EXHIBIT 2.3
INSWEB CORPORATION
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
THIS FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this
"AGREEMENT") is made and entered into as of January 24, 2001 by and among the
following parties (collectively, the "PARTIES"):
- - InsWeb Corporation, a Delaware corporation (the "COMPANY");
- - HUSSEIN A. ENAN ("ENAN");
- - DARRELL J. TICEHURST ("TICEHURST" and, together with Enan, the "FOUNDERS");
- - NATIONWIDE MUTUAL INSURANCE COMPANY, a mutual insurance company organized
under the laws of the State of Ohio ("NATIONWIDE");
- - SOFTVEN NO. 2 INVESTMENT ENTERPRISE PARTNERSHIP, a Japanese partnership
("SB1");
- - SOFTBANK VENTURES, INC., a Japanese corporation ("SB2");
- - SOFTBANK AMERICA INC., a [_______] corporation ("SB3" and, together with
SB1 and SB2, the "SB ENTITIES");
- - INSURANCE INFORMATION EXCHANGE, L.L.C., a Delaware limited liability
company ("IIX");
- - CENTURY CAPITAL PARTNERS, L.P., a Delaware limited partnership ("CCP");
- - MARSH & MCLENNAN RISK CAPITAL HOLDINGS LTD., a Delaware corporation
("M&M");
- - E.W. BLANCH HOLDINGS, INC., a Delaware corporation ("BLANCH" and, together
with Nationwide, SB1, SB2, SB3, IIX, CCP and M&M, the "PRIOR INVESTORS");
- - Intuit Insurance Services, Inc., a Virginia corporation ("INCA"); and
- - Intuit Inc., a Delaware corporation ("INDIGO" and, together with Inca, the
"NEW STOCKHOLDERS" and, together with Inca and the Prior Investors, the
"INVESTORS").
RECITALS
A. The Parties, other than the New Stockholders, are parties to that
certain Third Amended and Restated Investor Rights Agreement made and entered
into as of the 31st day of March, 1999 (the "PRIOR AGREEMENT").
B. The Parties desire to enter into this Agreement to (i) provide for
certain arrangements, including registration rights in respect of shares of
Common Stock (as defined below) being issued to the New Stockholders as
contemplated by that certain Asset Purchase Agreement among the Company and the
New Stockholders dated as of November [XX], 2000 (the "INCA ASSET AGREEMENT")
and (ii) amend and restate certain arrangements set forth in the Prior Agreement
(noting that certain provisions from the Prior Agreement which have terminated
due to the Company's initial public offering of the Common Stock (as defined
below) in July 1999 (the "IPO") are not included as part of this Agreement).
NOW, THEREFORE, in consideration of the mutual agreements, covenants and
conditions contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:
1. DEFINED TERMS.
As used in this Agreement, the following terms shall have the following
meanings:
(a) "ADVICE" has the meaning set forth in SECTION 3.13 below.
(b) "AFFILIATE" shall have the meaning for such term set forth in Rule
405 under the Securities Act.
(c) "BOARD" means the Board of Directors of the Company, as
constituted from time to time.
(d) "CEO" means the Chief Executive Officer of the Company, as that
office and duties thereof are defined in the Bylaws.
(e) "CHANGE IN CONTROL" means any of the following: (i) a merger or
consolidation in which the members of the Board prior to such merger or
consolidation do not constitute at least FIFTY PERCENT (50%) of the members of
the board of directors of the surviving or acquiring entity immediately
following such merger or consolidation; (ii) except in cases where the
pre-transaction stockholders of the Company own more than FIFTY PERCENT (50%) of
the surviving or acquiring entity, any (x) 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) or (y) sale,
transfer or other disposition of all or substantially all of the assets of the
Company; and (iii) any transaction in or by means of which one or more persons
acting in concert acquire, in the aggregate, more than FIFTY PERCENT (50%) of
the outstanding shares of Common Stock.
(f) "COMMON STOCK" means shares of the Common Stock, $0.001 par value
per share, of the Company.
(g) "DEMAND RIGHTS HOLDERS" means the following: (i) all Holders
holding shares of Common Stock (x) issued upon the conversion of shares of
Series A Stock, Series A-1 Stock, Series D Stock or Series E Stock and (y) then
outstanding and not registered; and (ii) all Holders of Indigo Common Stock.
(h) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and the regulations of
the SEC thereunder, all as in effect from time to time.
(i) "FOUNDER'S STOCK" means shares of Common Stock held by any Founder
or Founder's Transferee.
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(j) "FOUNDER'S TRANSFEREE" means CCP, M&M, Blanch and any other person
or entity to whom any Founder(s) transfer(s) at least 150,000 shares of Common
Stock, and any person or entity to whom any such Founder's Transferee(s)
transfer(s) at least 75,000 shares of Common Stock, in each case, as adjusted
for stock splits, combinations, recapitalizations, stock dividends and the like.
(k) "HOLDER" means any Investor, or any other holder of outstanding
Registrable Securities who acquires such securities in accordance with SECTION
3.10 hereof.
(l) "INDIGO COMMON STOCK" means the shares of Common Stock (i) issued
to Indigo, Inca or the permitted assignee(s) of Indigo pursuant to the Inca
Asset Agreement and (ii) then outstanding and not registered.
(m) "INDIGO DEMAND REGISTRATION" means a registration initiated
pursuant to SECTION 3.2 hereof by Indigo Holders holding in the aggregate not
less than TWENTY PERCENT (20%) of the Indigo Common Stock (excluding Indigo
Common Stock previously transferred in a public sale pursuant to a registration
or Rule 144 under the Securities Act).
(n) "INDIGO HOLDER" means any Holder holding shares of Indigo Common
Stock.
(o) "INDIGO RESTRICTED SELLING PERIOD" means the period commencing on
the date hereof and terminating immediately prior to the earlier of the
following: (i) the date which is EIGHTEEN (18) months after the date hereof;
(ii) the date on which Enan (considered in the aggregate with his Affiliates)
shall have transferred or requested the registration of, in the aggregate, more
than 2,100,000 shares of Common Stock (exclusive of any shares transferred prior
to the date of the Inca Asset Agreement), as adjusted for stock splits,
combinations, recapitalizations, stock dividends and the like; (iii) the date on
which Nationwide (considered in the aggregate with its Affiliates) shall have
transferred or requested the registration of, in the aggregate, more than
2,100,000 shares of Common Stock (exclusive of any shares transferred prior to
the date of the Inca Asset Agreement), as adjusted for stock splits,
combinations, recapitalizations, stock dividends and the like; (iv) the date on
which the SB Entities (considered in the aggregate with their Affiliates) shall
have transferred or requested the registration of, in the aggregate, more than
2,100,000 shares of Common Stock (exclusive of any shares transferred prior to
the date of the Inca Asset Agreement), as adjusted for stock splits,
combinations, recapitalizations, stock dividends and the like; (v) the
occurrence of any Change in Control; and (vi) any public announcement by the
Company regarding any potential Change in Control (but only if such announcement
identifies (x) the third party to the potential Change in Control transaction
and (y) the expected consideration for the Company or its stockholders resulting
from any such transaction).
