Investors' Rights Agreement - iBEAM Broadcasting Corp.
iBEAM BROADCASTING CORPORATION
AMENDED AND RESTATED
INVESTORS' RIGHTS AGREEMENT
February 15, 2000
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TABLE OF CONTENTS
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1. Registration Rights........................................ 1
1.1 Definitions.......................................... 1
1.2 Request for Registration............................. 2
1.3 Company Registration................................. 4
1.4 Form S-3 Registration................................ 5
1.5 Obligations of the Company........................... 6
1.6 Information from Holder.............................. 7
1.7 Expenses of Registration............................. 7
1.8 Delay of Registration................................ 8
1.9 Indemnification...................................... 8
1.10 Reports Under Securities Exchange Act of 1934........ 10
1.11 Assignment of Registration Rights.................... 10
1.12 Limitations on Subsequent Registration Rights........ 11
1.13 "Market Stand-Off" Agreement......................... 11
1.14 Termination of Registration Rights................... 11
2. Covenants of the Company................................... 12
2.1 Delivery of Financial Statements..................... 12
2.2 Inspection........................................... 12
2.3 Termination of Information and Inspection Covenants.. 13
2.4 Right of First Offer................................. 13
2.5 Termination of Right of First Offer.................. 14
2.6 MTV Observer Rights.................................. 15
2.7 Intel Observer Rights................................ 15
2.8 Microsoft Observer Rights............................ 16
2.9 Pacific Century Observer Rights...................... 17
2.10 America Online Observer Rights....................... 18
2.11 Stand-Still.......................................... 19
2.12 Restrictions on Transfer............................. 20
3. Confidentiality............................................ 21
3.1 Confidentiality...................................... 21
3.2 Amendment............................................ 23
4. Miscellaneous.............................................. 23
4.1 Successors and Assigns............................... 23
4.2 Governing Law........................................ 23
4.3 Counterparts......................................... 23
4.4 Titles and Subtitles................................. 23
4.5 Notices.............................................. 23
4.6 Expenses............................................. 23
4.7 Entire Agreement: Amendments and Waivers............. 24
4.8 Severability......................................... 24
4.9 Aggregation of Stock................................. 24
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AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT is made as of the
15th day of February, 2000, by and among iBEAM BROADCASTING CORPORATION, a
Delaware corporation (the "Company"), and the investors listed on Schedule A
hereto (each of which is herein referred to as an "Investor").
RECITALS
WHEREAS, certain of the Investors (the "Existing Investors") hold shares of
the Company's Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, or Series D Preferred Stock and/or shares of Common Stock
issued upon conversion thereof (the "Series A Preferred Stock," the "Series B
Preferred Stock," the "Series C Preferred Stock," and the "Series D Preferred
Stock," respectively) and possess registration rights, information rights,
rights of first offer, and other rights pursuant to an Amended and Restated
Investors' Rights Agreement dated as of October 14, 1999, among the Company, and
such Existing Investors (the "Prior Agreement"); and
WHEREAS, the Existing Investors are holders of at least a majority of the
"Registrable Securities" of the Company (as defined in the Prior Agreement), and
desire to amend, restate and supersede the Prior Agreement in its entirety; and
WHEREAS, new Investors are parties to the Series E Preferred Stock Purchase
Agreement of even date herewith among the Company and such new Investors (the
"Series E Agreement"), which provides that as a condition to the closing of the
sale of the Series E Preferred Stock, this Agreement must be executed and
delivered by such new Investors and Existing Investors holding at least a
majority of the "Registrable Securities" of the Company (as defined in the Prior
Agreement) and the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the Existing Investors hereby agree that the Prior Agreement shall
be amended, restated and superseded in its entirety by this Agreement, and the
parties hereto further agree as follows:
1. Registration Rights. The Company covenants and agrees as
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follows:
1.1 Definitions. For purposes of this Section 1:
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(a) The term "Act" means the Securities Act of 1933, as
amended.
(b) The term "Form S-3" means such form under the Act as
in effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC that permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
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(c) The term "Holder" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in accordance
with Section 1.11 hereof.
(d) The term "Initial Offering" means the Company's first
firm commitment underwritten public offering of its Common Stock under the Act.
(e) The term "1934 Act" means the Securities Exchange Act
of 1934, as amended.
(f) The term "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(g) The term "Registrable Securities" means (i) the Common
Stock issuable or issued upon conversion of the Series A Preferred Stock, (ii)
the Common Stock issuable or issued upon conversion of the Series B Preferred
Stock, (iii) the Common Stock issuable or issued upon conversion of the Series C
Preferred Stock, (iv) the Common Stock issuable or issued upon conversion of the
Series D Preferred Stock , (v) the Common Stock issuable or issued upon
conversion of the Series E Preferred Stock, (vi) the Common Stock purchasable or
purchased upon exercise of the warrant issued to America Online, Inc. dated
February ___, 2000 and (vii) any Common Stock of the Company issued as (or
issuable upon the conversion or exercise of any warrant, right or other security
that is issued as) a dividend or other distribution with respect to, or in
exchange for, or in replacement of, the shares referenced in (i) through (vi)
above, excluding in all cases, however, any Registrable Securities sold by a
person in a transaction in which his rights under this Section 1 are not
assigned.
(h) The number of shares of Registrable Securities
outstanding shall be determined by the number of shares of Common Stock
outstanding that are, and the number of shares of Common Stock issuable pursuant
to then exercisable or convertible securities that are, Registrable Securities.
(i) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 Request for Registration.
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(a) Subject to the conditions of this Section 1.2, if the
Company shall receive at any time after the earlier of (i) February 2, 2003 or
(ii) six (6) months after the effective date of the Initial Offering, a written
request from the Holders of thirty percent (30%) or more of the Registrable
Securities then outstanding (the "Initiating Holders") that the Company file a
registration statement under the Act covering the registration of Registrable
Securities with an anticipated aggregate offering price of at least $10,000,000,
then the Company shall, within twenty (20) days of the receipt thereof, give
written notice of such request to all Holders, and subject to the
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limitations of this Section 1.2, use all reasonable efforts to effect, as soon
as practicable, the registration under the Act of all Registrable Securities
that the Holders request to be registered in a written request received by the
Company within twenty (20) days of the mailing of the Company's notice pursuant
to this Section 1.2(a).
(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 1.2 and the Company shall include such information in the written
notice referred to in Section 1.2(a). In such event the right of any Holder to
include its Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Initiating Holders and such Holder) to
the extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company (which underwriter or underwriters shall be
reasonably acceptable to a majority in interest of the Initiating Holders).
Notwithstanding any other provision of this Section 1.2, if the underwriter
advises the Company that marketing factors require a limitation of the number of
securities underwritten (including Registrable Securities), then the Company
shall so advise all Holders of Registrable Securities that would otherwise be
underwritten pursuant hereto, and the number of shares that may be included in
the underwriting shall be allocated to the Holders of such Registrable
Securities on a pro rata basis based on the number of Registrable Securities
held by all such Holders (including the Initiating Holders). 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 1.2:
(i) in any particular jurisdiction in which the
Company would be required to execute a general consent to service of process in
effecting such registration, unless the Company is already subject to service in
such jurisdiction and except as may be required under the Act; or
(ii) after the Company has effected two (2)
registrations pursuant to this Section 1.2, and such registrations have been
declared or ordered effective and the securities offered pursuant to such
registrations have been sold; or
(iii) during the period starting with the date sixty
(60) days prior to the Company's good faith estimate of the date of the filing
of, and ending on a date one hundred eighty (180) days following the effective
date of, a Company-initiated registration subject to Section 1.3 below, provided
that the Company is actively employing in good faith all reasonable efforts to
cause such registration statement to become effective; or
(iv) if the Initiating Holders propose to dispose of
Registrable Securities that may be registered on Form S-3 pursuant to Section
1.4 hereof; or
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(v) if the Company shall furnish to Holders
requesting a registration statement pursuant to this Section 1.2, a certificate
signed by the Company's Chief Executive Officer or Chairman of the Board stating
that in the good faith judgment of the Board of Directors of the Company, it
would be seriously detrimental to the Company and its 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.
