Exhibit 10.1
INPHONIC, INC.
FIFTH AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
This Fifth Amended and Restated Investor Rights Agreement (the "Agreement") is
entered into as of the 19/th/ day of July, 2002, by and among InPhonic, Inc., a
Delaware corporation (the "Company"), the persons and entities listed on Exhibit
A hereto (each a "Series A Investor" and collectively, the "Series A
Investors"), the persons and entities listed on Exhibit B hereto (each a "Series
B Investor" and collectively, the "Series B Investors"), the persons and
entities listed on Exhibit C hereto (each a "Series C Investor" and
collectively, the "Series C Investors"), the persons and entities listed on
Exhibit D hereto (each a "Series D Investor" and collectively, the "Series D
Investors"), the persons and entities listed on Exhibit E hereto (each a "Series
D-1 Investor" and collectively, the "Series D-1 Investors)", the persons and
entities listed on Exhibit F hereto (each a "Series D-2 Investor" and
collectively the "Series D-2 Investors"), the persons and entities listed on
Exhibit G hereto (each a "Series D-3 Investor" and collectively the "Series D-3
Investors"), the persons and entities listed on Exhibit H hereto (each a "Key
Holder" and collectively, the "Key Holders"), the entity listed on Exhibit I
hereto (the "Special Holder"), the persons and entities listed on Exhibit J
hereto (in their capacity as owners of shares of Series D-4 Convertible
Preferred Stock, par value $0.01 per share (the "Series D-4 Stock") of the
Company and shares of Common Stock issued or issuable upon conversion of the
Series D-4 Stock) (each a Series D-4 Investor" and collectively, the "Series D-4
Investors"), Spring Capital Partners, L.P., a Maryland limited partnership
("SC"), Argosy Investment Partners II, L.P., a Pennsylvania limited partnership
("AC") and Comerica Bank California, a California banking corporation
("Comerica"). The (a) Series A Investors, (b) Series B Investors, (c) Series C
Investors, (d) Series D Investors, (e) Series D-1 Investors and (f) SC and AC
(solely with respect to Sections 2, 4 and 5 below with regard to any warrants
exercisable for shares of the Common Stock, par value $0.01 per share (the
"Common Stock") held now or in the future by each of SC and AC), are each
referred to as an "Investor" and collectively referred to herein as the
"Investors."
Recitals
Whereas, the Series A Investors have purchased shares of the Company's Series A
Convertible Preferred Stock, par value $0.01 per share (the "Series A Stock"),
pursuant to that certain Series A Convertible Preferred Stock Purchase
Agreement, dated as of January 7, 2000, by and among the Company and the Series
A Investors;
Whereas, the Series B Investors have purchased shares of the Company's Series B
Convertible Preferred Stock, par value $0.01 per share (the "Series B Stock"),
pursuant to that certain Series B Convertible Preferred Stock Purchase Agreement
dated as of February 7, 2000, by and among the Company and the Series B
Investors;
Whereas, the Series C Investors have purchased shares of the Company's Series C
Convertible Preferred Stock, par value $0.01 per share (the "Series C Stock"),
pursuant to that certain Series C Convertible Preferred Stock Purchase Agreement
dated as of October 13, 2000, by and among the Company and the Series C
Investors;
Whereas, pursuant to that certain Series D Convertible Preferred Stock Purchase
Agreement dated as of August 7, 2001, the Series D Investors acquired an
aggregate of 6,533,122 shares of the Company's Series D Convertible Preferred
Stock, par value $0.01 per share (the "Series D Stock");
Whereas, in accordance with that certain Exchange of Equity Agreement (the
"Exchange Agreement") dated as of October 11, 2001 by and among certain of the
Series D Investors and the Company, certain of the Series D Investors (the
"Exchanging Investors") exchanged an aggregate of 3,306,697 shares of Series D
Stock for an equal number of shares of Series D-1 Convertible Preferred Stock,
par value $0.01 per share (the "Series D-1 Stock");
Whereas, the Series D-1 Investors have purchased shares of Series D-1
Convertible Preferred Stock, par value $0.01 per share (the "Series D-1 Stock"),
pursuant to that certain Series D-1 Convertible Preferred Stock Purchase
Agreement dated as of October 11, 2001, by and among the Company and the Series
D-1 Investors;
Whereas, the Series D-2 Investors have purchased shares of Series D-2
Convertible Preferred Stock, par value $0.01 per share (the "Series D-2 Stock"),
pursuant to that certain Series D-2 Convertible Preferred Stock Purchase
Agreement dated as of December 3, 2001, by and among the Company and the Series
D-2 Investors;
Whereas, pursuant to that certain Investment Agreement dated September 13, 2001,
as may be amended from time to time, SC and AC have been issued and may be
issued in the future, warrants to purchase shares of the Common Stock;
Whereas, the Company expects to enter into an Amended and Restated Investment
Agreement in July 2002 pursuant to which SC and AC will be issued additional
warrants to purchase shares of the Common Stock;
Whereas, the Company and Comerica entered into a Second Amended and Restated
Loan and Security Agreement dated February __, 2002 pursuant to which the
Company issued to Comerica warrants to purchase shares of the Common Stock;
Whereas, the Series D-3 Investors have purchased or been issued shares of Series
D-3 Convertible Preferred Stock, par value $0.01 per share (the "Series D-3
Stock"), pursuant to (a) that certain Series D-3 Convertible Preferred Stock
Purchase Agreement dated as of January 30, 2002, by and among the Company and
certain of the Series D-3 Investors (the "Series D-3 Stock Purchase Agreement")
and (b) that certain Asset Purchase Agreement dated January 3, 2002 by and
between the Company and the Special Holder (the "Asset Purchase Agreement");
Whereas, pursuant to the Asset Purchase Agreement, the Company has issued to
Special Holder 2,724,495 shares of Common Stock, of which 681,907 are designated
in the Asset Purchase Agreement and referred to herein as the "Special Common
Stock";
Whereas, pursuant to that certain Series D-4 Convertible Preferred Stock and
Warrant Purchase Agreement of even date herewith (the "D-4 Purchase Agreement"),
by and among the Company and the Series D-4 Investors set forth on Exhibit J,
the Company has agreed to sell and issue shares of Series D-4 Stock to such
Series D-4 Investors;
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Whereas, the Series A Investors, the Series B Investors, the Series C Investors,
the Series D Investors, the Series D-1 Investors, the Series D-2 Investors, the
Series D-3 Investors and the Key Holders are parties to the Fourth Amended and
Restated Investors Rights Agreement dated as of January 3, 2002 (the "Prior
Agreement");
Whereas, the parties to the Prior Agreement desire to amend and restate the
Prior Agreement in its entirety and, together with the other parties hereto,
desire to enter into this Agreement in order to effect such amendment and
restatement of the Prior Agreement and to grant certain registration and
information rights to the Investors, the Key Holders, the Special Holder, the
Series D-2 Investors, the Series D-3 Investors and the Series D-4 Investors as
set forth below;
Whereas, the Series A Investors, the Series D-2 Investors, the Series D-3
Investors, the Series D-4 Investors and the Key Holders (other than Davidson
Capital Group LLC ("DCG") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇")) are parties to
this Agreement solely for purposes of Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8,
2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.1, 3.2, 3.3, 3.4, 3.7, 3.20 and 5 herein;
Whereas, DCG is a party to this Agreement solely for purposes of Sections 2.1,
2.3, 2.4(d), 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.20 and 5
herein;
Whereas, ▇▇▇▇▇▇▇▇▇ is a party to this Agreement solely for purposes of Sections
2.1, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.20 and 5
herein;
Whereas, Comerica is a party to this Agreement solely for purposes of Sections
2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14 and 5 herein;
Whereas, SC and AC are parties to this Agreement with respect to any warrants
exercisable for the Common Stock held now or in the future by each of SC and AC
solely for purposes of Sections 2, 4 and 5 herein;
Whereas, the Special Holder is a party to this Agreement solely for purposes of
Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14 and 5
herein; and
Whereas, solely with respect to Sections 2, 4 and 5 below, SC and AC shall both
be included in the definition of "Series D-1 Investor" in the preamble to the
this Agreement with regard to any warrants exercisable for the Common Stock held
now or in the future by SC and AC.