(p) "INDIGO RESTRICTED VOTING PERIOD" means the period commencing on
the date hereof and terminating immediately prior to the earlier of the
following: (i) the date which is THREE (3) years after the date hereof; and (ii)
the occurrence of any Change in Control.
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(q) "INDIGO TRANSFEREE" means each person or entity to whom any Indigo
Holder(s) transfer(s) at least 400,000 shares of Indigo Common Stock, in each
case, as adjusted for stock splits, combinations, recapitalizations, stock
dividends and the like.
(r) "INITIATING HOLDERS" means the following: (i) any Demand Rights
Holder(s) holding in the aggregate not less than FORTY PERCENT (40%) of the
Common Stock (x) issued upon the conversion of shares of Series A Stock, Series
A-1 Stock, Series D Stock or Series E Stock and (y) then outstanding and not
registered; and (ii) any Indigo Holder(s) holding in the aggregate not less than
TWENTY PERCENT (20%) of the Indigo Common Stock (excluding Indigo Common Stock
previously transferred in a public sale pursuant to a registration or Rule 144
under the Securities Act).
(s) "PARTICIPATING HOLDERS" means all Holders, whether or not
Initiating Holders, who request that any Registrable Securities held by them be
included in any registration, qualification or compliance initiated pursuant to
SECTIONS 3.1, 3.2 OR 3.3 hereof.
(t) "PREFERRED HOLDERS" means holders of shares of Common Stock issued
upon the conversion of Preferred Stock.
(u) "PREFERRED STOCK" means shares of Series A Stock, Series A-1
Stock, Series B Stock, Series C Stock, Series D Stock and Series E Stock.
(v) "PREFERRED TRANSFEREE" means each person or entity to whom any
Preferred Holder(s) and/or Preferred Transferee(s) transfer(s) at least 15,000
shares of Common Stock issued upon conversion of shares of Preferred Stock, in
each case, as adjusted for stock splits, combinations, recapitalizations, stock
dividends and the like.
(w) "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by filing with the SEC a registration statement in
compliance with the Securities Act and the declaration or ordering by the SEC of
the effectiveness of such registration statement.
(x) "REGISTRABLE SECURITIES" means the following: (i) shares of Common
Stock issued upon conversion of shares of the Preferred Stock; (ii) Founder's
Stock; (iii) shares of Indigo Common Stock; and (iv) shares of Common Stock
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 or in replacement of, any of the securities referred to in
clauses (i), (ii) or (iii) above or this clause (iv); PROVIDED, HOWEVER, that
shares of Common Stock or other securities shall only be treated as Registrable
Securities (A) if and so long as they have not been (I) sold to or through a
broker or dealer or underwriter in a public distribution or a public securities
transaction or (II) sold in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act under Section 4(1)
thereof so that all transfer restrictions and restrictive legends with respect
thereto, if any, are removed upon the consummation of such sale and (B) until
the later of (x) such time as the Holder would be able to sell all of its
Registrable Securities in a three (3) month period pursuant to Rule 144 under
the Securities Act or (y) JULY 22, 2001 (PROVIDED, that with respect to shares
of Indigo Common Stock, such date shall be the date which is FIVE (5) years
after the date hereof).
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(y) "SEC" means the United States Securities and Exchange Commission
or any successor agency.
(z) "SECURITIES ACT" means the Securities Act of 1933, as amended, or
any similar federal statute and the rules and the regulations of the SEC
thereunder, all as in effect from time to time.
(aa) "SERIES A STOCK" means shares of Series A Preferred Stock, $0.001
par value, of the Company as the same were outstanding prior to the IPO.
(bb) "SERIES A-1 STOCK" means shares of Series A-1 Preferred Stock,
$0.001 par value, of the Company as the same were outstanding prior to the IPO.
(cc) "SERIES B STOCK" means shares of Series B Preferred Stock, $0.001
par value, of the Company as the same were outstanding prior to the IPO.
(dd) "SERIES C STOCK" means shares of Series C Preferred Stock, $0.001
par value, of the Company as the same were outstanding prior to the IPO.
(ee) "SERIES D STOCK" means shares of Series D Preferred Stock, $0.001
par value, of the Company as the same were outstanding prior to the IPO.
(ff) "SERIES E STOCK" means shares of Series E Preferred Stock, $0.001
par value, of the Company as the same were outstanding prior to the IPO.
(gg) "SUSPENSION NOTICE" has the meaning set forth in SECTION 3.13
below.
2. AMENDMENT TO THE PRIOR AGREEMENT.
Without affecting the modifications to prior agreements as set forth in
Section 2 of the Prior Agreement (as well as any waivers, modifications or
terminations of arrangements set forth in any such agreements which may have
occurred after the effective date of the Prior Agreement), the Prior Agreement
is amended as set forth below, effective as of the date hereof.
3. REGISTRATION RIGHTS.
3.1 COMPANY REGISTRATION.
(a) REGISTRATION RIGHTS. If, at any time or from time to time, the
Company shall determine to register any of its securities for its own account or
for the account of a security holder or security holders exercising their
respective demand registration rights pursuant to SECTION 3.2 hereof or
otherwise (other than a registration relating solely to employee stock option,
stock purchase or similar plans, a registration relating solely to an SEC Rule
145 transaction, or a registration on any other form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities), the Company
will:
(i) promptly give to each Holder written notice thereof; and
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(ii) subject to SECTION 3.1(b), include in such registration (and
any related qualifications under blue sky laws or other compliance), and in any
underwriting related thereto, all the Registrable Securities specified in a
written request or requests, made within THIRTY (30) days after receipt of such
written notice from the Company, by any Holder, which written request may
specify all or a part of such Holder's Registrable Securities; PROVIDED,
HOWEVER, that the Company will not be required to include in any registration
statement in respect of any such registration any shares of Indigo Common Stock
if such registration statement becomes effective prior to the termination of the
Indigo Restricted Selling Period.
(b) UNDERWRITING. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders, identifying the managing underwriter(s) (to
the extent known by the Company), as a part of the written notice given pursuant
to SECTION 3.1(a)(i). In such event, the right of any Holder to registration
pursuant to this SECTION 3.1 shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the managing underwriter or managing underwriters selected for such
underwriting by the Company (or by the Initiating Holders who have demanded such
registration as provided for in SECTION 3.2(b)). Notwithstanding any other
provision of this SECTION 3.1, if the managing underwriter(s) determine(s) that
marketing factors require a limitation of the number of shares to be
underwritten and so advise(s) the Company, the managing underwriter(s) may limit
the number of Registrable Securities to be included in the registration and
underwriting to not less than THIRTY PERCENT (30%) of the securities included
therein (based on aggregate market value). The Company shall advise all
Participating Holders of any such limitation, and the number of shares of
Registrable Securities that may be included in the registration and underwriting
shall be allocated among the Participating Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by each
such Holder at the time of filing the registration statement; PROVIDED, HOWEVER,
that in a registration initiated pursuant to SECTION 3.2 hereof, the allocation
of the shares to be included in such registration shall be determined pursuant
to SECTION 3.2(b) hereof. With respect to any "selling Holder" that is selling
securities hereunder and which is a partnership or corporation, in the event of
any underwriter cutback, the partners, retired partners, stockholders or
Affiliates of such "selling 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 allocation with respect to such "selling Holder" shall be based upon the
aggregate amounts of shares carrying registration rights owned by all entities
and individuals included in such "selling Holder," as defined in this sentence.