1.3 Company Registration.
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(a) If (but without any obligation to do so) the Company
proposes to register (including for this purpose a registration effected by the
Company for stockholders other than the Holders) any of its stock or other
securities under the Act in connection with the public offering of such
securities (other than a registration relating solely to the sale of securities
to participants in a Company stock plan, a registration relating to a corporate
reorganization or other transaction under Rule 145 of the Act, a registration on
any form that does not include substantially the same information as would be
required to be included in a registration statement covering the sale of the
Registrable Securities, a registration in which the only Common Stock being
registered is Common Stock issuable upon conversion of debt securities that are
also being registered, a registration in which the only Common Stock being
registered is Common Stock issuable pursuant to warrants issued in connection
with the issuance of debt securities, or a registration relating solely to
securities not convertible into Common Stock), the Company shall, at such time,
promptly give each Holder written notice of such registration. Upon the written
request of each Holder given within twenty (20) days (or within ten (10) days if
the notice is given after the Company has completed its Initial Offering) after
mailing of such notice by the Company in accordance with Section 4.5, the
Company shall, subject to the provisions of Section 1.3(c), use all reasonable
efforts to cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested to be registered.
(b) Right to Terminate Registration. The Company shall
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have the right to terminate or withdraw any registration initiated by it under
this Section 1.3 prior to the effectiveness of such registration whether or not
any Holder has elected to include securities in such registration. The expenses
of such withdrawn registration shall be borne by the Company in accordance with
Section 1.7 hereof.
(c) Underwriting Requirements. In connection with any
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offering involving an underwriting of shares of the Company's capital stock, the
Company shall not be required under this Section 1.3 to include any of the
Holders' securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it (or by other persons entitled to select the underwriters) and enter into an
underwriting agreement in customary form with an underwriter or underwriters
selected by the Company, and then only in such quantity as the managing
underwriter determines in its sole discretion will not jeopardize the success of
the offering by the Company. If the total amount of securities, including
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Registrable Securities, requested by stockholders to be included in such
offering exceeds the amount of securities sold other than by the Company that
the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable Securities,
that the underwriters determine in their sole discretion will not jeopardize the
success of the offering (the securities so included to be apportioned pro rata
among the selling Holders according to the total amount of securities entitled
to be included therein owned by each selling Holder or in such other proportions
as shall mutually be agreed to by such selling Holders), but in no event shall
(i) the amount of securities of the selling Holders included in the offering be
reduced below twenty percent (20%) of the total amount of securities included in
such offering, unless such offering is the initial public offering of the
Company's securities, in which case the selling Holders may be excluded if the
underwriters make the determination described above and no other stockholder's
securities are included, or (ii) notwithstanding (i) above, any shares being
sold by a stockholder exercising a demand registration right similar to that
granted in Section 1.2 be excluded from such offering. For purposes of the
preceding parenthetical concerning apportionment, for any selling stockholder
that is a Holder of Registrable Securities and that is a partnership or
corporation, the partners, retired partners and stockholders of such Holder, or
the estates and family members of any such partners and retired partners and any
trusts for the benefit of any of the foregoing persons shall be deemed to be a
single "selling Holder," and any pro rata reduction with respect to such
"selling Holder" shall be based upon the aggregate amount of Registrable
Securities owned by all such related entities and individuals.
1.4 Form S-3 Registration. In case the Company shall receive
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from the Holders a written request or requests that the Company effect a
registration on Form S-3 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 shall:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders;
and
(b) use all reasonable efforts to effect, as soon as
practicable, 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 Holders' Registrable Securities as are specified
in such request, together with all or such portion of the Registrable Securities
of any other 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 1.4:
(i) if Form S-3 is not available for such offering by
the Holders;
(ii) if the Holders, together with the holders of any
other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable
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Securities and such other securities (if any) at an aggregate price to the
public (net of any underwriters' discounts or commissions) of less than
$1,000,000;
(iii) if the Company shall furnish to the Holders a
certificate signed by the Chief Executive Officer or Chairman of the Board 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 one hundred twenty (120)
days after receipt of the request of the Holder or Holders under this Section
1.4; provided, however, that the Company shall not utilize this right more than
once in any twelve month period;
(iv) if the Company has, within the twelve (12) month
period preceding the date of such request, already effected one registration on
Form S-3 for the Holders pursuant to this Section 1.4; or
(v) in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance.
(c) Subject to the foregoing, the Company shall file a
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 1.4 shall not be counted as requests for registration effected pursuant
to Sections 1.2.
1.5 Obligations of the Company. Whenever required under this
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Section 1 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use all reasonable efforts to
cause such registration statement to become effective, and, upon the request of
the Holders of a majority of the Registrable Securities registered thereunder,
keep such registration statement effective for a period of up to one hundred
twenty (120) days or, if earlier, until the distribution contemplated in the
Registration Statement has been completed;
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement;
(c) furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other
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documents as they may reasonably request in order to facilitate the disposition
of Registrable Securities owned by them;
(d) use all reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions;
(e) in the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering;
(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 Act or the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;
(g) cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed; and
(h) provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration.
1.6 Information from Holder. It shall be a condition
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precedent to the obligations of the Company to take any action pursuant to this
Section 1 with respect to the Registrable Securities of any selling Holder that
such Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
1.7 Expenses of Registration. All expenses other than
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underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Sections 1.2, 1.3 and 1.4,
including (without limitation) all registration, filing and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for the Company
and for one special counsel for the Holders (which shall not exceed $20,000)
shall be borne by the Company. Notwithstanding the foregoing, the Company shall
not be required to pay for any expenses of any registration proceeding begun
pursuant to Section 1.2 if the registration request is subsequently withdrawn at
the request of the Holders of a majority of the Registrable Securities to be
registered (in which case all participating Holders shall bear such expenses pro
rata based upon the number of Registrable Securities that were to be requested
in the withdrawn registration). Unless
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otherwise stated, all selling expenses incurred in connection with a
registration relating to securities registered on behalf of the Holders shall be
borne pro rata by the Holder or Holders based on the number of shares so
registered.
1.8 Delay of Registration. No Holder shall have any right to
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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 1.
1.9 Indemnification. In the event any Registrable Securities
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are included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners or officers, directors and
stockholders of each Holder, legal counsel and accountants for each Holder, any
underwriter (as defined in the Act) for such Holder and each person, if any, who
controls such Holder or underwriter within the meaning of the Act or the 1934
Act, against any losses, claims, damages or liabilities (joint or several) to
which they may become subject under the Act, the 1934 Act or any state
securities laws, 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"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Act, the 1934 Act, any
state securities laws or any rule or regulation promulgated under the Act, the
1934 Act or any state securities laws; and the Company will reimburse each such
Holder, 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 subsection l.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 that occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by any such Holder, underwriter or controlling person;
provided further, however, that the foregoing indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit of any Holder or
underwriter, or any person controlling such Holder or underwriter, from whom the
person asserting any such losses, claims, damages or liabilities purchased
shares in the offering, if a copy of the prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Holder or underwriter to
such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the shares to such person, and if the
prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability; provided that the failure of such
Holder to deliver any such prospectus or supplement is not a result of the
Company to meet its obligations under Section 1.5 hereof.