Now, Therefore, in consideration of the foregoing recitals, premises and the
covenants contained herein, premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree hereto 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 or similar 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.
"Holder" means any person owning of record Registrable Securities that
have not been sold to the public or any assignee of record of such Registrable
Securities in accordance with Section 2.10 hereof, it being understood that the
Series A Investors, the Series D-2 Investors, the Series D-3 Investors, the
Series D-4 Investors and the Key Holders (other than DCG and ▇▇▇▇▇▇▇▇▇) are
"Holders" for purposes of this Agreement solely with respect to Sections 2.1,
2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.20 and 5 below;
that the Special Holder and Comerica are "Holders" for the purposes of this
Agreement solely with respect to Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9,
2.10, 2.11, 2.12, 2.13, 2.14 and 5 below and only with respect to Special
Holder's shares of Special Common Stock and only with respect to warrants
exercisable for the Common Stock now held by Comerica; that DCG is a "Holder"
for purposes of this Agreement solely with respect to Sections 2.1, 2.3, 2.4(d),
2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.20 and 5 below; that
▇▇▇▇▇▇▇▇▇ is a "Holder" for purposes of this Agreement solely with respect to
Sections 2.1, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14,
3.20 and 5 herein and that SC and AC are each a "Holder" with respect to any
warrants exercisable for the Common Stock held now or in the future by each of
SC and AC for purposes of this Agreement solely with respect to Sections 2, 4
and 5 herein.
"Initial Offering" means the Company's first firm commitment
underwritten public offering of its Common Stock registered under the Securities
Act.
"Preferred Stock" shall mean the outstanding Series A Stock, Series B
Stock, Series C Stock, Series D Stock, Series D-1 Stock, Series D-2 Stock,
Series D-3 Stock and Series D-4 Stock held by the Investors.
"Qualified Public Offering" means the first firm commitment
underwritten public offering pursuant to a registration statement filed under
the Securities Act covering the offer and sale of Common Stock for the account
of the Company in which the public offering price is at least $3.300573532
(subject to Adjustment (as defined in the Eighth Amended and Restated
Certificate of Incorporation)) and the net proceeds after deduction of
underwriter's discounts and commissions to the Company are at least $20,000,000.
"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 or issued or issuable upon the
exercise of any warrants to purchase Shares held on the date hereof (or issued
after the date hereof pursuant to the D-4 Purchase Agreement) by the Series B
Investors, the Series D Investors, the Series D-1 Investors and the Series D-4
Investors; (b) 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
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securities; (c) solely with respect to Sections 2.1, 2.3, 2.4 (as to ▇▇▇▇▇▇▇▇▇
only), 2.4(d) (as to DCG only), 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13,
2.14 and 5 below, the Common Stock of the Company (i) issued or issuable upon
conversion of the Series A Stock, Series D-2 Stock, Series D-3 Stock or Series
D-4 Stock, (ii) held by a Key Holder (or its permitted assigns), or (iii) held
by Special Holder (or its permitted assigns) and which is designated as Special
Common Stock or (iv) held by Comerica issued or issuable upon exercise of all
warrants to purchase Common Stock held now by Comerica and (d) solely with
respect to Sections 2, 4 and 5 below, the Common Stock issued or issuable upon
exercise of all warrants to purchase Common Stock held now or in the future by
each of SC and AC. 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. For purposes hereof, Registrable Securities
held by the Series D-4 Investors shall mean those Registrable Securities issued
or issuable upon conversion of the Series D-4 Stock held by such persons or
entities and shall not include any other Registrable Securities held by them in
their capacity as Series D or Series D-1 Investors.
"Registrable Securities then outstanding" shall be the number of
shares determined by calculating the total number of shares of the 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 and filing fees, printing expenses, fees and
disbursements of counsel for the Company, reasonable fees and disbursements of a
single special counsel for the Holders, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company which shall
be paid in any event by the Company).
"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.
"Shares" shall mean (i) the Series B Stock held by the Series B
Investors (or their permitted assigns), the Series C Stock held by the Series C
Investors (or their permitted assigns), the Series D Stock held by the Series D
Investors (or their permitted assigns), the Series D-1 Stock held by the Series
D-1 Investors (or their permitted assigns), (ii) the Common Stock held by the
Series B Investors, the Series D Investors, the Series D-1 Investors and the
Series D-4 Investors (or their permitted assigns) with respect to any warrants
to purchase Common Stock held on the date hereof (or issued after the date
hereof pursuant to the D-4 Purchase Agreement) by the Series B Investors, the
Series D Investors, the Series D-1 Investors and the Series D-4 Investors (or
their permitted assigns), (iii) solely with respect to Sections 2, 4 and 5
below, the Common Stock held by each of AC and SC (or their permitted assigns)
with respect to any warrants to purchase Common Stock held now or in the future
by each of AC and SC (or their permitted assigns) and (iv) solely with respect
to Section 3.20 below, the Company's Series A
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Stock held by Series A Investors (or their permitted assigns), the Series D-2
Stock held by the Series D-2 Investors (or their permitted assigns), the Series
D-3 Stock held by the Series D-3 Investors and the Series D-4 Stock held by
Series D-4 Investors (or their permitted assigns).
"Special Registration Statement" shall mean a registration statement
relating to any employee benefit plan or with respect to any corporate
reorganization or other transaction under Rule 145 of the Securities Act.
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER.
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; or
(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 limited liability
company to its current employees or its members or former members in accordance
with their interest in the limited liability company, (C) to the Holder's
immediate family member(s) or trust(s) for the benefit of an individual Holder
or such Holder's immediate family member(s), (D) to a partnership whose sole
partners are individual Holder(s) and/or member(s) of the family of such
Holder(s), (E) to a shareholder of GadgetSpace, Inc. who is an "accredited
investor" pursuant to Regulation D promulgated under the Securities Act as set
forth on Exhibit I hereto, (F) to a stockholder of Reason, Inc., who is an
"accredited investor" pursuant to Regulation D promulgated under the Securities
Act, as contemplated in the Series D-3 Purchase Agreement, or (G) to a
stockholder of Simplexity, Inc., who is an "accredited investor" pursuant to
Regulation D promulgated under the Securities Act, as contemplated in the Asset
Purchase Agreement; provided, that in each case the transferee will be subject
to the terms of this Agreement to the same extent as if he 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):
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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 promptly reissue 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, following
a Qualified Public Offering, the Company shall receive a written request from
the Holders of at least fifty-one percent (51%) of the Registrable Securities
(the "Initiating Holders") that the Company file a registration statement under
the Securities Act covering the registration if the anticipated aggregate
offering price, net of underwriting discounts and commissions, would exceed
$2,000,000, 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, effect, as expeditiously as reasonably
possible, 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 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 which would otherwise be underwritten pursuant hereto,
and the number
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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); provided, however, that the 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 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 one hundred eighty (180) days following the
effective date of the registration statement pertaining to the Qualified Public
Offering;
(ii) after the Company has effected three (3) registrations
pursuant to this Section 2.2, and such registrations have been declared or
ordered effective;
(iii) during the period commencing on the date of filing of, and
ending on the date one hundred eighty (180) days following, the effective date
of any registration statement filed by the Company with the SEC; 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 the Qualified Public Offering
within ninety (90) days, in which event the Company shall have the right to
defer such filing for a period of not more than ninety (90) days after receipt
of the request of the Initiating Holders;
(v) if the Company shall furnish to those Holders requesting a
registration statement pursuant to this Section 2.2, 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 stockholders for such registration statement
to be effected at such time, in which event the Company shall have the right to
defer such filing for a period of not more than one hundred twenty (120) 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; or
(vi) if the Initiating Holders propose to dispose of shares of
Registrable Securities that may be immediately registered on Form S-3 pursuant
to a request made under Section 2.4 below.
