursuant to a system of accounting established and administered in accordance
with generally accepted accounting principles consistently applied, and will set
aside on its books all such proper accruals and reserves as shall be required
under generally accepted accounting principles consistently applied.
(b) As soon as practicable after the end of each fiscal year of
the Company, and in any event within one hundred twenty (120) days thereafter,
the Company will furnish each Investor and holder of Series B Stock a
consolidated balance sheet of the Company, as at the end of such fiscal year,
and a consolidated statement of income and a consolidated statement of cash
flows of the Company, for such year, all prepared in accordance with generally
accepted accounting principles consistently applied and setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail. Such financial statements shall be accompanied by a report
and opinion thereon by independent public accountants of national standing
selected by the Company's Board of Directors.
(c) The Company will furnish each Investor and holder of Series B
Stock, as soon as practicable after the end of the first, second and third
quarterly accounting periods in each fiscal year of the Company, and in any
event within forty-five (45) days thereafter, a consolidated balance sheet of
the Company as of the end of each such quarterly period, and a consolidated
statement of income and a consolidated statement of cash flows of the Company
for such period and for the current fiscal year to date, prepared in accordance
with generally accepted accounting principles, with the exception that no notes
need be attached to such statements and year-end audit adjustments may not have
been made.
(d) So long as an Investor or holder of Series B Stock (with its
affiliates) shall own at least Four Hundred Thousand (400,000) shares of
Registrable Securities (as adjusted for stock splits and combinations) (each, a
"Major Investor), the Company will furnish each such Major Investor (i) at least
thirty (30) days prior to the beginning of each fiscal year, an annual budget
and operating plans for such fiscal year (broken down by month) (and as soon as
available, any subsequent revisions thereto); and (ii) as soon as practicable
after the end of each month, and in any event within forty-five (45) days
thereafter, a consolidated balance sheet as of the end of each such month, and a
consolidated statement of income and a consolidated statement of cash flows of
the Company for such month and for the current fiscal year to date, including a
comparison to plan figures for such period, prepared in accordance with
generally
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accepted accounting principles consistently applied, with the exception that no
notes need be attached to such statements and year-end audit adjustments may not
have been made.
3.2 INSPECTION RIGHTS. Each Investor and holder of Series B Stock shall
have the right to visit and inspect any of the properties of the Company or any
of its subsidiaries, and to discuss the affairs, finances and accounts of the
Company or any of its subsidiaries with its officers, and to review such
information as is reasonably requested all at such reasonable times and as often
as may be reasonably requested; provided, however, that the Company shall not be
obligated to disclose information about the Company to a competitor of the
Company.
3.3 CONFIDENTIALITY OF RECORDS. Each Investor and holder of Series B
Stock agrees to use, and to use its best efforts to insure that its authorized
representatives use, the same degree of care as such Investor and holder of
Series B Stock uses to protect its own confidential information to keep
confidential any information furnished to it which the Company identifies as
being confidential or proprietary (so long as such information is not in the
public domain), except that such Investor and holder of Series B Stock may
disclose such proprietary or confidential information to any partner, subsidiary
or parent of such Investor and holder of Series B Stock for the purpose of
evaluating its investment in the Company as long as such partner, subsidiary or
parent is advised of the confidentiality provisions of this Section 3.3.
3.4 RESERVATION OF COMMON STOCK. The Company will at all times reserve
and keep available, solely for issuance and delivery upon the conversion of the
Preferred Stock, all Common Stock issuable from time to time upon such
conversion.
3.5 STOCK VESTING. Unless otherwise approved by the Board of Directors,
all stock options and other stock equivalents issued after the date of this
Agreement to employees, directors, consultants and other service providers shall
be subject to vesting as follows: (a) twenty-five percent (25%) of such stock
shall vest at the end of the first year following the earlier of the date of
issuance or such person's services commencement date with the company, and (b)
seventy-five percent (75%) of such stock shall vest in equal monthly increments
over the remaining three (3) years. With respect to any shares of stock
purchased by any such person, the Company's repurchase option shall provide that
upon such person's termination of employment or service with the Company, with
or without cause, the Company or its assignee (to the extent permissible under
applicable securities laws and other laws) shall have the option to purchase at
cost any unvested shares of stock held by such person.
3.6 BOARD ELECTION RIGHTS. For so long as H&Q InterNAP Investors, LP and
TI Ventures, LP ("H&Q") collectively hold at least one million (1,000,000)
shares of Registrable Securities, H&Q shall have the right to designate one (1)
nominee to be elected to the Board of Directors at each election of directors.