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(b) To the extent permitted by law, each selling Holder
will indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, legal counsel and
accountants for the Company, any underwriter, any other Holder selling
securities in such registration statement and any controlling person of any such
underwriter or other Holder, against any losses, claims, damages or liabilities
(joint or several) to which any of the foregoing persons may become subject,
under the Act, the 1934 Act or any state securities laws, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and each such Holder will reimburse any person intended
to be indemnified pursuant to this subsection l.9(b), for any legal or other
expenses reasonably incurred by such person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this subsection l.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 that in no event shall any
indemnity under this subsection l.9(b) exceed the gross proceeds from the
offering received by such Holder.
(c) Promptly after receipt by an indemnified party under
this Section 1.9 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 1.9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate 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 prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.9, 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 1.9.
(d) If the indemnification provided for in this Section 1.9
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
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 statements or omissions that resulted in
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such loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined 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.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Holders under this
Section 1.9 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
1.10 Reports Under Securities Exchange Act of 1934. With a
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view to making available to the Holders the benefits of Rule 144 promulgated
under the Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144, at all times after ninety (90)
days after the effective date of the Initial Offering;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC that permits the
selling of any such securities without registration or pursuant to such form.
1.11 Assignment of Registration Rights. The rights to cause
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the Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities that (i) is a subsidiary, parent, affiliate (as such
term is defined in Rule 405 promulgated under the Act) partner, limited partner,
retired partner or stockholder (collectively, "Related Person") of a Holder,
(ii) is a Holder's family member or trust for the benefit of an individual
Holder, or (iii) after such assignment or transfer,
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holds at least 300,000 shares of Registrable Securities (subject to appropriate
adjustment for stock splits, stock dividends, combinations and other
recapitalizations), provided: (a) the Company is, within a reasonable time after
such transfer, furnished with 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; (b) such transferee or assignee agrees
in writing to be bound by and subject to the terms and conditions of this
Agreement, including without limitation the provisions of Section 1.13 below;
and (c) such assignment shall be effective only if immediately following such
transfer the further disposition of such securities by the transferee or
assignee is restricted under the Act.
1.12 Limitations on Subsequent Registration Rights. From and
---------------------------------------------
after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of a majority of the Registrable Securities,
enter into any agreement with any holder or prospective holder of any securities
of the Company that would allow such holder or prospective holder (a) to include
such securities in any registration filed under Section 1.3 hereof, unless under
the terms of such agreement, such holder or prospective holder may include such
securities in any such registration only to the extent that the inclusion of
such securities will not reduce the amount of the Registrable Securities of the
Holders that are included or (b) to demand registration of their securities.
1.13 "Market Stand-Off" Agreement. Each Holder hereby agrees
---------------------------
that it will not, without the prior written consent of the managing underwriter,
during the period commencing on the date of the final prospectus relating to the
Company's initial public offering and ending on the date specified by the
Company and the managing underwriter (such period not to exceed one hundred
eighty (l80) days) (i) lend, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock (whether such shares or any
such securities are then owned by the Holder or are thereafter acquired), or
(ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The underwriters in connection with the Company's initial public
offering are intended third party beneficiaries of this Section 1.13 and shall
have the right, power and authority to enforce the provisions hereof as though
they were a party hereto.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period. However, nothing in this
Section 1.13 shall affect, impair or diminish any Holder's right to sell,
transfer or assign any or all of its shares of Registrable Securities to a
Related Person pursuant to the terms set forth in Section 1.11 hereof.
1.14 Termination of Registration Rights. No Holder shall be
----------------------------------
entitled to exercise any right provided for in this Section 1 after five (5)
years following the consummation of
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the Initial Offering or, as to any Holder, such earlier time beginning after
expiration of the "Market Standoff" set forth in Section 1.13 at which all
Registrable Securities held by such Holder (and any affiliate of the Holder with
whom such Holder must aggregate its sales under Rule 144) can be sold in any
three (3)-month period without registration in compliance with Rule 144 of the
Act.
2. Covenants of the Company.
------------------------
2.1 Delivery of Financial Statements. The Company shall
--------------------------------
deliver to each Investor holding shares of the Company:
(a) as soon as practicable, but in any event within ninety
(90) days after the end of each fiscal year of the Company, an income statement
for such fiscal year, a balance sheet of the Company and statement of
stockholder's equity as of the end of such year, and a statement of cash flows
for such year, such year-end financial reports to be in reasonable detail,
prepared in accordance with generally accepted accounting principles ("GAAP"),
and audited and certified by independent public accountants of nationally
recognized standing selected by the Company;
(b) as soon as practicable after the end of each quarter,
and in any event within forty-five (45) days after each quarterly accounting
period, an unaudited quarterly report including a balance sheet, income
statement and cash flow analysis (prepared in accordance with GAAP other than
for accompanying notes and subject to changes resulting from year-end audit
adjustments);
(c) as soon as practicable, but in any event at least
thirty (30) days prior to the end of each fiscal year, a budget and business
plan for the next fiscal year, prepared on a monthly basis, including balance
sheets, income statements and statements of cash flows for such months and, as
soon as prepared, any other budgets or revised budgets prepared by the Company;
and
(d) such other information relating to the financial
condition, business, prospects or corporate affairs of the Company as the
Investor or any assignee of the Investor may from time to time request,
provided, however, that the Company shall not be obligated under this subsection
(d) or any other subsection of Section 2.1 to provide information that it deems
in good faith to be a trade secret or similar confidential information.
2.2 Inspection. The Company shall permit each Investor that
----------
holds at least 1,800,000 shares of Registrable Securities, at such Investor's
expense, to visit and inspect the Company's properties, to examine its books of
account and records and to discuss the Company's affairs, finances and accounts
with its officers, all at such reasonable times as may be requested by the
Investor; provided, however, that the Company shall not be obligated pursuant to
this Section 2.2 to provide access to any information that it reasonably
considers to be a trade secret or similar confidential information.
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2.3 Termination of Information and Inspection Covenants. The
---------------------------------------------------
covenants set forth in Sections 2.1 and 2.2 shall terminate as to Investors and
be of no further force or effect when the sale of securities pursuant to a
registration statement filed by the Company under the Act in connection with the
firm commitment underwritten offering of its securities to the general public is
consummated or when the Company first becomes subject to the periodic reporting
requirements of Sections 12(g) or 15(d) of the 1934 Act, whichever event shall
first occur.
2.4 Right of First Offer. Subject to the terms and conditions
--------------------
specified in this paragraph 2.4 and in paragraph 2.10, the Company hereby grants
to each Major Investor (as hereinafter defined) a right of first offer with
respect to future sales by the Company of its Shares (as hereinafter defined).
For purposes of this Section 2.4, a Major Investor shall mean any Investor or
transferee that holds at least 900,000 shares of Registrable Securities. For
purposes of this Section 2.4, Investor includes any general partners and
affiliates of an Investor. An Investor shall be entitled to apportion the right
of first offer hereby granted it among itself and its partners and affiliates in
such proportions as it deems appropriate.
Except as provided in subparagraph (d), each time the Company proposes
to offer any shares of, or securities convertible into or exchangeable or
exercisable for any shares of, any class of its capital stock ("Shares"), the
Company shall first make an offering of such Shares to each Major Investor in
accordance with the following provisions.