2.3 Piggyback Registrations. The Company shall notify all Holders of
Registrable Securities in writing at least fifteen (15) 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 Special Registration Statements) and will afford each
such Holder an opportunity to include in such registration statement all or part
of such Registrable Securities held by such Holder. Each Holder desiring to
include in any such registration
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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 Series B Investors,
the Series C Investors, the Series D Investors and the Series D-1 Investors on a
pro rata basis based on the total number of Registrable Securities held by the
Series B Investors, the Series C Investors, the Series D Investors and the
Series D-1 Investors; third, to the Series A Investors, Series D-2 Investors,
Series D-3 Investors, Series D-4 Investors, ▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") and
▇▇▇▇▇▇▇▇▇ on a pro rata basis based on the total number of Registrable
Securities held by the Series A Investors, the Series D-2 Investors, Series D-3
Investors, Series D-4 Investors, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇; fourth, to the Key
Holders (other than ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇) on a pro rata basis based on the
total number of Registrable Securities held by such Key Holders; and fifth, to
any stockholder 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, (ii) reduce
the amount of securities of the Series B Investors, the Series C Investors, the
Series D Investors and the Series D-1 Investors included in the registration
below twenty-five percent (25%) of the total amount of securities included in
such registration, unless such offering is the Initial Offering and such
registration does not include shares of any other selling stockholders, in which
event any or all of the Registrable Securities of the Series B Investors, the
Series C Investors, the Series D Investors and the Series D-1 Investors may be
excluded in accordance with the immediately preceding sentence, or (iii) reduce
the amount of securities of the Series A Investors, the Series D-2 Investors,
the Series D-3 Investors, the Series D-4 Investors, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇
included in the registration below five percent (5%) of the total amount of
securities included in such registration, unless such offering is the Initial
Offering and such registration does not include shares of any other selling
stockholders, in which event any or all of the Registrable Securities of the
Series A Investors, the Series D-2 Investors, the Series D-3 Investors, the
Series D-4 Investors, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ may be excluded in accordance with
the immediately preceding sentence. 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
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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, limited liability company or corporation,
the partners, retired partners, stockholders, members and retired members of
such Holder, or the estates and family members of any such partners, retired
partners, members and retired members and any trusts for the benefit of any of
the foregoing person 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) 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 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 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 is not available for such offering by the
Holders;
(ii) if the Holders requesting registration on Form S-3 and
those Holders requesting registration pursuant to Section 2.3 on such Form S-3
propose to sell Registrable Securities having an aggregate price to the public
of less than $5,000,000;
(iii) if within thirty (30) days of receipt of a written request
from any Holder or Holders pursuant to this Section 2.4(a), (b) and/or (c), the
Company gives notice to such Holder or Holders of the Company's intention to
effect a registration of its securities within ninety (90) days, other than
pursuant to a Special Registration Statement;
(iv) if the Company shall furnish to 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
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stockholders 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 a 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;
(v) if the Company has, within the twelve (12) month
period preceding the date of such request, already effected two (2)
registrations on Form S-3 for the Holders pursuant to this Section 2.4(a) (b)
and/or (c);
(vi) 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.
(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. Registrations effected pursuant to this
Section 2.4 shall not be counted as demands for registration or registrations
effected pursuant to Sections 2.2 or 2.3, respectively.
(d) Form S-3 Registration at Registrant's Expense. In the
event that the Company shall receive from DCG a written request or requests to
register Common Stock then held by DCG 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 such Common Stock,
the Company will, as soon as practicable thereafter, (A) promptly give written
notice of the proposed registration, and any related qualification or
compliance, to all Holders of Registrable Securities; and (B) effect such
registration and any qualifications and compliances as may be required to permit
or facilitate the sale and distribution of such Common Stock, provided, however,
that the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this Section 2.4(d):
(i) if Form S-3 is not available for such offering by
DCG;
(ii) if the Company shall furnish to DCG 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 stockholders 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 a
period of not more than ninety (90) days after receipt of the request of DCG
under this Section 2.4(d), provided that such right to delay a request shall be
exercised by the Company not more than once in any twelve (12) month period; or
(iii) 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.
All Registration Expenses and Selling Expenses incurred in connection with any
registration, qualification or compliance pursuant to this Section 2.4(d) shall
be borne by DCG, pro rata on
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the basis of the number of shares so registered; provided, however, DCG shall
not be responsible for the payment of Registration Expenses or Selling Expenses
attributable to the registration of shares of any other selling stockholder(s)
pursuant to this Section 2.4(d).
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
hereunder, 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(a), (b) and/or (c), the request of which has been
subsequently withdrawn by the Initiating Holders, unless (a) the withdrawal is
based upon material adverse information concerning the Company of which the
Initiating Holders were not aware at the time of such request or (b) the Holders
of a majority of the Registrable Securities then outstanding agree to forfeit
their right to one (1) requested registration pursuant to Section 2.2 or Section
2.4(a), (b) and/or (c), 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 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(a), (b) and/or (c)
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, use commercially
reasonable best efforts to cause such registration statement to become effective
and keep such registration statement effective for up to one hundred twenty
(120) days or, if earlier, until the Holder or Holders have completed the
distribution related thereto. The Company shall not be required to file, cause
to become effective or maintain the effectiveness of any registration statement
that contemplates a distribution of securities on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act.
(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 for the period set forth in
paragraph (a) above.
(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.
(d) Use its commercially reasonable best efforts to
register and qualify the securities covered by such registration statement under
such other securities or Blue Sky laws of
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such jurisdictions as shall be reasonably requested by the Holders, and do any
and all other reasonable acts and things that may be necessary or desirable to
enable the Holder to consummate the public sale or other disposition of the
Registrable Securities; 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. The Company will use its commercially reasonable best efforts to amend
or supplement such prospectus in order to cause such prospectus not to include
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.
(g) Use its commercially reasonable best efforts to
furnish, on the date that such Registrable Securities are delivered to the
underwriters for sale, if such securities are being sold through underwriters,
(i) an opinion, dated as of such date, of the counsel representing the Company
for the purposes of such registration, in form and substance as is customarily
given to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and (ii) a letter dated as of such date, from the
independent certified public accountants of the Company, in form and substance
as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering addressed to the underwriters.
(h) Notify each Holder of Registrable Securities covered
by such registration statement, and each underwriter, if any, after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop order by
the Commission suspending the effectiveness of such registration statement or
the initiation or threatening of any proceeding for that purpose and promptly
use all its commercially reasonable best efforts to prevent the issuance of any
stop order or to obtain its withdrawal if such stop order should be issued.