No securities excluded from the underwriting by reason of such underwriter's
marketing limitation shall be included in such registration. If any
Participating Holder disapproves of the terms of the underwriting, such Holder
may elect to withdraw therefrom by written notice to the Company and the
managing underwriter(s). The Registrable Securities so withdrawn shall also be
withdrawn from registration, and such withdrawn Registrable Securities shall not
be transferred in a public distribution prior to ONE HUNDRED EIGHTY (180) days
after the effective date of such registration. If by the withdrawal of such
Registrable Securities a greater number of Registrable Securities held by other
Participating Holders may be included in such registration (up to the maximum of
any limitation imposed by
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the managing underwriter(s)), the Company shall offer to all Participating
Holders who have requested inclusion of their Registrable Securities in the
registration the right to include additional Registrable Securities in the same
proportion/method used in determining the underwriter limitation in this SECTION
3.1(b).
(c) RIGHT TO TERMINATE REGISTRATION. The Company shall have the right
to terminate or withdraw any registration initiated by it under this SECTION 3.1
prior to the effectiveness of such registration, whether or not any Holder has
elected to include Registrable Securities in such registration.
3.2 DEMAND REGISTRATION.
(a) DEMAND FOR REGISTRATION. If the Company shall receive from
Initiating Holders a written demand that the Company effect a registration of
all or a part of the Registrable Securities held by such Initiating Holders, the
Company will:
(i) promptly give each other Holder written notice thereof; and
(ii) as soon as practicable, use its diligent best efforts to
effect such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualifications under
applicable blue sky or other state securities laws and appropriate compliance
with exemptive regulations issued under the Securities Act and any other
applicable governmental requirements or regulations) as may be so requested and
as would permit or facilitate the sale and distribution of all or such portion
of such Initiating Holders' Registrable Securities as are specified in such
demand, together with all or such portion of the Registrable Securities of any
other Holders joining in such request pursuant to SECTION 3.1(a)(ii); PROVIDED,
HOWEVER, the Company shall not be obligated to effect any such registration,
qualification or compliance pursuant to this SECTION 3.2:
(A) Unless, after the Company gives the notice specified in
SECTION 3.2(a)(i), the Holders propose to sell a number of shares of Registrable
Securities having an aggregate proposed offering price of at least $10,000,000;
PROVIDED, HOWEVER, that if the registration at issue is an Indigo Demand
Registration, then this clause (A) shall not apply;
(B) After the Company has effected ONE (1) such registration
pursuant to this SECTION 3.2, pursuant to which all of the Registrable
Securities included in such registration have been sold; PROVIDED, HOWEVER, that
this clause (B) shall not apply to an Indigo Demand Registration;
(C) In the instance of an Indigo Demand Registration, (i) if
the registration statement in respect of such registration would become
effective during the Indigo Restricted Selling Period, (ii) after the Company
has effected TWO (2) Indigo Demand Registrations pursuant to this SECTION 3.2 or
(iii) after the Company has effected both (x) ONE (1) Indigo Demand Registration
pursuant to this SECTION 3.2 and (y) another registration pursuant to this
SECTION 3.2 in which at least THIRTY PERCENT (30%) of the Indigo Common Stock is
sold; or
(D) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration,
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qualification or compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act.
Subject to the foregoing clauses (A) through (D), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practicable; PROVIDED, HOWEVER, that if the Company shall
furnish to the Initiating Holder(s) a certificate signed by the CEO or the
President of the Company stating that in the good faith judgment of the Board it
would be seriously detrimental to the Company and its stockholders for such
registration statement to be filed at the date filing would be required
hereunder and that it is therefore essential to defer the filing of such
registration statement, the Company's obligation to use its diligent best
efforts to file a registration statement shall be deferred for a period not to
exceed NINETY (90) days from the receipt of the demand from the Initiating
Holders; PROVIDED; FURTHER that the Company shall not exercise such right to
defer a filing more often than once in any TWELVE (12) month period.
(b) UNDERWRITING. If the Initiating Holders intend to distribute the
Registrable Securities covered by their demand by means of an underwriting, they
shall so advise the Company as a part of their demand made pursuant to SECTION
3.2(a), and the Company shall include such information in the written notices
referred to in SECTIONS 3.1(a)(i) and 3.2(a)(i). In such event, the right of any
Holder to registration pursuant hereto shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting. The Company, together with all
Participating Holders, shall enter into an underwriting agreement in customary
form with the managing underwriter or managing underwriters selected for such
underwriting by a majority in interest of the Initiating Holders (which managing
underwriter(s) shall be reasonably acceptable for the Company). Notwithstanding
any other provision of this SECTION 3.2, if the managing underwriter(s)
determine(s) that marketing factors require a limitation of the number of shares
to be underwritten and so advise(s) the Initiating Holders in writing, the
Initiating Holders shall so advise all Participating Holders, and the number of
shares of Registrable Securities that may be included in the registration and
underwriting shall be allocated in the following manner: FIRST, if the
registration has been initiated by Indigo Holders, among the Indigo Holders in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by each such Holder at the time of filing the registration
statement; SECOND, among the Initiating Holders and the other Demand Rights
Holders who are Participating Holders in proportion, as nearly as practicable,
to the respective amounts of Registrable Securities held by each such Holder at
the time of filing the registration statement; and THEREAFTER, among the other
Participating Holders in proportion, as nearly as practicable, to the respective
amounts of Registrable Securities held by each such Holder at the time of filing
the registration statement. With respect to any "selling Holder" that is selling
securities hereunder and which is a partnership or corporation, in the event of
any underwriter cutback, the partners, retired partners, stockholders or
Affiliates of such "selling 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 allocation with respect to such "selling Holder" shall be based upon the
aggregate amounts of shares carrying registration rights owned by all entities
and individuals included in such "selling Holder," as defined in this sentence.
No securities excluded from the registration by reason of such underwriter's
marketing limitation shall be included in such registration. If any
Participating Holder disapproves of the terms of the underwriting, such
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Holder may elect to withdraw therefrom by written notice to the Company, the
managing underwriter(s) and the Initiating Holders. The Registrable Securities
so withdrawn shall also be withdrawn from registration, and such withdrawn
Registrable Securities shall not be transferred in a public distribution prior
to ONE HUNDRED EIGHTY (180) days after the effective date of such registration.
If by the withdrawal of such Registrable Securities a greater number of
Registrable Securities held by other Participating Holders may be included in
such registration (up to the maximum of any limitation imposed by the managing
underwriter(s)), the Company shall offer to all Participating Holders who have
requested inclusion of their Registrable Securities in the registration the
right to include additional Registrable Securities in the same proportion/method
used in determining the underwriter limitation in this SECTION 3.2(b).