(a) The Company shall deliver a notice in accordance with
Section 4.5 ("Notice") to the Major Investors stating (i) its bona fide
intention to offer such Shares, (ii) the number of such Shares to be offered,
and (iii) the price and terms upon which it proposes to offer such Shares.
(b) By written notification received by the Company, within
twenty (20) calendar days after receipt of the Notice, the Major Investor may
elect to purchase or obtain, at the price and on the terms specified in the
Notice, up to that portion of such Shares that equals the proportion that the
number of shares of Registrable Securities then held by such Major Investor
bears to the total number of shares of Common Stock of the Company then
outstanding (assuming full conversion of all convertible securities). The
Company shall promptly, in writing, inform each Major Investor that elects to
purchase all the shares available to it (a "Fully-Exercising Investor") of any
other Major Investor's failure to do likewise. During the ten (10) day period
commencing after such information is given, each Fully-Exercising Investor may
elect to purchase that portion of the Shares for which Major Investors were
entitled to subscribe but which were not subscribed for by the Major Investors
that is equal to the proportion that the number of shares of Registrable
Securities then held by such Fully-Exercising Investor bears to the total number
of shares of Registrable Securities then held by all Fully-Exercising Investors
who wish to purchase some of the unsubscribed shares.
(c) If all Shares that Investors are entitled to obtain
pursuant to subsection 2.4(b) are not elected to be obtained as provided in
subsection 2.4(b) hereof, the Company may, during the ninety (90) day period
following the expiration of the period provided in subsection 2.4(b) hereof,
offer the remaining unsubscribed portion of such Shares to any person or
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persons at a price not less than, and upon terms no more favorable to the
offeree than, those specified in the Notice. If the Company does not enter into
an agreement for the sale of the Shares within such period, or if such agreement
is not consummated within ninety (90) days of the execution thereof, the right
provided hereunder shall be deemed to be revived and such Shares shall not be
offered unless first reoffered to the Major Investors in accordance herewith.
(d) The right of first offer in this paragraph 2.4 shall
not be applicable to (i) the issuance or sale of shares of Common Stock (or
options therefor) granted after the date of this Amended and Restated Investors'
Rights Agreement, with the approval of a majority of the members of the Board of
Directors not holding management positions with the Company (and the reissuance
of any shares issued or subject to outstanding options returned to the Company
from any unexercised options or restricted stock repurchased by the Company
after such date), to employees, directors and consultants for the primary
purpose of soliciting or retaining their services pursuant to stock option plans
approved by the Board of Directors; (ii) the issuance of securities pursuant to
a bona fide, firmly underwritten public offering of shares of Common Stock,
registered under the Act, at an offering price of at least $3.97 per share
(appropriately adjusted for any stock split, dividend, combination or other
recapitalization) and resulting in proceeds to the Company of at least
$20,000,000 in the aggregate, (iii) the issuance of securities pursuant to the
conversion or exercise of convertible or exercisable securities, (iv) the
issuance of securities in connection with a bona fide business acquisition of or
by the Company approved by a majority of the Board of Directors of the Company,
whether by merger, consolidation, sale of assets, sale or exchange of stock or
otherwise, (v) the issuance of stock, warrants or other securities or rights,
with the approval of a majority of the Board of Directors of the Company, to
persons or entities with which the Company is entering or has entered into a
strategic relationship, (vi) the issuance of stock, warrants, or other
securities or rights in connection with and other bank debt financing,
commercial lending, equipment financings, capital lease, or similar
transactions, with the approval of a majority of the Board of Directors of the
Company, (vii) in the event that Intel Corporation and the Company agree on the
terms of a technology development relationship, the issuance of a warrant to
Intel Corporation to purchase up to 146,199 shares of Series C Preferred Stock
at $3.42 per share (subject to adjustment of such fixed dollar amounts for any
stock splits, stock dividends, combinations, recapitalizations or the like) and
the issuance of any Common Stock in connection with the conversion of such
preferred stock; (viii) the issuance of a warrant to Comdisco Inc. to purchase
6,397 shares of Series D Preferred Stock at $4.69 per share (subject to
adjustment of such fixed dollar amounts for any stock splits, stock dividends,
combinations, recapitalizations or the like) and the issuance of any Common
Stock in connection with the conversion of such preferred stock, or (ix) the
issuance of a warrant to Microsoft Corporation to purchase up to 218,120 shares
of Series D Preferred Stock at $5.96 (subject to adjustment of such fixed dollar
amounts for any stock splits, stock dividends, combinations, recapitalizations
or the like) and the issuance of any Common Stock in connection with the
conversion of such preferred stock.
2.5 Termination of Right of First Offer. The covenants set
-----------------------------------
forth in Section 2.4 shall terminate and be of no further force or effect upon
the consummation of, and shall not be applicable to, the sale of securities
pursuant to a bona fide, firmly underwritten public offering of shares of common
stock, registered under the Act, at an offering price of at least $3.97 per
share
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<PAGE>
(appropriately adjusted for any stock split, dividend, combination or other
recapitalization) and resulting in proceeds to the Company of at least
$20,000,000.
2.6 MTV Observer Rights. As long as funds affiliated with
-------------------
Media Technology Ventures, L.P. ("MTV") in the aggregate own not less than fifty
percent (50%) of the shares of the Series B Preferred Stock such funds purchased
pursuant to that certain Series B Preferred Stock Purchase Agreement by and
among the Company and certain stockholders of the Company, dated as of June 8,
1998 (or an equivalent amount of Common Stock issued upon conversion thereof),
the Company shall invite a representative of MTV to attend all meetings of its
Board of Directors in a nonvoting observer capacity and, in this respect, shall
give such representative copies of all notices, minutes, consents, and other
materials that it provides to its directors; provided, however, that such
representative shall agree to hold in confidence and trust and to act in a
fiduciary manner with respect to all information so provided; and, provided
further, that the Company reserves the right to withhold any information and to
exclude such representative from any meeting or portion thereof if access to
such information or attendance at such meeting could adversely affect the
attorney-client privilege between the Company and its counsel or would result in
disclosure of trade secrets to such representative or if such Investor or its
representative is a direct competitor of the Company. The covenants set forth in
this Section 2.6 shall terminate and be of no further force or effect upon the
occurrence of either event specified in Section 2.3 hereof.
2.7 Intel Observer Rights. As long as Intel Corporation
---------------------
("Intel"), together with its subsidiaries (defined as entities which Intel
beneficially owns, either directly or indirectly, at least 50% of the voting
securities) in the aggregate own not less than 50% of the shares of the Series C
Preferred Stock Intel purchased pursuant to the Series C Agreement (or an
equivalent amount of Common Stock issued upon conversion thereof), the Company
shall invite a representative of Intel (the "Intel Observer") to attend all
meetings of its Board of Directors in a nonvoting observer capacity and, in this
respect, shall give such representative copies of all notices, minutes,
consents, and other materials that it provides to its directors; provided,
however, that the Company reserves the right to withhold any information and to
exclude the Intel Observer from any meeting or portion thereof if access to such
information or attendance at such meeting could (a) adversely affect the
attorney-client privilege between the Company and its counsel; or (b) result in
disclosure of confidential or proprietary information of third parties. In
addition, a majority of the Company's nonemployee directors shall have the right
to exclude the Intel Observer from portions or entire meetings of the Board of
Directors or omit to provide the Intel Observer with certain information or
analysis which would pose a conflict of interest for Intel. Any disclosures of
confidential information between the Company and the Intel Observer and Intel
will be governed by the terms of the Corporate Non Disclosure Agreement Number
122651 dated August 19, 1998 and any related Confidential Information
Transmittal records executed between the Company and Intel. The Company
acknowledges that Intel will likely have, from time to time, information that
may be of interest to the Company ("Information") regarding a wide variety of
matters including, by way of example only, (1) Intel's technologies, plans and
services, and plans and strategies relating thereto, (2) current and future
investments Intel has made, may make, may consider or may become aware of with
respect to other companies and other technologies, products and services,
including, without limitation, technologies, products and services that may be
competitive with the Company's, and
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<PAGE>
(3) developments with respect to the technologies, products and services, and
plans and strategies relating thereto, of other companies, including, without
limitation, companies that may be competitive with the Company. The Company
recognizes that a portion of such Information may be of interest to the Company.