(i) If the Company has delivered preliminary or final
prospectuses to the Holders, and after having done so, the prospectus is amended
to comply with the requirements of the Securities Act, the Company shall
promptly notify the Holders, and if requested, the Holders shall immediately
cease making offers of Registrable Securities and return all prospectuses to the
Company. The Company shall promptly provide the Holders with revised
prospectuses and, following receipt of the revised prospectuses, the Holders
shall be free to resume making offers of the Registrable Securities.
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(j) Use commercially reasonable best efforts to cause
all such Registrable Securities to be listed on or included in each securities
exchange or quotation system on which similar securities issued by the Company
are then listed.
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 effective date of a registration statement
filed in connection with the Qualified Public Offering. In addition, a Holder's
registration rights shall expire if (a) the Company has completed a Qualified
Public Offering and is subject to the provisions of the Exchange Act, and (b)
all Registrable Securities held by and issuable to such Holder (and its
affiliates, partners, former partners, members and former members) may be sold
under Rule 144 during any ninety (90) day period; provided, however, the
registration rights granted to DCG pursuant to Section 2.4(d) shall not
terminate prior to the second (2nd) year anniversary of the effective date of a
Qualified Public Offering.
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, members, 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 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
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therein or any amendments or supplements thereto; (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading; or (iii) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law in connection with the
offering covered by such registration statement; and the Company will pay as
incurred to each such Holder, partner, officer, director, 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
information furnished expressly for use in connection with such registration by
such Holder, partner, member, officer, director, 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, its officers 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, member, officer, director 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 pay as incurred
any legal or other expenses reasonably incurred by the Company or any such
director, officer, controlling person, underwriter or other Holder, or partner,
member, officer, director 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 net 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
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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.
(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 net 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) is a
subsidiary, parent, general partner, limited partner, retired partner, member or
retired member of a Holder, (b) is a Holder's family member or trust for the
benefit of an individual Holder or such Holder's family member, (c) is a
partnership whose sole partner is an individual Holder or a member of such
Holder's family, (d) acquires at least two hundred thousand (200,000) shares of
Registrable Securities (as adjusted for any stock dividends, combinations,
splits, recapitalizations and the like); or (e) to a shareholder of GadgetSpace,
Inc., as set forth on Exhibit H hereto, (f) to the stockholders of Reason, Inc.,
who is an "accredited investor" pursuant to Regulation D promulgated under the
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Securities Act, as contemplated in the Series D-3 Purchase Agreement, (g) to a
stockholder of Simplexity, Inc., who is an "accredited investor" pursuant to
Regulation D promulgated under the Securities Act, as contemplated in the Asset
Purchase Agreement 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 (i) as to the Company, the
Company, (ii) as to the Investors, the holders of more than sixty-six and two
thirds percent (66-2/3%) of the Registrable Securities held by the Investors,
and (iii) with respect to Section 2.4(d) only, DCG provided, that as to the
Investors, any provision of this Section 2 may be amended with the consent of
the holders of less than all of the shares of Registrable Securities held by the
Investors only in a manner which affects all such Investors in the same fashion.
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 Section 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 at least sixty percent (60%) of the Registrable Securities then
outstanding enter into any agreement with any holder or prospective holder of
any securities of the Company that would grant such holder registration rights
pari passu or senior to those granted to the Holders hereunder.
2.13 "Market Stand-Off" Agreement; Agreement to Furnish Information. Each
Holder hereby agrees that such Holder shall not sell, transfer, make any short
sale of, grant any option for the purchase of, or enter into any hedging or
similar transaction with the same economic effect as a sale, 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:
(i) such agreement shall apply only to the Company's Initial Offering
and any subsequent offering effective within one hundred eighty (180) days after
the Company's Initial Offering, provided, that all restrictions placed on such
Holders pursuant to this Section 2.13(i) shall expire one hundred eighty (180)
days after the Company's Initial Offering; and
(ii) all officers and directors of the Company and holders of at least
one percent (1%) 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
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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. Each
Holder agrees that any transferee of any shares of Registrable Securities shall
be bound by this Section 2.13.
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 commercially reasonable best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 of the Securities Act 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 upon request: a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 of the Securities
Act, and of the Exchange Act (at any time after it has become subject to such
reporting requirements); a copy of the most recent annual or quarterly report of
the Company; 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.
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 ninety (90) days thereafter, the Company will
furnish to each Investor, Series D-2 Investor, Series D-3 Investor and Series
D-4 Investor, a balance sheet of the Company, as at the end of such fiscal year,
and a statement of income and a statement of cash flows of the Company, for such
year, all prepared in accordance with generally accepted
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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 (i.e., employed
by a "Big Four" accounting firm) selected by the Company's Board of Directors.
(c) The Company will furnish to each Investor, Series D-2 Investor,
Series D-3 Investor and Series D-4 Investor as soon as practicable after the end
of each month, and in any event within twenty (20) days thereafter, a balance
sheet of the Company as of the end of each such monthly period, and a statement
of income and a 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. Statements shall include year-to-date figures compared to
the Company's operating plan and budget, with variances delineated. A brief
summary shall be prepared by the Chief Executive Officer and attached to the
Monthly Report which summarizes performance highlights, lowlights, variances
from budget, and an outlook on the ensuing period.
(d) The Company will furnish to each Investor, Series D-2 Investor,
Series D-3 Investor and Series D-4 Investor as soon as practicable after the end
of each quarter and in any event within forty-five (45) days thereafter, a
balance sheet of the Company as of the end of each such fiscal quarter, and a
statement of income and a statement of cash flows of the Company for such period
and for the current fiscal year to date, all 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.
(e) The Company will furnish to each Investor, Series D-2 Investor,
Series D-3 Investor and Series D-4 Investor at least sixty (60) days prior to
the beginning of each fiscal year an annual operating plan and budget, prepared
on a monthly basis for the ensuing fiscal year, and on a basis consistent with
prior periods (including, among other items, appropriate reserves, accruals and
provisions for income taxes) and representing the best estimate of the Company
based upon available information. The Company shall also furnish to each
Investor, Series D-2 Investor, Series D-3 Investor and Series D-4 Investor
projections for the next two (2) fiscal years in the same format as the
financial statements. The Company shall also furnish to each Investor, Series
D-2 Investor, Series D-3 Investor and Series D-4 Investor, within a reasonable
time of its preparation, amendments to the annual budget, if any. Such budget
shall include underlying assumptions and a brief qualitative description of the
Company's plan by the Chief Executive Officer in support of that budget.
(f) The Company will notify each Investor, Series D-2 Investor, Series
D-3 Investor and Series D-4 Investor, as soon as practicable, and in any event
within three (3) days of discovery, of (i) any event (including pending or
threatened litigation, material loan or lease default, or the filing of any
material lawsuit) which could have a material adverse effect upon the financial
condition or results of operations of the Company considered in the aggregate;
(ii) any change in any material fact or circumstance represented or warranted in
this Agreement; (iii) a default or any event or occurrence which with the lapse
of time or notice or both could become a default under the Purchase Agreement,
and (iv) a material default or any event or occurrence which with the lapse of
time or notice or both could become a default under any of the
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Company's material agreements. Such notice shall contain a reasonably detailed
statement outlining such default or event, and the Company's proposed response.