For so long as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Partners ("MSVP") holds at least one
million (1,000,000) shares of Registrable Securities, MSVP shall have the right
to designate one (1) nominee to be elected to the Board of Directors at each
election of directors.
3.7 EMPLOYEE CONFIDENTIALITY, NONRAIDING AND NONCOMPETITION AGREEMENT.
The Company shall require all employees and consultants to execute and deliver
an Employee Confidentiality, Nonraiding and Noncompetition Agreement and an
Employee Inventions
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Agreement in the forms attached as Exhibit F-1 and F-2, respectively, to the
Purchase Agreement or Proprietary Information and Inventions Agreement.
3.8 DIRECTORS' LIABILITY AND INDEMNIFICATION. The Company's Articles of
Incorporation and Bylaws shall provide (a) for elimination of the liability of
director to the maximum extent permitted by law and (b) for indemnification of
directors for acts on behalf of the Company to the maximum extent permitted by
law.
3.9 BOARD OF DIRECTORS APPROVAL. The Company shall not, without the
approval of a majority of the Board of Directors, with all directors voting,
take any of the following actions:
(a) incur any debt or obligation, including capital lease or
purchase obligations, in excess of two hundred fifty thousand dollars
($250,000);
(b) initiate or establish any compensation program or plan,
including any program or plan concerning the base salary or bonus of officers;
(c) establish any stock option plans or programs or award any
stock options pursuant to such programs or plans;
(d) hire or appoint any officers of the Company;
(e) enter into any agreement for the purchase or lease of any
real estate; or
(f) implement or revise any annual budget or other operating
plan.
3.10 REAL PROPERTY HOLDING CORPORATION. The Company covenants that it
will operate in a manner such that it will not become a "United States real
property holding corporation" ("USRPHC") as that term is defined in Section
897(c)(2) of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder (the "Code"). The Company agrees to make determinations as to its
status as a USRPHC, and will file statements concerning those determinations
with the Internal Revenue Service, in the manner and at the times required under
Reg. Section 1.897-2(h), or any supplementary or successor provision thereto.
Within thirty (30) days of a request from an Investor or any of its partners,
the Company will inform the requesting party, in the manner set forth in Reg.
Section 1.897- 2(h)(1)(iv) or any supplementary or successor provision thereto,
whether that party's interest in the Company constitutes a United States real
property interest (within the meaning of Section 897(c)(1) of the Code and the
regulations thereunder) and whether the Company has provided to the Internal
Revenue Service all required notices as to its USRPHC status.
3.11 QUALIFIED SMALL BUSINESS STOCK. The Company covenants that so long
as any of the shares of Series C Preferred Stock, or the Common Stock into which
such shares are converted, are held by an Investor (or authorized transferee in
whose hands such shares or Common Stock are eligible to qualify as Qualified
Small Business Stock as defined in Section 1202(c) of the Code), it will use
commercially reasonable efforts (including complying with any applicable filing
or reporting requirements imposed by the Code on issuers of Qualified Small
Business Stock) to cause such shares of Series C Preferred Stock, or the Common
Stock into which they are converted, to qualify as Qualified Small Business
Stock; provided, however,
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that "commercially reasonable efforts" as used in this Section 3.29 shall not be
construed to require the Company to operate its business in a manner that would
adversely affect its business, limit its future prospects or alter the timing or
resource allocation related to its planned operations or financing activities.
3.12 TERMINATION OF COVENANTS. All covenants of the Company contained in
this Section 3 of this Agreement shall expire and terminate as to each Investor
and holder of Series B Stock upon the earlier of (i) the effective date of the
registration statement pertaining to the Initial Offering or (ii) upon (a) the
sale, lease or other disposition of all or substantially all of 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%) of the voting power of the corporation or other entity surviving
such transaction, provided that this Section 3.11(ii)(b) shall not apply to a
merger effected exclusively for the purpose of changing the domicile of the
Company (a "Change in Control").
3.13 VISITATION RIGHTS. So long as Fidelity Investors II Limited
Partnership and FTT Ventures Inc. or their affiliates (collectively, "Fidelity")
shall own 666,667 shares of Series C Preferred Stock, the Company shall allow
one representative designated by Fidelity to attend all meetings of the
Company's Board of Directors in a nonvoting capacity, and in connection
therewith, the Company shall give such representative copies of all notices,
minutes, consents and other materials, financial or otherwise, which the Company
provides to its Board of Directors; provided, however, that the Company reserves
the right to exclude such representative from access to any material or meeting
or portion thereof if the Company believes upon advice of counsel that such
exclusion is reasonably necessary to preserve the attorney-client privilege, to
protect highly confidential proprietary information or for other similar
reasons.