Such Information may or may not be known by the Intel Observer. The Company
agrees that Intel and the Intel Observer shall have no duty to disclose any
Information to the Company or permit the Company to participate in any projects
or investments based on any Information, or to otherwise take advantage of any
opportunity that may be of interest to the Company if it were aware of such
Information, and hereby waives, to the extent permitted by law, any claim based
on the corporate opportunity doctrine or otherwise that could limit Intel's
ability to pursue opportunities based on such Information or that would require
Intel or the Intel Observer to disclose any such Information to the Company or
offer any opportunity relating thereto to the Company. The covenants set forth
in this Section 2.7 shall terminate and be of no further force or effect upon
the occurrence of either event specified in Section 2.3 hereof.
2.8 Microsoft Observer Rights. As long as Microsoft, together
-------------------------
with its subsidiaries (defined as entities which the Microsoft Corporation
beneficially owns, either directly or indirectly, at least 50% of the voting
securities) in the aggregate own not less than 50% of the shares of the Series D
Preferred Stock Microsoft Corporation purchased pursuant to the Series D
Agreement (or an equivalent amount of Common Stock issued upon conversion
thereof), the Company shall invite a representative of Microsoft (the "Microsoft
Observer") to attend all meetings of its Board of Directors in a nonvoting
observer capacity and, in this respect, shall give such representative copies of
all notices, minutes, consents, and other materials that it provides to its
directors; provided, however, that the Company reserves the right to withhold
any information and to exclude the Microsoft Observer from any meeting or
portion thereof if access to such information or attendance at such meeting
could (a) adversely affect the attorney-client privilege between the Company and
its counsel; or (b) result in disclosure of confidential or proprietary
information of third parties. In addition, a majority of the Company's
nonemployee directors shall have the right to exclude the Microsoft Observer
from portions or entire meetings of the Board of Directors or omit to provide
the Microsoft Observer with certain information or analysis which would pose a
conflict of interest for Microsoft Corporation. Any disclosures of confidential
information between the Company and the Microsoft Observer and Microsoft
Corporation will be governed by the terms of the Corporate Non Disclosure
Agreement in the form of Schedule B and any related Confidential Information
Transmittal records executed between the Company and Microsoft Corporation. The
Company acknowledges that each Microsoft Corporation will likely have, from time
to time, information that may be of interest to the Company ("Information")
regarding a wide variety of matters including, by way of example only, (1)
Microsoft Corporation's technologies, plans and services, and plans and
strategies relating thereto, (2) current and future investments the Microsoft
Corporation has made, may make, may consider or may become aware of with respect
to other companies and other technologies, products and services, including,
without limitation, technologies, products and services that may be competitive
with the Company's, and (3) developments with respect to the technologies,
products and services, and plans and strategies relating thereto, of other
companies, including, without limitation, companies that may be competitive with
the Company. The Company recognizes that a portion of such Information may be of
interest to the Company. Such Information may or may not be known by the
Microsoft Observer. The Company agrees that
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Microsoft Corporation and the Microsoft Observer shall have no duty to disclose
any Information to the Company or permit the Company to participate in any
projects or investments based on any Information, or to otherwise take advantage
of any opportunity that may be of interest to the Company if it were aware of
such Information, and hereby waives, to the extent permitted by law, any claim
based on the corporate opportunity doctrine or otherwise that could limit
Microsoft Corporation's ability to pursue opportunities based on such
Information or that would require Microsoft Corporation or the Microsoft
Observer to disclose any such Information to the Company or offer any
opportunity relating thereto to the Company. The covenants set forth in this
Section 2.8 shall terminate and be of no further force or effect upon the
occurrence of either event specified in Section 2.3 hereof.
2.9 Cyber Commerce Limited Observer Rights. As long as Cyber
--------------------------------------
Commerce Limited ("Cyber Commerce"), together with its subsidiaries (defined as
entities which Cyber Commerce beneficially owns, either directly or indirectly,
at least 50% of the voting securities) in the aggregate own not less than 50% of
the shares of the Series E Preferred Stock Cyber Commerce purchased pursuant to
the Series E Agreement (or an equivalent amount of Common Stock issued upon
conversion thereof), the Company shall invite a representative of Cyber Commerce
(the "Cyber Commerce Observer") to attend all meetings of its Board of Directors
in a nonvoting observer capacity and, in this respect, shall give such
representative copies of all notices, minutes, consents, and other materials
that it provides to its directors; provided, however, that the Company reserves
the right to withhold any information and to exclude the Cyber Commerce Observer
from any meeting or portion thereof if access to such information or attendance
at such meeting could (a) adversely affect the attorney-client privilege between
the Company and its counsel; or (b) result in disclosure of confidential or
proprietary information of third parties. In addition, a majority of the
Company's nonemployee directors shall have the right to exclude the Cyber
Commerce Observer from portions or entire meetings of the Board of Directors or
omit to provide the Cyber Commerce Observer with certain information or analysis
which would pose a conflict of interest for Cyber Commerce. Any disclosures of
confidential information between the Company and the Cyber Commerce Observer and
Cyber Commerce will be governed by the terms of the Corporate Non Disclosure
Agreement in the form of Schedule B and any related Confidential Information
Transmittal records executed between the Company and Cyber Commerce. The Company
acknowledges that Cyber Commerce will likely have, from time to time,
information that may be of interest to the Company ("Information") regarding a
wide variety of matters including, by way of example only, (1) Cyber Commerce's
technologies, plans and services, and plans and strategies relating thereto, (2)
current and future investments the Cyber Commerce has made, may make, may
consider or may become aware of with respect to other companies and other
technologies, products and services, including, without limitation,
technologies, products and services that may be competitive with the Company's,
and (3) developments with respect to technologies, products and services, and
plans and strategies relating thereto, or other companies, including without
limitation, companies that may be competitive with the Company. The Company
recognizes that a portion of such Information may be of interest to the Company.
Such information may or may not be known by the Cyber Commerce Observer. The
Company agrees that Cyber Commerce and the Cyber Commerce Observer shall have no
duty to disclose any Information to the Company or permit the Company to
participate in any projects or investments based on any
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<PAGE>
Information, or to otherwise take advantage of any opportunity that may be of
interest to the Company if it were aware of such Information, and hereby waives,
to the extent permitted by law, any claim based on the corporate opportunity
doctrine or otherwise that could limit Cyber Commerce's ability to pursue
opportunities based on such Information or that would require Cyber Commerce or
the Cyber Commerce Observer to disclose any such Information to the Company or
offer any opportunity relating thereto to the Company. The covenants set forth
in this Section 2.9 shall terminate and be of no further force or effect upon
the occurrence of either event specified in Section 2.3 hereof.