(g) The Company will use its commercially reasonable best efforts to
deliver to each Investor, Series D-2 Investor, Series D-3 Investor and Series
D-4 Investor by no later than forty-five (45) days after the date of this
Agreement, a balance sheet of the Company as of December 31, 2000, and a
statement of income and a statement of cash flows of the Company for the year
ended December 31, 2000, all prepared in accordance with generally accepted
accounting principles consistently applied. Such financial statements shall be
accompanied by a report and opinion thereon by independent public accountants of
national standing (i.e., employed by a "Big Four" accounting firm) selected by
the Company's Board of Directors.
(h) In the event the Company fails to provide the reports or financial
statements required by this Section 3.1, the holders of a majority of the
Preferred Stock may give the Company notice requesting immediate delivery of
such reports. If the Company fails to deliver such reports upon receipt of such
notice, then the holders of a majority of the Preferred Stock shall have the
right and authority, at the Company's sole expense, to request an audit by a
single accounting firm of its or their choice, such that the reports or
financial statements are produced to its or their sole satisfaction.
3.2 Inspection Rights. Each Investor, Series D-2 Investor, Series D-3
Investor and Series D-4 Investor 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 under this Section 3.2 with
respect to a competitor of the Company or with respect to information which the
Board of Directors of the Company determines in good faith is confidential and
should not, therefore, be disclosed.
3.3 Confidentiality of Records. Each Investor, Series D-2 Investor, Series
D-3 Investor and Series D-4 Investor agrees to use, and to use its best efforts
to insure that its authorized representatives use, the same degree of care as
such Investor, Series D-2 Investor. Series D-3 Investor and Series D-4 Investor
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, Series D-2 Investor, Series D-3 Investor and Series D-4
Investor may disclose such proprietary or confidential information to any
partner, subsidiary, portfolio company, or parent of such Investor, Series D-2
Investor, Series D-3 Investor and Series D-4 Investor for the purpose of
evaluating its investment in the Company as long as such partner, subsidiary,
portfolio company, 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.
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3.5 Board Meetings. Until such time as the Board of Directors votes
unanimously to hold meetings less frequently, the Board of Directors shall meet
(in person or by teleconference) at least every other month.
3.6 Issuances to Employees, Directors and Consultants.
(a) Vesting. Unless otherwise approved by the Board of Directors
(including at least two (2) of the directors (the "Preferred Directors"),
designated by the holders of the Preferred Stock in accordance with the Third
Amended and Restated Voting Agreement, of even date herewith, by and among the
Company, the Investors, the Key Holders, the Series D-2 Investors, the Series
D-3 Investors, the Series D-4 Investors and the Special Holder) all stock
options and other stock equivalents issued after the date of this Agreement to
employees, directors, consultants and other service providers shall vest at a
rate not in excess of twenty-five percent (25%) per annum commencing on the
first year following the earlier of the date of issuance or such person's
services commencement date with the Company. Any agreement pursuant to which any
such employee, director, consultant or other service provider is granted,
purchases or exercises stock options or other stock equivalents, 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 shares of stock held by such person for a period of ninety
(90) days. Any acceleration of any vesting schedule that deviates herefrom shall
be approved by at least two (2) Preferred Directors or the holders of at least
sixty percent (60%) of the Preferred Stock voting as a single class on an as
converted basis.
(b) Rights of First Refusal and Co-Sale. Any agreement pursuant to
which any employee, director, consultant or other service provider of the
Company is granted, purchases or exercises stock options or other stock
equivalents subsequent to the date of this Agreement or, alternatively, a stock
restriction agreement executed in connection with such a transaction, shall
provide the Company and the Investors with a right of first refusal and a right
of co-sale, respectively, in form and substance similar to those granted in the
Co-Sale Agreement (as defined in the Purchase Agreement), with respect to the
Common Stock underlying such securities. Such rights shall not be exercisable in
the event that such person transfers such securities to his or her ancestors,
descendants or spouse or to a trust for the benefit of such person(s).
3.7 Key Man Insurance. Subject to the approval of the Board of Directors,
the Company will maintain in full force and effect (i) a term life insurance
policy in the amount of $2,000,000 on the life of ▇▇▇▇▇▇▇▇▇, with $2,000,000 in
proceeds payable to the Company, and (ii) a whole life insurance policy in the
amount of $2,000,000 on the life of ▇▇▇▇▇▇▇▇▇, with $2,000,000 in proceeds
payable to the estate of ▇▇▇▇▇▇▇▇▇. Without the approval of at least two (2)
Preferred Directors, the insurance premiums for the whole life insurance policy
payable to the estate of ▇▇▇▇▇▇▇▇▇ shall not exceed $20,000 per fiscal year. In
the event key person life insurance proceeds are paid to the Company, the
Investors shall have the right (but not the obligation) to sell to the Company
such Investor's pro rata portion of the Preferred Stock, as the case may be. The
price per share at which such shares are to be re-purchased by the Company shall
be equal to the price per share paid by the Series A Investors pursuant to
Section 1.2 of the Series A Stock Purchase Agreement, or the price per share
paid by the Series B Investors
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pursuant to Section 1.2 of the Series B Stock Purchase Agreement, or the price
per share paid by the Series C Investors pursuant to Section 1.2 of the Series C
Stock Purchase Agreement or the price per share paid by the Series D Investors
pursuant to Section 1.2 of the Series D Stock Purchase Agreement or the price
per share paid by the Series D-1 Investors pursuant to Section 1.2 of the Series
D-1 Stock Purchase Agreement or the price per share paid by the Series D-2
Investors pursuant to Section 1.2 of the Series D-2 Stock Purchase Agreement or
the price per share paid by the Series D-3 Investors pursuant to Section 1.2 of
the Purchase Agreement or the price per share paid by the Series D-4 Investors
pursuant to Section 1.2 of the Purchase Agreement, as the case may be, plus in
each such case, all accrued but unpaid dividends through the date of such
re-purchase. In connection with the exercise of the put option created hereby,
the Investors shall deliver to the Company the certificate or certificates
representing the shares to be sold, each certificate to be properly endorsed for
transfer.
3.8 Director and Officer Liability Insurance. Subject to the approval of
the Board of Directors, the Company will maintain in full force and effect
Director and Officer Liability Insurance in an amount of not less than
$2,000,000.
3.9 Assignment of Inventions, Non-Disclosure and Non-Competition
Agreement. The Company shall require all employees and consultants to execute
and deliver an Assignment of Inventions, Non-Disclosure and Non-Competition
Agreement in the form attached as Exhibit G to the Purchase Agreement.
3.10 Assignment of Right of First Refusal. Subject to the Co-Sale
Agreement, in the event the Company elects not to exercise any right of first
refusal or right of first offer the Company may have on a proposed transfer of
any of the Company's outstanding capital stock pursuant to a contract or
otherwise, the Company shall, to the extent it may do so, assign such right of
first refusal or right of first offer to each Investor and ▇▇▇▇▇▇▇▇▇. In the
event of such assignment, each Investor and ▇▇▇▇▇▇▇▇▇ shall have a right to
purchase its pro rata portion of the capital stock proposed to be transferred
based on the total number of shares of the Company's capital stock held by such
Investor or ▇▇▇▇▇▇▇▇▇, as applicable, on the date of such assignment.
3.11 Approval. The Company shall not without the approval of a majority of
the Board of Directors, with all non-interested Directors voting and without the
approval of at least two (2) Preferred Directors, authorize or enter into any
transactions with any director or management employee, or such director's or
employee's immediate family.