(c) OTHER SHARES. If (i) the underwriter has not limited the number of
Registrable Securities to be underwritten and (ii) the registration at issue
will permit the Company to include securities for its own account or for the
account of other holders of the Company's securities (E.G., if the registration
is on Form S-3 and the Company, for securities to be sold for its own account,
qualifies for use of Form S-3 for primary sales of its securities), the Company
may include such securities in such registration if the underwriter so agrees
(and only to the extent that any such inclusion would not cause the underwriter
to limit the number of Registrable Securities to be underwritten).
3.3 FORM S-3 REGISTRATION.
(a) The Company will use its best efforts to maintain its
qualification for the registration of its securities on Form S-3 (or a successor
form which allows inclusion or incorporation of substantial information by
reference to other documents filed with the SEC). During any period in which the
Company is so qualified, any Holder shall have the right to request an unlimited
number of registrations of Registrable Securities on Form S-3 (or such successor
form), subject only to: (i) compliance with the procedures specified in SECTION
3.2(b); (ii) the requirement that the Holders requesting such registration
propose to dispose of Registrable Securities having an aggregate proposed
offering price of not less than $1,000,000; and (iii) the limitation that the
Holders may not demand more than TWO (2) such registrations on Form S-3 under
this SECTION 3.3 during any TWELVE (12) month period; PROVIDED, HOWEVER, that
the Company will not be required to include in any such registration any shares
of Indigo Common Stock if the registration statement in respect of such
registration becomes effective prior to the termination of the Indigo Selling
Restricted Period. The Company shall promptly give notice to all Holders of the
receipt of a request for registration pursuant to this SECTION 3.3 and shall
provide a reasonable opportunity for other Holders to participate in the
registration. Subject to the foregoing, the Company will use its diligent best
efforts promptly to effect the registration (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualifications under blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act and any
other governmental requirements and regulations) of all Registrable Securities
on Form S-3 to the extent requested by the Holder or Holders thereof.
(b) Notwithstanding the foregoing, the Company shall not be obligated
to take any action pursuant to this SECTION 3.3: (i) during the period starting
with the date SIXTY (60) days prior to the filing of, and ending on a date SIX
(6) months following the effective date
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of, a registration statement filed or to be filed by the Company (other than a
registration relating solely to employee stock option, stock purchase or similar
plans, a registration relating solely to an SEC Rule 145 Transaction or any
other registration which is not appropriate for the registration of Registrable
Securities), PROVIDED that the Company is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective;
(ii) in any particular jurisdiction in which the Company would be required to
execute a general consent to service of process in effecting such registration,
qualification or compliance unless the Company is already subject to service in
such jurisdiction and except as may be required by the Securities Act; or (iii)
if the Company shall furnish to the Holders requesting such registration a
certificate signed by the CEO or the President of the Company stating that in
the good faith judgment of the Board it would be seriously detrimental to the
Company and its stockholders for such registration statement to be filed at the
date filing would be required hereunder and that it is therefore essential to
defer the filing of such registration statement, in which event the Company's
obligation to use its diligent best efforts to file a registration statement
shall be deferred for a period not to exceed NINETY (90) days from the receipt
of the request to file such registration; PROVIDED, that the Company shall not
exercise such right to defer a filing more than once in any TWELVE (12) month
period.
3.4 EXPENSES OF REGISTRATION. All expenses incurred in connection with any
registration, qualification or compliance pursuant to SECTIONS 3.1, 3.2 OR 3.3,
including without limitation, all registration, filing and qualification fees,
blue sky fees and expenses, printing expenses, escrow fees, accounting fees
incidental to or required by such registration (including, without limitation,
any special audits), the fees and disbursements of counsel for the Company with
respect to such registration and the reasonable fees and disbursements of ONE
(1) counsel for the Participating Holders in such registration shall be borne by
the Company; PROVIDED, HOWEVER, that the following expenses shall be borne by
the Holders participating in such registration:
(a) All fees and disbursements of counsel for the Holders other than
those specifically required herein to be borne by the Company; and
(b) Underwriters' fees, discounts and commissions relating to
Registrable Securities being sold in such registration.
If a registration proceeding begun pursuant to SECTION 3.2 is withdrawn by the
Initiating Holders, the expenses of such registration proceeding shall be borne
by the Holders, pro rata, according to the number of shares of Registrable
Securities requested to be registered by Holders who requested to participate in
such registration unless the Initiating Holders agree to forfeit their right to
ONE (1) demand registration pursuant to SECTION 3.2; PROVIDED, HOWEVER, that if
such request is withdrawn after the Holders learn of materially adverse
information concerning the Company, which information was not known to the
Initiating Holders at the time of such request, then the Holders shall not be
required to pay any such expenses (which shall be payable by the Company) and
such withdrawn request shall not be counted as a request for purposes of SECTION
3.2 or as a withdrawn demand for purposes of this SECTION 3.4.
3.5 OBLIGATIONS OF THE COMPANY. Whenever required under this SECTION 3 to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
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(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and keep such registration statement
effective for up to ONE HUNDRED EIGHTY (180) days or until the Holder or Holders
have completed the distribution relating thereto, whichever first occurs;
PROVIDED, HOWEVER, that in the case of an Indigo Demand Registration, Indigo
shall have the right to request that the registration statement in respect of
such registration be on Form S-3 and intended (and prepared) for use to offer
securities on a continuous or delayed basis, and if such request is made, the
Company shall use its best efforts to keep such registration statement effective
until the earlier of the date (A) when all such Registrable Securities are sold
or (B) that is eighteen (18) months from the date of effectiveness of such
registration statement, PROVIDED that Rule 415 under the Securities Act, or any
successor rule, permits an offering on a continuous or delayed basis, and
PROVIDED, FURTHER, that applicable rules under the Securities Act governing the
obligation to file a post-effective amendment permit, in lieu of filing a
post-effective amendment which (I) includes any prospectus required by Section
10(a)(3) of the Securities Act or (II) reflects facts or events representing a
material or fundamental change in the information set forth in the registration
statement, the incorporation by reference in the registration statement of
information required to be included in (I) and (II) above from periodic reports
filed pursuant to Section 13 or 15(d) of the Exchange Act.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best 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 state or jurisdiction unless the Company is
already subject to service in such state or jurisdiction and except as may be
required by the Securities Act.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a
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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) Use its best efforts to cause all Registrable Securities
registered to be listed on each securities exchange on which the Common Stock is
then listed (or trading in the same to be quoted by any quotation system then
quoting trading in the Common Stock).
(h) Use its best efforts to provide a transfer agent and registrar for
all Registrable Securities registered and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
(i) Use its best efforts to furnish, at the request of Holders
requesting registration of a majority of the Registrable Securities pursuant to
this SECTION 3 that are to be sold in the offering, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this SECTION 3, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, (i) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders selling the
Registrable Securities and (ii) a letter dated such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Holders selling the Registrable Securities.