2.10 America Online Observer Rights. As long as America
------------------------------
Online, Inc. ("America Online"), together with its subsidiaries (defined as
entities which the America Online beneficially owns, either directly or
indirectly, at least 50% of the voting securities) in the aggregate own not less
than 50% of the shares of the Series E Preferred Stock America Online purchased
pursuant to the Series E Agreement (or an equivalent amount of Common Stock
issued upon conversion thereof), the Company shall invite a representative of
America Online (the "America Online Observer" to attend all meetings of its
Board of Directors in a nonvoting observer capacity and, in this respect, shall
give such representative copies of all notices, minutes, consents, and other
materials that it provides to its directors; provided, however, that the Company
reserves the right to withhold any information and to exclude the America Online
Observer from any meeting or portion thereof if access to such information or
attendance at such meeting could (a) adversely affect the attorney-client
privilege between the Company and its counsel; or (b) result in disclosure of
confidential or proprietary information of third parties. In addition, a
majority of the Company's nonemployee directors shall have the right to exclude
the America Online Observer from portions or entire meetings of the Board of
Directors or omit to provide the America Online Observer with certain
information or analysis which would pose a conflict of interest for America
Online. Any disclosures of confidential information between the Company and the
America Online Observer and America Online will be governed by the terms of the
Corporate Non Disclosure Agreement in the form of Schedule B and any related
Confidential Information Transmittal records executed between the Company and
America Online. The Company acknowledges that America Online will likely have,
from time to time, information that may be of interest to the Company
("Information") regarding a wide variety of matters including, by way of example
only, (1) America Online's technologies, plans and services, and plans and
strategies relating thereto, (2) current and future investments the America
Online has made, may make, may consider or may become aware of with respect to
other companies and other technologies, products and services, including,
without limitation, technologies, products and services that may be competitive
with the Company's, and (3) developments with respect to technologies, products
and services, and plans and strategies relating thereto, or other companies,
including without limitation, companies that may be competitive with the
Company. The Company recognizes that a portion of such Information may be of
interest to the Company. Such information may or may not be known by the America
Online Observer. The Company agrees that America Online and the America Online
Observer shall have no duty to disclose any Information to the Company or permit
the Company to participate in any projects or investments based on any
Information, or to otherwise take advantage of any opportunity that may be of
interest to the Company if it were aware of such Information, and hereby waives,
to the extent permitted by law, any claim based on the corporate opportunity
doctrine or otherwise that
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could limit America Online's ability to pursue opportunities based on such
Information or that would require America Online or the America Online Observer
to disclose any such Information to the Company or offer any opportunity
relating thereto to the Company. The covenants set forth in this Section 2.10
shall terminate and be of no further force or effect upon the occurrence of
either event specified in Section 2.3 hereof.
2.11 Stand-Still.
-----------
(a) In no event during the period of time beginning on the
date of this Agreement and extending for five years hereafter, shall any of
Microsoft Corporation, Sony Corporation of America, Covad Communications
Investment Corp., Covad Communications Group, Inc., Cyber Commerce Limited or
America Online, Inc. (each a "Strategic Investor") acquire beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Act of 1934, as
amended) of 15% or more of the voting securities (on an as if converted to
Common Stock basis) of the Company then outstanding, without the prior written
consent of the Company.
(b) The covenant set forth in subsection (a) above shall
terminate and be of no further force or effect with respect to a Strategic
Investor upon the occurrence of any of the following after the date of this
Agreement:
(i) The Company shall sell or issue equity securities
of the Company to persons or entities with which the Company is entering or has
entered into a strategic relationship and such persons or entities shall not
enter into a standstill agreement substantially similar to the agreement set
forth in subsection (a) above;
(ii) The breach of the agreement set forth in
subsection (a) by another Strategic Investor, unless such breach is
unintentional and is cured within ten (10) business days from the date that such
breach first becomes known to the Company (provided that the provision of such
opportunity to cure does not prejudice or hinder the right of any other party
hereto);
(iii) Such time as any corporation, partnership,
individual, trust, unincorporated association, or other entity or "person" (as
defined in Section 13(d)(3) of the 1934 Act), other than a party hereto (a
"Third Party"), shall have:
(A) commenced, or publicly announced an intention
to commence, a tender offer or exchange offer for any shares of any class of
capital stock of the Company, the consummation of which would result in
"beneficial ownership" (as defined under the 1934 Act) by such Third Party
(together with all such Third Party's "affiliates" and "associates" (as such
terms are defined in the 1934 Act)) of fifteen percent (15%) or more of the
capital stock of the Company (as measured on a fully diluted basis, assuming the
conversion, exercise or exchange of any of the then outstanding securities
convertible, exercisable or exchangeable for, or any other rights to acquire
shares of, capital stock of the Company) (collectively, for purposes of this
Section 2.11, the "Capital Stock");
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<PAGE>
(B) acquired beneficial ownership of shares of
any class of capital stock of the Company which, when aggregated with any shares
of any class of capital stock of the Company already owned by such Third Party,
its affiliates and associates, would result in the aggregate beneficial
ownership by such Third Party, its affiliates and associates of fifteen percent
(15%) or more of the Capital Stock;
(C) filed a Notification and Report Form under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, reflecting
an intent to acquire all or substantially all of the Company's assets;
(D) acquired all or substantially all of the
assets of the Company;
(E) entered into an agreement with the Company
which contemplates (A) the sale of the Company or (B) the acquisition of (x) all
or substantially all of the assets of the Company by such Third Party or (y)
beneficial ownership of fifteen percent (15%) or more of the Capital Stock by
such Third Party if such Third Party has not also entered into a standstill
agreement with the Company containing terms that are at least as restrictive to
such party as the terms of this Section 2.11;
(F) solicited "proxies" in a "solicitation"
subject to the proxy rules under the 1934 Act, executed any written consent or
become a "participant" in any "solicitation" (as such terms are defined in
Regulation 14A under the 1934 Act), in opposition to any proxy solicitation
being conducted by the Company, in each case with respect to any class of
capital stock of the Company;
(G) publicly announced a proposal or intention to
undertake any of the actions enumerated in the foregoing subsections (A) through
(F).
No Strategic Investor will be required to dispose of any voting
securities of the Company, to the extent that the voting securities beneficially
owned by such Strategic Investor represent more than fifteen percent (15%) of
the voting securities of the Company, and ownership of such voting securities
over fifteen percent (15%) of the voting securities of the Company shall not be
deemed to be a violation of this Agreement, as a result of a recapitalization of
the Company or a repurchase, redemption or exchange of securities of the Company
or any other action taken by the Company.
The limitations set forth in Section 2.11 hereof, shall not prohibit or
apply to investments by or for the account of any partnerships in which a
Strategic Investor has a non-controlling interest.
2.12 Restrictions on Transfer.
------------------------
(a) Each Strategic Investor hereby agrees not to (i) lend,
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, or otherwise transfer or dispose of, directly or indirectly, any
shares of Series D or Series E Preferred Stock, the Common Stock issuable upon
-20-
<PAGE>
conversion of the Series D or Series E Preferred Stock, or any other securities
of the Company or (ii) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of the Series D or Series E Preferred Stock, the Common Stock issuable upon
conversion of the Series D or Series E Preferred Stock, or any other securities
of the Company, for a period beginning on the date of the closing of such
Strategic Investor's purchase of Series D or Series E Preferred Stock, as
applicable, and ending upon the earlier of (A) 180 days following the Initial
Offering or (B) two years from the date of the closing of the purchase of the
Series D or Series E Preferred Stock by such Strategic Investor, as applicable,
except (i) pursuant to an acquisition of the Company by another entity by means
of any transaction or series of related transactions (including, without
limitation; any reorganization, merger or consolidation) that results in the
transfer of fifty percent (50%) or more of the outstanding voting power of the
Company to another person or entity or group of related persons or entities,
(ii) pursuant to a liquidation, dissolution or winding up of the Company, (iii)
or to any subsidiary (at least 80% owned), any parent (which owns at least 80%
of such Strategic Investor) or any affiliate (as such term is defined under Rule
405 promulgated under the Act) of the Strategic Investor which agrees to be
bound by the terms of this Agreement. Notwithstanding the foregoing, each
Strategic Investor agrees that upon the request of the Company or the
underwriter of the Company's Initial Offering, it shall enter into an Agreement
with such terms as set forth in Section 1.13 hereof or as otherwise requested by
the managing underwriter, in connection with the Company's Initial Offering.