3.12 Directors' Expenses. Other than restricted stock issued prior to the
date of this Agreement and stock options granted to directors as approved by the
Board of Directors (or the Compensation Committee thereof) subsequent to the
date of this Agreement, the Company shall not pay any compensation to any member
of the Company's Board of Directors in connection with the performance of their
duties as a director. The Company shall reimburse directors for reasonable
out-of-pocket expenses incurred in connection with service to the Company,
including, but not limited to, reasonable out-of-pocket expenses associated with
(i) attendance of meetings of the Board of Directors and its committees, and
(ii) trade shows and other similar events which are required or requested on the
Company's behalf.
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3.13 Annual Budget. The Company's annual budget shall be approved by a
majority of the Board of Directors (including at least two (2) Preferred
Directors).
3.14 Directors' Liability and Indemnification. The Company's Certificate of
Incorporation and Bylaws shall provide (a) for elimination of the liability of
directors 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.
3.15 Board Committees. The Company shall establish and maintain an Audit
Committee and a Compensation Committee as soon as practicable after the date
hereof. Each committee shall consist of three (3) members, including in each
case the director elected by the holders of Series D Stock and the Series D-1
Stock (the "Series D Designee"). The Series D Designee must consent to any
compensation decision involving aggregate consideration in excess of $100,000
and to all stock option grants, whether approved by the Board of Directors or a
subcommittee of the Board of Directors.
3.16 Dividends. The Company shall not, without the prior approval of the
Board of Directors (including at least two (2) Preferred Directors) and the
holders in interest of at least sixty percent (60%) of the Shares, voting as a
single class on an as converted basis, declare or pay dividends or distributions
on Common Stock.
3.17 Issuance of Capital Stock. The Company shall not, without the prior
approval of the Board of Directors (including at least two (2) Preferred
Directors), issue any capital stock or securities convertible into capital
stock.
3.18 Related Party Transactions. The Company shall not, without the prior
approval of the holders in interest of at least sixty percent (60%) of the
Shares, voting as a single class on an as converted basis, transact any business
or enter into any agreement with any member of the Board of Directors,
management, employees or officers of the Company, unless at "arm's length" other
than those agreements disclosed to and approved prior to the date of this
Agreement. Further, the Company shall not, without the prior approval of the
holders in interest of at least sixty percent (60%) of the Shares, voting as a
single class on an as converted basis, enter into any agreement or contract with
any affiliate of the Company or its officers, directors, or management team
employees (other than agreements required by the Stock Purchase Agreement or
agreements relating to employment, nondisclosure of confidential information or
non-competition) that create obligations for the Company equal to or greater
than $25,000 per year.
3.19 Continuity of Business; Investment. The Company shall not, without the
prior approval of the holders in interest of at least sixty percent (60%) of the
Shares voting as a single class on an as converted basis, change the location or
nature of its business operations, or invest any funds in any concern not
strictly related to its business.
3.20 Lending Transactions. The Company shall not, without the prior
approval of the holders in interest of at least sixty percent (60%) of the
Shares voting as a single class on an as converted basis, make (or permit any
corporation, a majority of the voting stock of which is owned or controlled by
the Company to make) any loan or advance in excess of $50,000 to, or
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own any stock or other securities of, any subsidiary or other corporation,
partnership, or other entity unless it is wholly-owned by the Company. In
addition, the Company shall not, without the prior approval of the holders in
interest of at least sixty percent (60%) of the Shares voting as a single class
on an as converted basis, make any loan or advance to any person, including,
without limitation, any officer, employee or director of the Company or any
subsidiary, except advances and similar expenditures in the ordinary course of
business or under the terms of an employee stock or option plan approved by the
Board of Directors.
3.21 Guarantee of Third Party Debt. The Company shall not, without the
prior approval of the holders in interest of at least sixty percent (60%) of the
Shares voting as a single class on an as converted basis, guarantee directly or
indirectly, any indebtedness except for trade accounts of any subsidiary arising
in the ordinary course of business.
3.22 Capital Expenditures. The Company shall not, without the prior
approval of the Board of Directors (including at least two (2) Preferred
Directors), make capital expenditures (including expenditures under capitalized
leases) which exceed the aggregate amount budgeted for such expenditures in any
fiscal year by more than $100,000. The Company shall not, without the prior
approval of the holders in interest of at least sixty percent (60%) of the
Shares voting as a single class on an as converted basis, expend funds in excess
of $500,000 per year for capital improvements or other Company infrastructure.
3.23 Indebtedness. The Company shall not, without the prior approval of the
Board of Directors (including at least two (2) Preferred Directors), directly or
indirectly create, incur, assume, suffer to exist, or be or remain liable with
respect to, any indebtedness or obligation other than the following:
(a) Current accounts payable and similar current liabilities, incurred
in the ordinary course of business of the Company;
(b) Indebtedness incurred upon the purchase of equipment (which
indebtedness may be secured by a security interest or any other lien or title
retention agreement relating to such equipment), and equipment lease obligations
of any character;
(c) Obligations under present or future leases of real estate used in
the ordinary course of business; or
(d) Any other indebtedness which would not increase the Company's
total indebtedness by more than $250,000 in any fiscal year.
The Company shall not, without the prior approval of the holders in
interest of at least sixty percent (60%) of the Shares, voting as a single class
on an as converted basis, enter into any agreements, including but not limited
to leases, other than in the ordinary course of business, that obligate the
Company to make aggregate annual payments in excess of $50,000.
3.24 Salary Increases. All cash compensation (base salary plus bonus)
payable to any officer or employee of the Company in excess of $120,000 per year
shall be subject to the approval of the Board of Directors (including at least
two (2) Preferred Directors).
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3.25 Subsidiaries or Joint Ventures. The Company shall not, without the
prior approval of the Board of Directors (including at least two (2) Preferred
Directors), establish, liquidate, transfer any assets (other than cash and other
than in the ordinary course of business) to, or invest more than $50,000 in, any
one (1) subsidiary or joint venture.
3.26 Fulfillment Agreement. The Company shall not, without the prior
approval of at least two (2) Preferred Directors, modify, amend, waive or
terminate any provision of the Fulfillment Agreement dated as of March 3, 2000,
by and between the Company and Sterling Cellular, Inc., prior to the expiration
of such agreement.
3.27 Use of Proceeds. The Company shall use the proceeds from the sale of
the Shares solely for (i) hiring personnel, (ii) research and development, (iii)
capital expenditures, (iv) sales and marketing, and (v) working capital.
3.28 Termination of Covenants. All covenants of the Company contained in
Section 3 of this Agreement shall expire and terminate as to each Investor upon
the earlier of (i) the effective date of the registration statement pertaining
to the Qualified Public Offering, which results in the Preferred Stock being
converted into Common Stock 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 3.23(ii)(b) shall not apply to a merger effected exclusively
for the purpose of changing the domicile of the Company (a "Change in Control").
SECTION 4. RIGHTS OF FIRST REFUSAL.
4.1 Subsequent Offerings. Each Investor shall have a right of first refusal
to purchase its pro rata share of all Equity Securities (as hereinafter
defined), 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. Each Investor's pro rata share is equal to the ratio of (a)
the number of shares of the Common Stock (including all shares of Common Stock
issued or issuable upon conversion of the Shares or issued or issuable upon
exercise of any warrants held by such Investor) of which such Investor is deemed
to be a holder 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
Shares, the Series A Stock, the Series D-2 Stock, the Series D-3 Stock and the
Series D-4 Stock or upon the exercise of any outstanding warrants or options)
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 subscribe to or purchase any Common Stock, Preferred Stock
or other security or (iv) any such warrant or right.