SECTION 4 RIGHT TO MAINTAIN INTEREST
4.1 SUBSEQUENT OFFERINGS. Each Investor and holder of Series B Stock
shall have a right to purchase its Pro Rata Share (as defined herein) of all
Equity Securities, as defined below, that the Company may, from time to time,
propose to sell and issue after the date of this Agreement, other than the
Equity Securities excluded by Section 4.6 hereof. The Company may, at its
election, sell such Investor and holder of Series B Stock its Pro Rata Amount of
Equity Securities at the initial closing of the sale of Equity Securities or at
a subsequent closing of which shall take place within ninety (90) days of the
initial closing. The Pro Rata Share of an Investor and holder of Series B Stock
shall be equal to the ratio of (a) the number of shares of the Company's Common
Stock (including all shares of Common Stock issued or issuable upon conversion
of the Preferred Stock) which such Investor and holder of Series B Stock is
deemed to hold immediately prior to the issuance of such Equity Securities to
(b) the total number of shares of the Company's outstanding Common Stock
(including all shares of Common Stock issued or issuable upon conversion of the
Preferred Stock) immediately prior to the issuance of the Equity Securities. The
term "Equity Securities" shall mean (i) any Common Stock, Preferred Stock or
other security of the Company, (ii) any security convertible, with or without
consideration, into any Common Stock, Preferred Stock or other security
(including any option to purchase such a convertible security), (iii) any
security carrying any warrant or right to
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subscribe to or purchase any Common Stock, Preferred Stock or other security or
(iv) any such warrant or right.
4.2 EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it shall give each Investor and holder of Series B Stock written
notice before such issuance or within ten (10) days thereafter, describing the
type of Equity Securities, the price and number of shares and the general terms
and conditions upon which the Company proposes to issue or has issued the same.
Each Investor and holder of Series B Stock shall have thirty (30) days from the
giving of such notice to agree to purchase up to the amount of Equity Securities
equal to Pro Rata Share of such Equity Securities of the Investor and holder of
Series B Stock for the price and upon the general terms and conditions specified
in the notice by giving written notice to the Company and stating therein the
quantity of Equity Securities to be purchased. Any such purchase shall occur at
the initial closing of the sale of Equity Securities or, at the Company's
election, at a subsequent closing within ninety (90) days of the initial
closing. Notwithstanding the foregoing, the Company shall not be required to
offer or sell such Equity Securities to any Investor and holder of Series B
Stock who would cause the Company to be in violation of applicable federal
securities laws by virtue of such offer or sale.
4.3 ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If not all of the
Investors and holders of Series B Stock elect to purchase their Pro Rata Share
of the Equity Securities, then the Company shall promptly notify in writing the
Investors and holders of Series B Stock who do so elect and shall offer such
Investors and holders of Series B Stock the right to acquire such unsubscribed
shares. Each Investor and holder of Series B Stock shall have fifteen (15) days
after receipt of such notice to notify the Company of its election to purchase
all or a portion thereof of the unsubscribed shares. If the Investors and
holders of Series B Stock fail to exercise in full the right to maintain
interest within said forty-five (45) day period set forth in Section 4.2 and
4.3, the Company shall have ninety (90) days thereafter to sell the Equity
Securities in respect of which the rights of the Investors and holders of Series
B Stock were not exercised, at a price and upon general terms and conditions no
more favorable to the purchasers thereof than specified in the Company's notice
to the Investors and holders of Series B Stock pursuant to Section 4.2 hereof.
If the Company has not sold such Equity Securities within ninety (90) days of
the notice provided pursuant to Section 4.2, the Company shall not thereafter
issue or sell any Equity Securities without first offering such securities to
the Investors and holders of Series B Stock in the manner provided above.
4.4 TERMINATION OF RIGHTS TO MAINTAIN INTEREST. The rights to maintain
interest established by this Section 4 shall not apply to, and shall terminate
upon (i) the effective date of the registration statement pertaining to the
Initial Offering or (ii) a Change in Control.
4.5 TRANSFER OF RIGHTS TO MAINTAIN INTEREST. The rights to maintain
interest of each Investor and holder of Series B Stock under this Section 4 may
be transferred to the same parties, subject to the same restrictions as any
transfer of registration rights pursuant to Section 2.10.