3.6 INDEMNIFICATION.
(a) The Company will indemnify each Holder participating in any
registration effected pursuant to this SECTION 3, each of their respective
officers, directors, partners and agents, and each person controlling such
Holder within the meaning of the Securities Act, and each underwriter, if any,
and each person who controls any underwriter within the meaning of the
Securities Act, against all claims, losses, damages and liabilities (or actions
or settlements in respect thereof) arising out of or based on (i) any untrue
statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular or other similar document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or (ii) any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, or (iii) any violation (or alleged violation) by
the Company of any federal or state law, rule or regulation applicable to the
Company in connection with any such registration, qualification or compliance.
The Company will reimburse each such person, each such officer, director,
partner, agent and controlling person, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action; PROVIDED that the Company will not be liable in any
such case to the extent that any such claim, loss, damage or liability is caused
by any untrue statement (or alleged untrue statement) or omission (or alleged
omission) based upon written
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information furnished to the Company in an instrument duly executed by such
Holder or underwriter and stated to be specifically for use therein.
(b) Each Holder will, if securities held by or issuable to such Holder
are included in such registration, qualification or compliance, indemnify the
Company, each of its directors, each of its officers who sign such registration
statement, each underwriter, if any, of the Company's securities covered by such
registration statement, each person who controls the Company or such underwriter
within the meaning of the Securities Act and each other such Holder, each of its
officers, directors, partners and agents and each person controlling such other
Holder within the meaning of the Securities Act against all claims, losses,
damages and liabilities (or actions or settlements in respect thereof) arising
out of or based on (i) any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement or prospectus, or
(ii) any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, and will
reimburse the Company, such Holders, such directors, officers, persons or
underwriters for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement or prospectus in reliance upon
and in conformity with written information furnished to the Company by an
instrument duly executed by such Holder and stated to be specifically for use
therein; PROVIDED that in no event shall the liability of any Holder pursuant to
this SECTION 3.6(b) exceed the amount of the gross proceeds received by such
person from the sale of securities in such registration.
(c) Each party entitled to indemnification under this SECTION 3.6 (the
"INDEMNIFIED PARTY") shall give notice to the party required to provide such
indemnification (the "INDEMNIFYING PARTY") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; PROVIDED that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and PROVIDED, FURTHER that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this SECTION 3, unless the failure to give notice is
materially prejudicial to an Indemnifying Party's ability to defend such action.
No Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation. An
Indemnified Party shall have the right to retain ONE (1) separate counsel, with
the reasonable fees and expenses to be paid by the Indemnifying Party, if
representation of such Indemnified Party would be inappropriate due to actual
differing interests between such Indemnified Party and the Indemnifying Party;
PROVIDED, HOWEVER, that all Indemnified Parties with the same actual differing
interests from the Indemnifying Party shall be entitled to payment for only ONE
(1) counsel collectively. The Indemnifying Party shall pay the expenses of the
Indemnified Party as they become due and payable.
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(d) The indemnity provisions contained in SECTIONS 3.6(a) and 3.6(b)
shall not apply to amounts paid in settlement of any claim, loss, damage,
liability or action if such settlement is effected without the consent of the
Indemnifying Party.
(e) If the indemnification provided for in this SECTION 3.6 is held by
a court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any losses, claims, damages or liabilities referred to herein, the
Indemnifying Party, in lieu of indemnifying such Indemnified Party thereunder,
shall to the extent permitted by applicable law contribute to the amount paid or
payable by such Indemnified Party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other
in connection with the violations(s) that resulted in such loss, claim, damage
or liability, as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by a court of law by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Indemnifying Party or by
the Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
PROVIDED, that in no event shall any contribution by a Holder hereunder exceed
the proceeds from the offering received by such Holder.
3.7 INFORMATION BY HOLDER. Each Holder whose securities are included in any
registration shall furnish in writing to the Company such information regarding
such Holder and the distribution proposed by such Holder as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this SECTION 3.
3.8 SALE WITHOUT REGISTRATION. At the time of any transfer of any
Registrable Securities which shall not be registered under the Securities Act,
the Company may require, as a condition of allowing such transfer, that the
holder or transferee furnish to the Company: (a) such information as is
reasonably necessary in order to establish that such transfer may be made
without registration under the Securities Act; and (b) except for transfers
proposed to be made in accordance with SEC Rule 144 or in connection with
distributions to partners of Investors which are partnerships, at the expense of
the holder or transferee, an opinion of counsel, reasonably satisfactory in form
and substance to the Company, to the effect that such transfer may be made
without registration under the Securities Act; PROVIDED, HOWEVER, that (i)
nothing contained in this SECTION 3.8 shall relieve the Company from complying
with any request for registration, qualification or compliance made pursuant to
the other provisions of this SECTION 3 and (ii) notwithstanding any provisions
of this Agreement to the contrary, any transfer of Indigo Common Stock to any
subsidiary (direct or indirect) of either Indigo or Inca will be effective
solely upon notice to the Company of the same so long as any such subsidiary
agrees to be bound by the provisions of this Agreement.
3.9 RULE 144 REPORTING. With a view to making available to the Holders the
benefits of certain rules and regulations of the SEC which may permit the sale
of the Registrable Securities to the public without registration (E.G. SEC Rule
144) or pursuant to registration on Form S-3 (or a successor form which allows
inclusion or incorporation of substantial information
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by reference to other documents filed with the SEC), the Company agrees to use
its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times;
(b) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) So long as a Holder owns any Registrable Securities, furnish to
such Holder forthwith upon request: (i) a written statement by the Company as to
its compliance with the reporting requirements of SEC Rule 144 and of the
Securities Act and the Exchange Act; (ii) a copy of the most recent annual or
quarterly report of the Company; and (iii) such other reports and documents so
filed by the Company as may reasonably be requested in availing such person of
any rule or regulation of the SEC permitting the sale of any such securities
without registration.
3.10 TRANSFER OF RIGHTS. The rights to cause the Company to register
securities granted by the Company under SECTIONS 3.1, 3.2 AND 3.3 hereof may not
be assigned to a transferee or assignee other than a Founder's Transferee, a
Preferred Transferee or an Indigo Transferee, in each case who agrees in writing
to be bound by the provisions of this SECTION 3, without the written consent of
the Company, PROVIDED that a transfer may be made to the corporate successor or
an Affiliate of a Holder without the consent of the Company if (a) such transfer
may otherwise be effected in accordance with applicable securities laws and (b)
the transferee shall agree to be bound by all of the provisions of this SECTION
3.