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4.2 Exercise of Rights. If the Company proposes to issue any Equity
Securities, it shall give each Investor written notice of its intention,
describing the Equity Securities, the price and the terms and conditions upon
which the Company proposes to issue the same. Each Investor shall have fifteen
(15) days from the giving of such notice to agree to purchase its pro rata share
of the Equity Securities for the price and upon the 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. Notwithstanding the
foregoing, the Company shall not be required to offer or sell such Equity
Securities to any Investor if such offer or sale 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 elect to purchase their pro rata share of the Equity Securities, then
the Company shall promptly notify in writing the Investors who do so elect and
shall offer such Investors the right to acquire such unsubscribed shares. The
Investors shall have five (5) 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 fail to exercise in full the rights of first refusal
provided in this Section 4, the Company shall have ninety (90) days thereafter
to sell the Equity Securities in respect of which the Investor's rights were not
exercised, at a price and upon general terms and conditions materially no more
favorable to the purchasers thereof than specified in the Company's notice to
the Investors 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 in the
manner provided above.
4.4 Termination and Waiver of Rights of First Refusal. The rights of first
refusal established by this Section 4 shall not apply to, and shall terminate
upon the earlier of (i) effective date of the registration statement pertaining
to the Company's Qualified Public Offering or (ii) a Change in Control. The
rights of first refusal established by this Section 4 may be amended, or any
provision waived with the written consent of the holders of a majority of the
Registrable Securities then outstanding, or as permitted by Section 5.7.
4.5 Transfer of Rights of First Refusal. The rights of first refusal of
each Investor 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 of first refusal established by this
Section 4 shall have no application to any of the following Equity Securities:
(a) up to an aggregate amount of 11,992,426 shares of Common Stock
(and/or options, warrants or other Common Stock purchase rights issued pursuant
to such options, warrants or other rights) as adjusted for any stock dividends,
combinations, splits, recapitalizations and the like issued or to be issued
after the Series D-4 Original Issue Date (as defined in the Company's
Certificate of Incorporation as amended) 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 the
Board of Directors;
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(b) stock issued pursuant to any warrants, options, or other
convertible securities outstanding as of the date of this Agreement or as a
result of the conversion of stock underlying any such options or warrants;
(c) any Equity Securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business combination
approved by the Board of Directors (including at least two (2) Preferred
Directors);
(d) shares of Common Stock or Preferred 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, the
Series A Stock, the Series D-2 Stock, the Series D-3 Stock and the Series D-4
Stock;
(f) any Equity Securities issued pursuant to any equipment leasing
or loan arrangement, or debt financing from a bank or similar financial or
lending institution approved by the Board of Directors (including at least two
(2) Preferred Directors);
(g) any Equity Securities that are issued by the Company pursuant to
a Qualified Public Offering; and
(h) any Equity Securities issued in connection with strategic
transactions involving the Company and other entities, including (i) joint
ventures, manufacturing, marketing or distribution arrangements or (ii)
technology transfer or development arrangements; provided that the issuance of
Equity Securities in connection with such strategic transactions and the
issuance of shares therein, has been approved by the Company's Board of
Directors, including the Series D Designee.
SECTION 5. MISCELLANEOUS.
5.1 Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of Delaware (without regard to
the choice of law or conflicts of law provisions thereof).
5.2 Specific Performance. The parties hereto hereby declare that it is
impossible to measure in money the damages which will accrue to a party hereto
or to their heirs, personal representatives, or assigns by reason of a failure
to perform any of the obligations under this Agreement and agree that the terms
of this Agreement shall be specifically enforceable. If any party hereto or his
heirs, personal representatives, or assigns institutes any action or proceeding
to specifically enforce the provisions hereof, any person against whom such
action or proceeding is brought hereby waives the claim or defense therein that
such party or such personal representative has an adequate remedy at law, and
such person shall not offer in any such action or proceeding the claim or
defense that such remedy at law exists.
5.3 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
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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.
5.4 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 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.
5.5 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.
5.6 Severability. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
5.7 Amendment and Waiver.
(a) Except as otherwise expressly provided, this Agreement may be
amended or modified, and the observance of any provision of this Agreement may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only upon the written consent of (i) the Company, (ii) the
holders of more than sixty-six and two-thirds percent (66 2/3%) of the Common
Stock issued or issuable upon conversion of the Shares, and (iii) with respect
to Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, and
5 only, the holders of a majority of the Common Stock (a) held by the Key
Holders or the Special Holder, and (b) issued or issuable upon conversion of the
Series A Stock, the Series D-2 Stock, the Series D-3 Stock and the Series D-4
Stock, and (iv) with respect to Section 2.4(d) only, DCG; provided, however,
that with respect to Section 5.7(a)(ii) and 5.7(a)(iii) above, this Agreement
may be amended or modified with the consent of the holders of less than all of
the shares of Common Stock issued or issuable upon conversion of the Shares
(including the shares of Common Stock issued or issuable upon exercise of any
warrants held by such holders) only in a manner which affects all such holders
in the same fashion. Any amendment or waiver effected in accordance with this
Section 5.7(a) shall be binding upon each party, its successors and assigns.
(b) For the purposes of determining the number of Holders entitled
to vote or exercise any rights hereunder, the Company shall be entitled to rely
solely on the list of record holders of its stock as maintained by or on behalf
of the Company.
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5.8 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.
5.9 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 electronic mail or 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 communications shall be
sent to the party to be notified at the address as set forth on the signature
pages hereof or Exhibits ▇, ▇, ▇, ▇, ▇, ▇, ▇, ▇, ▇ and J hereto or at such other
address as such party may designate by ten (10) days advance written notice to
the other parties hereto.
5.10 Attorneys' Fees. In the event that any suit or action is instituted to
enforce any provision in this Agreement, 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.
5.11 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.
5.12 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.
5.13 Mutual Drafting. This Agreement is the result of joint efforts of the
Company, each of the Investors, Series D-2 Investors, Series D-3 Investors,
Series D-4 Investors, each of the Key Holders and each of the Special Holder and
each provision hereof has been subject to the mutual consultation, negotiation
and agreement of the parties and there shall be no construction against any
party based on any presumption of the party's involvement in the drafting
thereof.
5.14 Aggregation. All Shares, Registrable Securities, Equity Securities,
Series D Stock, Series D-1 Stock and Series D-4 Stock held or acquired by Core
Capital Partners, L.P. and Minotaur, LLC shall be aggregated together for
purposes of determining the rights of each under this Agreement (subject to the
last sentence of the definition of Registrable Securities in Section 1.1 above).
-29-
[SIGNATURE PAGES FOLLOW]
-30-
IN WITNESS WHEREOF, the parties hereto have executed this FIFTH AMENDED AND
RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
INPHONIC, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
2000 ▇▇▇▇▇▇▇▇▇ GST TRUST
/s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
-------------------------------
NAME:
TITLE
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
▇▇▇▇▇▇▇ FAMILY TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Trustee
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
MID-ATLANTIC VENTURE FUND III, L.P.