(b) Each Strategic Investor hereby agrees not to offer,
sell or otherwise transfer or dispose of, directly or indirectly, any shares of
Series D or Series E Preferred Stock, the Common Stock issuable upon conversion
of the Series D or Series E Preferred Stock or any other securities of the
Company, for a period beginning 180 days following the Initial Offering and
ending upon the earlier of (i) one year following the Initial Offering and (ii)
two years from the date of the closing of the purchase of the Series D or Series
E Preferred Stock by such Strategic Investor, as applicable, except (A) pursuant
to an acquisition of the Company by another entity by means of any transaction
or series of related transactions (including, without limitation, any
reorganization, merger or consolidation) that results in the transfer of fifty
percent (50%) of more of the outstanding voting power of the Company to another
person or entity or group of related persons or entities, (B) pursuant to a
liquidation, dissolution or winding up of the Company or (C) to any subsidiary
(at least 80% owned), any parent (which owns at least 80% of such Strategic
Investor) or any affiliate (as such term is defined under Rule 405 promulgated
under the Act) of the Strategic Investor which agrees to be bound by the terms
of this Agreement, provided that nothing in the foregoing shall restrict any
Strategic Investor from entering into a bona fide hedge transaction during the
period set forth in this subsection, with respect to the Common Stock issuable
upon conversion of the Series D or Series E Preferred Stock.
3. Confidentiality.
---------------
3.1 Confidentiality.
---------------
(a) Disclosure of Terms. The terms and conditions (the
-------------------
"Financing Terms") of this Agreement, the Series D Agreement, the Voting
Agreement of even date
-21-
<PAGE>
herewith (collectively, the "Financing Agreements"), including their existence,
shall be considered confidential information and shall not be disclosed by the
Company or by Intel to any third party except in accordance with the provisions
set forth below or as required by law.
(b) Press Releases, Etc. Following the Closing, the Company
--------------------
may issue a press release disclosing that Intel has invested in the Company;
provided that the final form of the press release is approved in advance in
writing by Intel. Intel's name and the fact that Intel is an investor in the
Company can be included in a reusable press release boilerplate statement, so
long as Intel has given the Company its initial approval of such boilerplate
statement and the boilerplate statement is reproduced in exactly the form in
which it was approved. Such boilerplate statement may be posted on the Company's
Web page. No other announcements regarding Intel's investment in the Company in
a press release, conference, advertisement, announcement, professional or trade
publication, mass marketing materials or otherwise to the general public may be
made without such Investor's prior written consent. In addition, the Company
shall notify each Investor that the Company considers the Financing Terms to be
confidential information and that the Financing Terms should not be disclosed by
the Investors other than in accordance with the terms of this Section 3;
provided, further, the Company shall notify each member of the Board of
Directors that the directors are bound by their fiduciary duties to the Company
to maintain the confidentiality of the Financing Terms.
(c) Permitted Disclosures. Notwithstanding the foregoing,
---------------------
(a) Intel and/or the Company may disclose any of the Financing Terms to its
current or bona fide prospective investors, employees, investment bankers,
lenders, accountants and attorneys, in each case (other than to a current or
bona fide prospective investor) only where such person or entities are under
appropriate nondisclosure obligations, either express or implied, and in the
case of a current or bona fide prospective investor only where such person or
entity has been informed by the Company that such information is confidential;
and (b) Intel and/or the Company may disclose (other than in a press release or
other public announcement described in subsection (ii)) solely the fact that
Intel is an investor in the Company to any third parties without the requirement
for the consent of any other party.
(d) Legally Compelled Disclosure. In the event that either
----------------------------
the Company or Intel is requested or becomes legally compelled (including
without limitation, pursuant to securities laws and regulations) to disclose the
existence of the Financing Agreements or any of the Financing Terms hereof in
contravention of the provisions of this Section 3.1, such party (the "Disclosing
Party") shall provide the other party (the "Non-Disclosing Party") with prompt
written notice of that fact so that the appropriate party may seek (with the
cooperation and reasonable efforts of the other party) a protective order,
confidential treatment or other appropriate remedy. In such event, the
Disclosing Party shall furnish only that portion of the information which is
reasonably required and shall use reasonable efforts to assist in obtaining
confidential treatment for such information to the extent reasonably requested
by the Non-Disclosing Party.
-22-
<PAGE>
(e) Other Information. The provisions of this Section 3.1
-----------------
shall be in addition to, and not in substitution for, the provisions of any
separate nondisclosure agreement executed by any of the parties hereto with
respect to the transactions contemplated hereby.
(f) All notices required under this Section shall be made
pursuant to Section 4.5 of this Agreement.
3.2 Amendment. Any provision of this Section 3 may be
---------
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the Company and Intel.
4. Miscellaneous.
-------------
4.1 Successors and Assigns. Except as otherwise provided
----------------------
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including transferees of any shares of Registrable Securities). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
4.2 Governing Law. This Agreement shall be governed by and
-------------
construed under the laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California.
4.3 Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.4 Titles and Subtitles. The titles and subtitles used in
--------------------
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
4.5 Notices. Unless otherwise provided, any notice required
-------
or permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
delivery by confirmed facsimile transmission, nationally recognized overnight
courier service, or upon deposit with the United States Post Office, by
registered or certified mail, postage prepaid and addressed to the party to be
notified at the address indicated for such party on the signature page hereof,
or at such other address as such party may designate by ten (10) days' advance
written notice to the other parties.
4.6 Expenses. If any action at law or in equity is necessary
--------
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
-23-
<PAGE>
4.7 Entire Agreement: Amendments and Waivers. This Agreement
----------------------------------------
(including the Exhibits hereto, if any) constitutes the full and entire
understanding and agreement among the parties with regard to the subjects hereof
and thereof. Except for Sections 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12 and 3,
which shall require the consent of the party benefiting from or subject to such
provision, any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the holders of a majority of the Registrable
Securities. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each holder of any Registrable Securities, each future
holder of all such Registrable Securities, and the Company.
4.8 Severability. If one or more provisions of this Agreement
------------
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision was so excluded and shall be enforceable in
accordance with its terms.
4.9 Aggregation of Stock. All shares of Registrable
--------------------
Securities held or acquired by affiliated entities or persons shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.
-24-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
iBEAM BROADCASTING CORPORATION
----------------------------------------
Peter Desnoes
Chief Executive Officer
Address: 645 Almanor Avenue
Suite 100
Sunnyvale, CA 94086
SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
<PAGE>
INVESTORS:
CROSSPOINT VENTURE PARTNERS 1997
--------------------------------------
Rich Shapero
General Partner
Address: 2925 Woodside Road
Woodside, CA 94062
ACCEL VI L.P.
By: Accel VI Associates L.L.C.