3.11 DELAY OF REGISTRATION. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this SECTION 3.
3.12 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. Without the prior
written consent of those Holders, other than Founders, holding a majority of the
then outstanding Registrable Securities held by all Holders (other than
Founders), the Company shall not (from and after the date of this Agreement)
enter into any agreement with any holder or prospective holder of any securities
of the Company which would allow such holder or prospective holder to (1)
require the Company to effect a registration or (2) include any securities in
any registration filed under SECTION 3.1, 3.2 OR 3.3 hereof, unless, in the
instance of clause (2) and 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 diminish the amount of
Registrable Securities which are included in such registration; PROVIDED,
HOWEVER, that without the prior written consent of Indigo Holders holding a
majority of the then outstanding Registrable Securities held by all Indigo
Holders, the Company shall not enter into any agreement with any holder or
prospective holder of any securities of the Company or modify this Agreement in
any manner so as to (i) allow any such holder to require the Company to include
any such securities in an Indigo Demand Registration (unless such inclusion of
such securities will not diminish the amount of Indigo Common Stock which is
included in such Indigo Demand Registration), (ii) provide any such holder with
rights greater than those given to Indigo Holders in any
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registration under SECTIONS 3.1(a) or 3.3(a) hereof or (iii) adversely affect
the rights of the Indigo Holders hereunder (other than in a manner which is
identical to the effect of such agreement or modification on the other Holders
(other than Founders) of outstanding Registrable Securities).
3.13 SUSPENSION OF DISPOSITIONS. Each Holder agrees that, upon receipt of
any notice (a "SUSPENSION NOTICE") from the Company of the happening of any
event of the kind described in Section 3.5(f) above, such Holder will forthwith
discontinue disposition of its Registrable Securities until such Holder's
receipt of copies of an appropriate supplemented or amended prospectus, or until
such Holder is advised in writing by the Company (an "ADVICE") that the use of
the prospectus may be resumed, and, if so directed by the Company, such Holder
will deliver to the Company all copies, other than permanent file copies then in
such Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such Suspension Notice. The Company shall
exercise its best efforts to provide the Holders with the Advice or an
appropriate supplemented or amended prospectus as soon as reasonably possible.
If the Company shall give any such Suspension Notice, the time periods regarding
the effectiveness of registration statements set forth in Section 3.5(a) shall
be extended by the number of days during the period from and including the date
of the giving of the Suspension Notice to and including the date when each
Participating Holder covered by such registration statement shall have received
copies of an appropriate supplemented or amended prospectus or the Advice.
4. CERTAIN COVENANTS RELATING TO INDIGO COMMON STOCK
4.1 INDIGO RIGHTS REGARDING THE BOARD. For so long as Indigo, Inca and
their respective Affiliates own, in the aggregate, not less than FIVE PERCENT
(5%) of the issued and outstanding shares of Common Stock, (i) the Company and
each Investor agrees to use its best efforts, at the request of Indigo, to cause
and maintain the election of one representative of Indigo to the Board (so long
as such representative is a member of Indigo's executive management team and is
reasonably acceptable to the Company (noting that the Company may, in its
discretion, determine that the absence of prior service on a public company's
board of directors would render a particular representative unacceptable) - in
any event an "INDIGO NOMINEE") and, (ii) without limiting the foregoing, the
Company (through the Board) shall nominate and recommend to the Company's
stockholders, at each meeting of the Company's stockholders, an Indigo Nominee
for election to the Board. If Indigo, Inca and their respective Affiliates own,
in the aggregate at anytime, less than FIVE PERCENT (5%) of the issued and
outstanding shares of Common Stock, then Indigo shall, subject to the fiduciary
duties of the Indigo Nominee, exercise commercially reasonable efforts to cause
any Indigo Nominee to tender his or her resignation within SIXTY (60) days of a
written request by the Company. In all events, each person serving at anytime as
an Indigo Nominee shall be a recipient of the same indemnification, compensation
and insurance arrangements made available to any other member of the Board (and
each such person is an intended third party beneficiary of this provision).
Notwithstanding any provision of this Agreement to the contrary, Indigo shall
not be required to exercise any rights with respect to having an Indigo Nominee
on the Board (or otherwise make available a representative for service on the
Board). If an Indigo Nominee has not been elected or appointed to the Board as
of the date of this Agreement, Indigo shall exercise its commercially reasonable
efforts to work with the Company to have one member of Indigo's executive
management team (who is reasonably acceptable to the Company) nominated for
election to the
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Board at the first meeting of the Company's stockholders following the date of
this Agreement at which an election of such directors is held.
4.2 RESTRICTED SELLING PERIOD. During the Indigo Restricted Selling Period,
Indigo and Inca shall not, and Indigo and Inca shall cause their respective
Affiliates not to, sell or transfer any shares of Indigo Common Stock to any
third party through private transactions, registered offerings, Rule 144 sales
or any other transactions, offerings or sales; PROVIDED, HOWEVER, that shares of
Indigo Common Stock may be transferred among Indigo, Inca and any subsidiaries
(direct or indirect) of Indigo or Inca during the Indigo Restricted Selling
Period so long as any such transferees agree to be bound by the provisions of
this Agreement (including, without limitation, the provisions of this SECTION 4
as the same would be applied to Indigo or Inca). Except as expressly provided in
this Agreement, and subject to compliance with applicable securities laws, no
other restrictions shall apply to any transfers of Indigo Common Stock.
4.3 ABILITY TO STAY AT OR BELOW 19.5%. Notwithstanding any other provision
of this Agreement to the contrary (but subject to compliance with applicable
securities laws), each of Indigo, Inca and their respective Affiliates may, at
any time, transfer such number of shares of Common Stock as shall be necessary
to keep the holdings of Common Stock, in the aggregate, of Indigo, Inca and
their respective Affiliates to an amount which is no greater than NINETEEN AND
ONE-HALF PERCENT (19.5%) of the total number of issued and outstanding shares of
Common Stock. The Company or Indigo or Inca, as the case may be, will provide
prompt notice to Indigo and Inca or the Company, as the case may be (I.E., as
soon as the Company or Indigo or Inca becomes aware), of any occurrence,
circumstance or event that might reasonably be expected to result in Indigo,
Inca and their respective Affiliates holding, in the aggregate, more than
NINETEEN AND ONE-HALF PERCENT (19.5%) of the total number of issued and
outstanding shares of Common Stock. Without limiting any other rights of Indigo,
Inca and their respective Affiliates, in the event that the Company effects a
repurchase of any of its shares of Common Stock, the Company will, concurrently
therewith, offer to purchase from Indigo, Inca and their respective Affiliates,
on the same terms and conditions, a number of shares of Common Stock sufficient
to keep Indigo, Inca and their respective Affiliates from holding, in the
aggregate, more than NINETEEN AND ONE-HALF PERCENT (19.5%) of the total number
of issued and outstanding shares of Common Stock. This SECTION 4.3 shall not
limit in any way the obligations of Indigo and Inca under SECTION 4.5(a)(i)
below.
4.4 NASDAQ NATIONAL MARKET. The Company will exercise its best efforts to
cause any shares of Indigo Common Stock sold pursuant to Rule 144 under the
Securities Act to be listed on each securities exchange on which the Common
Stock is then listed (or trading in the same to be quoted by any quotation
system then quoting trading in the Common Stock) provided that Indigo shall give
prompt notice of such sale and provide all relevant information regarding such
sale to the Company.