4.6 EXCLUDED SECURITIES. The rights to maintain interest established by
this Section 4 shall have no application to any of the following Equity
Securities:
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(a) shares of Common Stock (and/or options, warrants or other
Common Stock purchase rights issued pursuant to such options, warrants or other
rights) issued or to be issued to employees, officers or directors of, or
consultants or advisors to the Company or any subsidiary, pursuant to stock
purchase or stock option plans or other arrangements that are approved by a
majority of the entire Board of Directors;
(b) stock issued pursuant to any rights or agreements outstanding
as of the date of this Agreement, options and warrants outstanding as of the
date of this Agreement; and stock issued pursuant to any such rights or
agreements granted after the date of this Agreement, provided that the rights to
maintain interest established by this Section 4 applied with respect to the
initial sale or grant by the Company of such rights or agreements;
(c) capital stock or warrants or options to purchase capital
stock issued in connection with bona fide acquisitions, mergers or similar
transactions, the terms of which are approved by a majority of the entire Board
of Directors of the Corporation;
(d) shares of Common Stock issued in connection with any stock
split, stock dividend or recapitalization by the Company;
(e) shares of Common Stock issued upon conversion of the Shares;
(f) capital stock, or options or warrants to purchase capital
stock, issued to financial institutions or lessors in connection with commercial
credit arrangements, equipment financings or any similar transactions approved
by a majority of the entire Board of Directors; and
(g) shares of Common Stock issued in a public offering prior to
or in connection with which all outstanding shares of Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock will be converted to
Common Stock.
SECTION 5 MISCELLANEOUS
5.1 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Washington as applied to agreements among
Washington residents entered into and to be performed entirely within
Washington.
5.2 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. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.
5.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Registrable Securities from time to time;
provided, however, that prior to the receipt by the Company of adequate written
notice of the
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transfer of any Registrable Securities specifying the full name and address of
the transferee, the Company may deem and treat the person listed as the holder
of such shares in its records as the absolute owner and holder of such shares
for all purposes, including the payment of dividends or any redemption price.
5.4 ENTIRE AGREEMENT. This Agreement, the Exhibits and Schedules hereto,
the Purchase Agreement and the other documents delivered pursuant thereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
5.5 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.
5.6 AMENDMENT AND WAIVER
(a) Except as otherwise expressly provided and subject to Section
5.6(b) below, this Agreement may be amended or modified only upon the written
consent of the Company and the Holders of at least sixty-six and two-thirds
percent (66 2/3%) of the Registrable Securities.
(b) Except as otherwise expressly provided, no amendment or
modification of this Agreement shall adversely affect the rights of the Holders
under this Agreement without the written consent of the Holders of at least
sixty-six and two-thirds percent (66 2/3%) of the Registrable Securities.
(c) Notwithstanding the foregoing, this Agreement may be amended
with only the written consent of the Company to include additional purchasers of
Shares as "Investors," "Holders" and parties hereto.
5.7 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 of the Company under this Agreement shall impair any
such right, power or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent or approval of any kind or character on
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law or otherwise afforded to Holders, shall be cumulative and not
alternative.
5.8 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed facsimile if sent during normal
business hours of the recipient; if not, then on the next business day, (c) five
(5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All
20
24
communications shall be sent to the party to be notified at the address as set
forth on the signature pages hereof or Exhibit A or Exhibit B hereto or at such
other address as such party may designate by ten (10) days advance written
notice to the other parties hereto.
5.9 ATTORNEYS' FEES. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
5.10 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.
5.11 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.
21
25
IN WITNESS WHEREOF, the parties hereto have executed this Investor
Rights Agreement as of the date set forth in the first paragraph hereof.
COMPANY:
INTERNAP NETWORK SERVICES CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Vice President, Finance & Admin.
---------------------------------
26
INVESTORS:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ VENTURE PARTNERS III, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Partners III, L.L.C.
Its:General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital III, Inc.
Its: Institutional Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ VENTURE INVESTORS III, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Partners III, L.L.C.
Its:General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital III, Inc.
Its: Institutional Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
THE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ VENTURE PARTNERS ENTREPRENEUR
FUND, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Partners III, L.L.C.
Its:General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital III, Inc.