Its General Partner
--------------------------------------
Carter Sednaoui
Managing Member
Address: 428 University Avenue Accel Partners
Palo Alto, CA 94301 One Palmer Square
Attn: J. Peter Wagner Princeton, NJ 08542
Attn: G. Carter
Sednaoui
SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
<PAGE>
ACCEL INTERNET FUND II L.P.
By: Accel Internet Fund II Associates L.L.C.
Its General Partner
--------------------------------------------
Carter Sednaoui
Managing Member
Address: 428 University Avenue Accel Partners
Palo Alto, CA 94301 One Palmer Square
Attn: J. Peter Wagner Princeton, NJ 08542
Attn: G. Carter
Sednaoui
ACCEL KEIRETSU VI L.P.
By: Accel Keiretsu VI Associates L.L.C.
Its General Partner
--------------------------------------------
Carter Sednaoui
Managing Member
Address: 428 University Avenue Accel Partners
Palo Alto, CA 94301 One Palmer Square
Attn: J. Peter Wagner Princeton, NJ 08542
Attn: G. Carter
Sednaoui
SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
<PAGE>
ACCEL INVESTORS `98 L.P.
By:________________________________________
Carter Sednaoui
General Partner
Address: 428 University Avenue Accel Partners
Palo Alto, CA 94301 One Palmer Square
Attn: J. Peter Wagner Princeton, NJ 08542
Attn: G. Carter
Sednaoui
MEDIA TECHNOLOGY VENTURES, L.P.
By:_______________________________________
Title:____________________________________
Address: One First Street
Los Altos, CA 94022
SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
<PAGE>
MEDIA TECHNOLOGY VENTURES
ENTREPRENEURS FUND, L.P.
By:________________________________________
Title:_____________________________________
Address: One First Street
Los Altos, CA 94022
ANNABEL J. MONTGOMERY, as Trustee of the
ANNABEL MONTGOMERY REVOCABLE TRUST DATED
FEBRUARY 7, 1991 and JAMES W. MONTGOMERY, as
tenants in common, each as to an undivided
one-half interest
___________________________________________
Annabel J. Montgomery, Trustee
MONTGOMERY & ASSOCIATES, L.P.
By:________________________________________
Title:_____________________________________
SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
<PAGE>
CULBARA, INC.
By:________________________________________
Title:_____________________________________
Address: 100 Wilshire Blvd. Suite 400
Santa Monica, CA 90401
G&H PARTNERS
By:________________________________________
Title:_____________________________________
STANFORD UNIVERSITY
___________________________________________
Carol Filmer
Address: Stanford Management Company
2770 Sand Hill Road
Menlo Park, CA 94025
SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
<PAGE>
J.P. MORGAN DIRECT VENTURE CAPITAL
INSTITUTIONAL INVESTORS LLC
By:______________________________________________
Name:____________________________________________
Title:___________________________________________
Address: 522 5 TH Avenue.
New York, New York 10036
J.P. MORGAN DIRECT VENTURE
CAPITAL PRIVATE INVESTORS LLC
By:______________________________________________
Name:____________________________________________
Title:____________________________________________
Address: 522 5TH Avenue.
New York, New York 10036
INTEL CORPORATION
By:______________________________________________
Name:____________________________________________
Title:___________________________________________
Address: 2200 Mission College Blvd.
Santa Clara, CA 95052-8119
SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
<PAGE>
MICROSOFT CORPORATION
By:______________________________________________
Name:____________________________________________
Title:___________________________________________
Address: One Microsoft Way
Redmond, WA 98052-6399
COVAD COMMUNICATIONS INVESTMENT CORP.
By:______________________________________________
Name:____________________________________________
Title:___________________________________________
CRESCENDO WORLD FUND LLC
By:______________________________________________
Name:____________________________________________
Title:___________________________________________
EAGLE VENTURES WF, LLC
By:______________________________________________
Name:____________________________________________
Title:___________________________________________
SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
<PAGE>
LUNN-iBEAM, LLC
By: LUNN PARTNERS, LLC
ITS MANAGER
____________________________________________
Robert J. Lunn
Managing Member
PETER B. DESNOES, IRA A/C 774-91015
GUARANTEE & TRUST COMPANY, TTEE
-------------------------------------------------
ROBERT C. HAWK
-------------------------------------------------
Address: 7585 S. Biscay Street
Aurora, CO 80016
LEN GROSSI
Address: 5555 Melrose Avenue
Hollywood, CA 90038
SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
<PAGE>
FRED SEEGAL
-------------------------------------------------
Address: 31 West 52nd Street
27th Floor
New York, New York 10019
WS INVESTMENT COMPANY 99B
By:______________________________________________
Name:____________________________________________
Title:___________________________________________
Address: 650 Page Mill Road
Palo Alto, CA 94304
CHRIS DIER
-------------------------------------------------
BRUCE D. LAWLER
-------------------------------------------------
TOM GILLIS
-------------------------------------------------
JEREMY ZULLO
-------------------------------------------------
NILS LAHR
-------------------------------------------------
SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
<PAGE>
DAVID STREHLOW
-------------------------------------------------
BOB DAVIS
-------------------------------------------------
PHILIP ROSEDALE
-------------------------------------------------
CYBER COMMERCE LIMITED
By:______________________________________________
Name:
Title:
AMERICA ONLINE, INC.
By:______________________________________________
Name:
Title:
SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
<PAGE>
COMDISCO, INC.
By:______________________________________________
Title:___________________________________________
Address: 100 Hamilton Ste. 104A 6111 North River Road
Palo Alto, CA 94301 Rosemont, IL 60018
Attn: Christine Ferra Attn: Venture Group
SIGNATURE PAGE TO AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
<PAGE>
Schedule A
----------
Schedule of Investors
---------------------
Crosspoint Venture Partners 1997
Accel VI L.P.
Accel Internet Fund II L.P.
Accel Keiretsu VI L.P.
Accel Investors `98 L.P.
Media Technology Ventures,
L.P.
Media Technology Ventures
Entrepreneurs Fund, L.P.
Montgomery & Associates LP
G&H Partners
Stanford University
Annabel J. Montgomery
As Trustee of the Annabel J.
Montgomery Revocable Trust
dated February 7, 1991 and
James W. Montgomery
Montgomery & Associates LP
J.P. Morgan Direct Venture
Capital Institutional Investors,
LLC
J.P. Morgan Direct Venture
Capital Private Investors
LLC
Intel Corporation
S-1
<PAGE>
Microsoft Corporation
Covad Communications
Investment Corp.
Crescendo World Fund, LLC
Eagle Ventures WF, LLC
Lunn-iBEAM, LLC
Peter B. Desnoes, IRA A/C
774-91015 Guarantee & Trust
Company, TTEE
Peter Desnoes
Liberty IB, Inc.
W. Michael Bowles
Larry Goldstein
A D. Fleener
Jeffrey A. Rodgers and Janna
Lund Rodgers, or their
successors, Trustees of The
Jeffrey and Janna Rodgers
Revocable Trust Dated July 24,
1998
Robert C. Hawk
Len Grossi
Fred Seegal
WS Investment Company 99B
Chris L. Dier
Bruce D. Lawler
S-2
<PAGE>
Tom Gillis
Jeremy Zullo
Nils Lahr
David Strehlow
Bob Davis
Philip Rosedale
Comdisco, Inc.
Sony Corporation of America
Cyber Commerce Limited
America Online, Inc.
S-3
<PAGE>
SCHEDULE B
CORPORATE NON DISCLOSURE AGREEMENT