4.5 RESTRICTED VOTING PERIOD. During the Indigo Restricted Voting Period,
each of Indigo and Inca shall (and shall cause their respective Affiliates to):
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(a) Not, directly or indirectly, effect, or seek, offer or propose to
effect (whether publicly or otherwise), any of the following without the prior
approval of a majority of the members of the Board:
(i) Any direct or indirect acquisition, including by tender
offer, of Common Stock or any direct or indirect rights or options to acquire
Common Stock where the same (assuming the exercise in full of all such rights
and options) would result in Indigo, Inca and their respective Affiliates
holding, in the aggregate, more than NINETEEN AND ONE-HALF PERCENT (19.5%) of
the total number of issued and outstanding shares of Common Stock;
(ii) Other than with respect to the election of members of the
Board, "SOLICIT," or become a "PARTICIPANT," directly or indirectly, in any
"SOLICITATION" of "PROXIES" (as such terms are defined under Regulation 14A of
the Exchange Act) from any holder of securities of the Company in connection
with any vote or other action on any matter or agree or announce its intention
to vote with any person undertaking a "SOLICITATION" or seek to advise,
encourage or influence any person with respect to the voting of any securities
of the Company; or
(iii) Other than with respect to the election of members of the
Board, otherwise act, alone or in concert with others, to control or seek to
control or influence or seek to influence the management or the Board; PROVIDED,
HOWEVER, that nothing herein shall affect in any way the right of an Indigo
Nominee to act in that person's capacity as a Board member;
(b) Except with respect to any election of members of the Board or any
transaction or arrangement involving an Enumerated Person (as such term is
defined from time to time pursuant to the Distribution Agreement contemplated by
the Inca Asset Agreement), vote its shares of Common Stock on any matter put to
a vote of the holders of the Common Stock in the same proportion as the other
holders of issued and outstanding Common Stock (I.E., the holders of Common
Stock other than Indigo, Inca and their respective Affiliates); and
(c) Provide the Company with a right of last refusal (the "LAST
RIGHT") with respect to any transfer of shares of Common Stock in which shares
constituting an amount in excess of SIX AND ONE-HALF PERCENT (6.5%) of the total
number of issued and outstanding shares of Common Stock would be transferred in
a single private transaction, or a related series of private transactions
(aggregating, for this purpose, all shares transferred or proposed for transfer
by Indigo, Inca and their respective Affiliates), to any single third party and
its Affiliates (a "PRIVATE TRANSFER"). Without limitation, a Private Transfer
shall not include the following (without limiting the provisions of SECTION 4.2
above): (i) any transfers among Indigo, Inca and the subsidiaries (direct or
indirect) of Indigo or Inca; (ii) any transfers or sales pursuant to a
registration; and (iii) any sale to the public pursuant to SEC Rule 144. In the
event of any proposed Private Transfer, the Company shall be provided with at
least THIRTY (30) days' advance notice (which notice - a "LAST RIGHT NOTICE" -
shall identify the third party(ies) at issue, the number of shares of Common
Stock to be sold, the price and the terms and conditions of the proposed Private
Transfer). In the event the Company elects to exercise its Last Right, (x) the
Company may do so by delivering notice back to the party(ies) providing the
Company with the Last Right Notice (the "COMPANY NOTICE"), so long as the
Company Notice is received by such
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party(ies) within TWENTY (20) days of delivery of the Last Right Notice to the
Company, and (y) the parties shall thereafter exercise their best efforts to
close the Last Right transaction within TEN (10) days of the Company's delivery
of the Company Notice (HOWEVER, the Company's failure to make payment of the
purchase price within such TEN (10) day period, assuming performance by the
party(ies) providing the Company with the Last Right Notice of all actions
reasonably required of it/them to close such transaction, shall be deemed a
breach of this Agreement). If the proposed purchase price in the Private
Transfer includes consideration other than cash, the Company, if it elects to
exercise the Last Right, may, in lieu thereof, deliver the cash equivalent value
of the non-cash consideration (with the amount of the cash equivalent to be
determined by the agreement of the Board and Indigo acting in good faith).
Payment of the purchase price by the Company, in the event it elects to exercise
the Last Right, will be made by wire transfer of immediately available funds to
one or more accounts to be provided in the Last Right Notice. In the event that
the Company elects to exercise the Last Right and fails to consummate the
transaction as contemplated hereby because it fails to make payment of the
purchase price within the TEN (10) day period noted above in this SECTION 4.5
(assuming the party(ies) providing the Company with the Last Right Notice have
within such period performed all actions reasonably required of it/them to close
such transaction), the provisions of this SECTION 4.5 shall thereupon terminate
and be without further force or effect (without limiting any of the remedies of
Indigo, Inca or any of their respective Affiliates). If the Company elects not
to exercise the Last Right, Indigo, Inca or their respective Affiliate(s), as
applicable, may, during the thirty (30) day period following the expiration of
the TWENTY (20) day period noted above in this SECTION 4.5, consummate the
Private Transfer upon terms no more favorable to the transferee(s) than those
specified in the Last Right Notice. If Indigo, Inca or their respective
Affiliate(s), as applicable, do not consummate the Private Transfer within such
THIRTY (30) day period, the right provided hereunder shall be deemed to be
revived with respect to the subject shares of Indigo Common Stock.
This SECTION 4.5 shall not be binding on any transferee of Indigo Common Stock
other than Affiliates of Indigo or Inca.
4.6 NO INSPECTION RIGHT. Notwithstanding any provision in this Agreement to
the contrary, neither Indigo, Inca nor any of their respective Affiliates shall
have any inspection rights to examine the Company's books of account and records
except any rights (i) granted to Indigo, Inca or any of their respective
Affiliates under the Distribution Agreement (as defined in the Inca Asset
Agreement) or (ii) provided under applicable law; PROVIDED, HOWEVER, that
nothing herein shall affect in any way the right of any Indigo Nominee to act in
that person's normal capacity as a Board member, including the right to have
appropriate access to the Company's books of account, records and assets and
information regarding the Company (I.E., on the same basis as any other member
of the Board).
5. MISCELLANEOUS.
5.1 EFFECTIVENESS. With reference to SECTION 8.5 of the Prior Agreement,
this Agreement shall not become effective (and shall not be binding upon any of
the Parties) unless and until it is executed by the following Parties (at which
time this Agreement shall become binding on all Parties): (i) each of the
Founders; (ii) the holders of a majority of the Registrable
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Securities (as defined, for this purpose, in the Prior Agreement); (iii) each of
the New Stockholders; and (iv) the Company.
5.2 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, made and to be performed entirely within the State of California,
except to the extent that Delaware corporate law is applicable.
5.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties hereto.
5.4 ENTIRE AGREEMENT. This Agreement (including any Schedule hereto)
constitutes the full and entire understanding and agreement among the parties
with regard to the subject matter hereof.