Its: Institutional Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
27
OAK INVESTMENT PARTNERS VIII, LIMITED PARTNERSHIP
By: Oak Associates VIII, LLC
Its:General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Managing Member
OAK VIII AFFILIATE FUND, LIMITED PARTNERSHIP
By: Oak VIII Affiliates, LLC
Its:General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Managing Member
FIDELITY INVESTORS II LIMITED PARTNERSHIP
By: Fidelity Investors Management, LLC
Its:General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: VP & Treasurer
-------------------------------------
FTT VENTURES LIMITED
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
-------------------------------------
28
GC&H INVESTMENTS
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Title: Executive Partner
-------------------------------------
25
29
KIRLAN VENTURE CAPITAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Title: President
-------------------------------------
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
30
SERIES B PREFERRED SHAREHOLDERS:
PS CAPITAL VENTURES, L.P.
By: PS Capital, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
PS CAPITAL VENTURES, L.P.
By: PS Capital, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ AND
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇, AS JOINT TENANTS
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:
----------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇
31
THE ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ REVOCABLE LIVING TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Title: Trustee
-------------------------------------
THE ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ CHARITABLE REMAINDER TRUST
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ AND ▇▇▇▇▇ ▇▇▇▇ TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Title:
-------------------------------------
/s/ ▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇
32
H&Q INTERNAP INVESTORS, LP
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: Attorney-in-Fact
-------------------------------------
TI VENTURES, LP
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
------------------------------------------
Title: Attorney-in-Fact
-----------------------------------------
KIRLAN I
By: Kirlan Venture Capital, Inc.
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Title: President of Kirlan Venture Capital, Inc.
------------------------------------------
KIRLAN VENTURE PARTNERS II, L.P.
By: Kirlan Venture Capital, Inc.
Its:
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
33
VULCAN VENTURES INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Title: Vice President
-------------------------------------
▇▇▇▇▇▇▇ INVESTORS, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Title: Managing Member
-------------------------------------
GAK LIMITED
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Title: General Partner
-------------------------------------
DOLL TECHNOLOGY AFFILIATES FUND, LP
By: Doll Technology Investment
Management, L.L.C.
its General Partner
By: /s/ ▇▇▇▇▇ R. DOLL
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Title: Managing Member
-------------------------------------
DOLL TECHNOLOGY AFFILIATES FUND, LP
By: Doll Technology Investment
Management, L.L.C.
its General Partner
By: /s/ ▇▇▇▇▇ R. DOLL
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Title: Managing Member
-------------------------------------
34
DOLL TECHNOLOGY SIDE FUND, LP
By: Doll Technology Investment
Management, L.L.C.
General Partner
By: /s/ ▇▇▇▇▇ R. DOLL
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Title: Managing Member
-------------------------------------
BRINC LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Title: Member
-------------------------------------
▇▇▇▇▇▇▇▇▇ FAMILY TRUST
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. AND ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
TRUSTEES
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: Trustee
-------------------------------------
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: Trustee
-------------------------------------
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
35
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ DUN
-------------------------------------------
▇▇▇▇▇▇▇▇▇ DUN
/s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇ MELLEA
-------------------------------------------
▇▇▇▇ ▇▇▇▇▇ MELLEA
36
SERIES A PREFERRED SHAREHOLDERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, CUSTODIAN FBO ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ UTMA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Title: Custodian
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, CUSTODIAN FBO ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ UTMA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Title: Custodian
-------------------------------------
37
COMMON STOCK SHAREHOLDERS:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ OPHIR RONEN
-------------------------------------------
OPHIR RONEN
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇ ▇▇▇▇
-------------------------------------------
▇▇▇ ▇▇▇▇
38
FOUNDERS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
39
Exhibit A
INVESTORS
40
Exhibit B
PRIOR SHAREHOLDERS
SERIES B PREFERRED SHAREHOLDERS
H&Q InterNAP Partners, LP
TI Ventures, ▇▇
▇▇▇▇▇▇ I
▇▇▇▇▇▇ Venture Partners II, L.P.
PS Capital Holdings, L.P.
Vulcan Ventures Incorporated
▇▇▇▇▇▇▇ Investors, LLC
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
GAK Limited
The ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Revocable Living Trust
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Charitable Remainder Trust
▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ Trust
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇
Doll Technology Investment Fund
BRINC LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Doll Technology Affiliates Fund, LP
Doll Technology Side Fund, ▇▇
▇▇▇▇▇▇▇▇▇ Family Trust, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Trustees
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
41
SERIES A PREFERRED SHAREHOLDERS
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Custodian FBO ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, UTMA
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Custodian FBO ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, UTMA
COMMON STOCK SHAREHOLDERS
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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FOUNDERS
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