By: MAVF III Partners, L.P., a
Pennsylvania limited partnership
Its: General Partner
By: MAVF III G.P., Inc., a
Pennsylvania corporation
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Director
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
RAFNET VENTURES, L.P.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Partner
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇ ▇▇▇▇▇
--------------------------
▇▇▇ ▇▇▇▇▇
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
CMS PEP XIV CO-INVESTMENT SUBPARTNERSHIP
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Officer
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
CMS TECH CO-INVESTMENT SUBPARTNERSHIP
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Officer
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
LBLEVENTURES, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Member
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the day
and year first above written.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
MOUNT WASHINGTON ASSOCIATES L.L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Authorized Representative
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
▇▇▇▇▇ CAPITAL PARTNERS, LLC
By: /s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------
Name: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
CORE CAPITAL PARTNERS, L.P.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
MINOTAUR, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Member
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
BRIND INVESTMENT PARTNERS II
By: /s/ ▇▇▇ ▇▇▇▇▇
---------------------
Name: ▇▇▇ ▇▇▇▇▇
Title: Partner
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
SIGNATURE21CAPITAL
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇*
* Signing for purposes of Sections 2.1, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10,
2.11, 2.12, 2.13, 2.14 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
DAVIDSON CAPITAL GROUP LLC*
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Sr.
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Sr.
Title: Chief Operating Officer
* Signing for purposes of Sections 2.1, 2.3, 2.4(d), 2.5, 2.6, 2.7, 2.8, 2.9,
2.10, 2.11, 2.12, 2.13, 2.14 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇*
* Signing for purposes of Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10,
2.11, 2.12, 2.13, 2.14 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇*
* Signing for purposes of Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10,
2.11, 2.12, 2.13, 2.14 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇*
* Signing for purposes of Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10,
2.11, 2.12, 2.13, 2.14 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------
▇▇▇▇▇ ▇▇▇▇▇*
* Signing for purposes of Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10,
2.11, 2.12, 2.13, 2.14 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------
▇▇▇▇ ▇▇▇▇▇*
* Signing for purposes of Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10,
2.11, 2.12, 2.13, 2.14 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------
▇▇▇▇ ▇▇▇▇▇*
* Signing for purposes of Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10,
2.11, 2.12, 2.13, 2.14 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇*
* Signing for purposes of Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10,
2.11, 2.12, 2.13, 2.14 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------
▇▇▇▇▇ ▇▇▇▇▇*
* Signing for purposes of Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10,
2.11, 2.12, 2.13, 2.14 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇*
* Signing for purposes of Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10,
2.11, 2.12, 2.13, 2.14 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇▇▇▇▇*
* Signing for purposes of Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10,
2.11, 2.12, 2.13, 2.14 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇*
* Signing for purposes of Sections 2.1, 2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10,
2.11, 2.12, 2.13, 2.14 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
SPRING CAPITAL PARTNERS, LP*
By: Spring Capital Investors, LLC
Its: General Partner
By: /s/ ▇▇▇▇▇▇ McE. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ McE. ▇▇▇▇▇▇▇
Title: Member
For all purposes under this Agreement Spring Capital Partners, L.P. is
deemed to be a "Series D-1 Investor" with respect to the shares of the
Company's Series D-1 Preferred Stock held by them. Furthermore, with
respect to Sections 2, 4 and 5 of this Agreement, Spring Capital
Partners, L.P. is also deemed to be an "Investor" with regard to any
warrants exercisable for shares of the Common Stock held now or in the
future by each of them.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
WYNNEFIELD PRIVATE EQUITY PARTNERS I, LP
By: Wynnefield GP, L.P.
Its: General Partner
By: Wynnefield Capital, LLC
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Partner
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
THIRTY-FIVE EAST PARTNERS (ELEVEN) LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Vice President
and Chief Executive Officer
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
VENTURE INVESTMENT PARTNERS I LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Partner
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
ARGOSY INVESTMENT PARTNERS II, L.P.
By: Argosy Associates II, L.P.
Its: General Partner
By: Argosy Associates II, Inc.
Its: General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
THE PRODUCTIVITY FUND IV, L.P., a
Delaware limited partnership
By: First Analysis Management
Company IV, L.L.C.
Its: General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Member
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
THE PRODUCTIVITY FUND IV ADVISORS FUND,
L.P., a Delaware limited partnership
By: First Analysis Management Company
IV, L.L.C.
Its: General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Member
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ REVOCABLE TRUST
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
▇▇▇▇▇▇▇ INTELLIMEDIA VENTURES, LP*
------------------------------------
Name:
Title:
* Signing as a D-2 Investor and Special Holder for purposes of Sections 2.1,
2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.1, 3.2, 3.3, 3.4,
3.7, 3.20 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
▇▇▇▇▇▇ ATLANTIC VENTURE FUND II, LP*
------------------------------------
Name:
Title:
* Signing as a D-2 Investor and Special Holder for purposes of Sections 2.1,
2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.1, 3.2, 3.3, 3.4,
3.7, 3.20 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
HARBINGER/AURORA QP VENTURE FUND, LLC*
------------------------------------
Name:
Title:
* Signing as a D-2 Investor and Special Holder for purposes of Sections 2.1,
2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.1, 3.2, 3.3, 3.4,
3.7, 3.20 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
HARBINGER/AURORA VENTURE FUND, LLC*
------------------------------------
Name:
Title:
* Signing as a D-2 Investor and Special Holder for purposes of Sections 2.1,
2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.1, 3.2, 3.3, 3.4,
3.7, 3.20 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
-------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇*
* Signing as a D-2 Investor and Special Holder for purposes of Sections 2.1,
2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.1, 3.2, 3.3, 3.4,
3.7, 3.20 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
-------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇*
* Signing as a D-2 Investor and Special Holder for purposes of Sections 2.1,
2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.1, 3.2, 3.3, 3.4,
3.7, 3.20 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
-----------------------------
H. ▇▇▇▇ ▇▇▇▇▇▇*
* Signing as a D-2 Investor and Special Holder for purposes of Sections 2.1,
2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.1, 3.2, 3.3, 3.4,
3.7, 3.20 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the day
and year first above written.
SEQUEL LIMITED PARTNERHSIP II*
By:
---------------------------------
Name:
Title:
* Signing as a D-3 Investor and Special Holder for purposes of Sections 2.1,
2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.1, 3.2, 3.3, 3.4,
3.7, 3.20 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the day
and year first above written.
SEQUEL ENTREPRENEURS' FUND II LP*
By:
---------------------------
Name:
Title:
* Signing as a D-3 Investor and Special Holder for purposes of Sections 2.1,
2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.1, 3.2, 3.3, 3.4,
3.7, 3.20 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
LT III LLC*
By:
------------------------
Name:
Title:
* Signing as a D-3 Investor and Special Holder for purposes of Sections 2.1,
2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.1, 3.2, 3.3, 3.4,
3.7, 3.20 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇*
* Signing as a D-3 Investor and Special Holder for purposes of Sections 2.1,
2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.1, 3.2, 3.3, 3.4,
3.7, 3.20 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇*
* Signing as a D-3 Investor and Special Holder for purposes of Sections 2.1,
2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.1, 3.2, 3.3, 3.4,
3.7, 3.20 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the day
and year first above written.
SIMPLEXITY, INC.*
By:
---------------------------------------
Name:
Title:
* Signing as a D-3 Investor and Special Holder for purposes of Sections 2.1,
2.3, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12, 2.13, 2.14, 3.1, 3.2, 3.3, 3.4,
3.7, 3.20 and 5 only.
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
RIVERSIDE PARTNERSHIP, LP
BY: RIVERSIDE LLC, ITS GENERAL PARTNER
BY: FIRST ANALYSIS MANAGEMENT COMPANY III, LLC,
ITS MANAGER
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Member
Signature Page to Fifth Amended and Restated Investor Rights Agreement
INPHONIC, INC.
FIFTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
VENTURE INVESTMENT PARTNERS I LLC
By: _____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Partner