5.5 SEPARABILITY. Any invalidity, illegally or limitation of the
enforceability with respect to any Investor of any one or more of the provisions
of this Agreement, or any part thereof, whether arising by reason of the law of
any such Investor's domicile or otherwise, shall in no way affect or impair the
validity, legality or enforceability of this Agreement with respect to other
Investors. In case any provision of this Agreement shall be invalid, illegal, or
unenforceable, it shall to the extent practicable, be modified so as to make it
valid, legal and enforceable and to retain as nearly as practicable the intent
of the parties, and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
5.6 AMENDMENT AND WAIVER. 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, either retroactively or prospectively, and either for a
specified period of time or indefinitely), only with the written consent of (i)
the Company, (ii) the Founders and (ii) the Holders of a majority of the
Registrable Securities then outstanding which have not been sold to the public
(other than Registrable Securities held by Founders); PROVIDED, HOWEVER, that
(1) without the prior written consent of Indigo Holders holding a majority of
the then outstanding Registrable Securities held by all Indigo Holders, this
Agreement may not be amended, and the performance of this Agreement may not be
waived, in any manner so as to (a) allow any person or entity to require the
Company to include any securities in an Indigo Demand Registration (unless such
inclusion of such securities will not diminish the amount of Indigo Common Stock
which is included in such Indigo Demand Registration), (b) provide any person or
entity with rights greater than those given to Indigo Holders in any
registration under SECTIONS 3.1(a) or 3.3(a) hereof or (c) adversely affect the
rights of the Indigo Holders hereunder (other than in a manner which is
identical to the effect of such agreement or modification on the other Holders
(other than Founders) of outstanding Registrable Securities), and (2) no
amendment or waiver of any provision of SECTION 4 shall (x) be effective unless
the holders of a majority of the Indigo Common Stock then outstanding and the
Company shall provide their written consents to the same and (y) require any
consent of the Founders or the Holders of Registrable Securities other than the
Indigo Holders and (3) no amendment or waiver of any provision of this Agreement
which would adversely affect an individual Investor or its permitted assignee(s)
in a manner or
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degree different from other Investors and their permitted assignees shall be
effective without the written consent of the Investor and/or assignee(s) so
affected. No such amendment or waiver shall reduce the aforesaid percentage of
Registrable Securities the Holders of which are required to consent to any
waiver or supplemental agreement without the consent of the Holders of all of
such Registrable Securities, as appropriate. Any amendment or waiver effected in
accordance with this SECTION 5.6 shall be binding upon each Holder of
Registrable Securities, each future holder of all such securities and the
Company. Upon the effectuation of each such amendment or waiver, the Company
shall promptly give written notice thereof to the record holders of the
Registrable Securities who have not previously consented thereto in writing.
5.7 DELAYS OR OMISSIONS. No delay or omission to exercise any right, power
or remedy accruing to any Investor or any subsequent holder of any Registrable
Securities upon any breach, default or noncompliance of the Company under this
Agreement shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of any similar breach, default or noncompliance
thereafter occurring. It is further agreed that any waiver, permit, consent or
approval of any kind or character on an Investor's part of any breach, default
or noncompliance under this Agreement or any waiver on an Investor's part of any
provisions or conditions of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing, and that
all remedies, either under this Agreement, by law or otherwise afforded to the
Investors shall be cumulative and not alternative.
5.8 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery, including delivery by a recognized courier service, or
upon delivery by facsimile or on the fifth (5th) business day following mailing
by first-class mail, postage prepaid, addressed (a) if to a Investor, at such
Investor's address as set forth on SCHEDULE 1 hereto, or at such other address
as such Investor shall have furnished to the Company in writing, or (b) if to
the Company, at the address of its principal executive office, or at such other
address as the Company shall have furnished to the Investors in writing.
5.9 TITLES AND SUBTITLES. The titles of the Sections and Subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
5.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
[REST OF THIS PAGE INTENTIONALLY BLANK]
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COUNTERPART SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
The foregoing Agreement is hereby executed as of the date first above
written.
INSWEB CORPORATION
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
------------------------------------
HUSSEIN A. ENAN
------------------------------------
------------------------------------
DARRELL T. TICEHURST
------------------------------------
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COUNTERPART SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
The foregoing Agreement is hereby executed as of the date first above
written.
NATIONWIDE MUTUAL INSURANCE COMPANY
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
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COUNTERPART SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
The foregoing Agreement is hereby executed as of the date first above
written.
INSURANCE INFORMATION EXCHANGE, L.L.C.
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
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COUNTERPART SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
The foregoing Agreement is hereby executed as of the date first above
written.
CENTURY CAPITAL PARTNERS, L.P.
By CCP Capital Partners, Inc.,
its General Partner
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
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COUNTERPART SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
The foregoing Agreement is hereby executed as of the date first above
written.
MARSH & McLENNAN RISK
CAPITAL HOLDINGS LTD.
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
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COUNTERPART SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
The foregoing Agreement is hereby executed as of the date first above
written.
E. W. BLANCH HOLDINGS, INC.
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
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COUNTERPART SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
The foregoing Agreement is hereby executed as of the date first above
written.
SOFTVEN NO. 2 INVESTMENT
ENTERPRISE PARTNERSHIP
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
SOFTBANK VENTURES, INC.
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
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COUNTERPART SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
The foregoing Agreement is hereby executed as of the date first above
written.
SOFTBANK AMERICA INC.
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
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COUNTERPART SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
The foregoing Agreement is hereby executed as of the date first above
written.
INTUIT INC.
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
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COUNTERPART SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
The foregoing Agreement is hereby executed as of the date first above
written.
INTUIT INSURANCE SERVICES, INC.
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
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SCHEDULE 1
Hussein A. Enan
InsWeb Corporation
11290 Pyrites Way
Suite 200
Gold River, CA 95670
Darrell T. Ticehurst
InsWeb Corporation
11290 Pyrites Way
Suite 200
Gold River, CA 95670
Nationwide Mutual Insurance Company
One Nationwide Plaza
Columbus, OH 43216
Insurance Information Exchange, L.L.C.
c/o AMS Services, Inc.
900 Chelmsford Road
Lowell, MA 01851
Century Capital Partners, L.P.
c/o Century Capital Management, Inc.
One Liberty Square
Boston, MA 02109
Marsh & McLennan Risk Capital Holdings, Ltd.
1166 Avenue of the Americas
New York, New York 10036
E.W. Blanch Holdings, Inc.
500 North Akard
Suite 4500
Dallas, TX 75201
SOFTVEN No. 2 Investment Enterprise Partnership
1-16-8 Nihonbashi-Kakigaracho
Chuo-ku, Tokyo 103 0014, Japan
SOFTBANK Ventures, Inc.
1-16-8 Nihonbashi-Kakigaracho
Chuo-ku, Tokyo 103 0014, Japan
-32-
SOFTBANK America Inc.
300 Delaware Avenue, Suite 900
Wilmington, DE 19801
INTUIT INC.
2632 Marine Way
Mountain View, California 94043
Attn: Senior Vice President, Corporate Strategy
Copy to:
Intuit Inc.
2632 Marine Way
Mountain View, California 94043
Attn: General Counsel
INTUIT INSURANCE SERVICES, INC.
c/o Intuit Inc.
2632 Marine Way
Mountain View, California 94043
Attn: Senior Vice President, Corporate Strategy
Copy to:
Intuit Inc.
2632 Marine Way
Mountain View, California 94043
Attn: General Counsel
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