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EXHIBIT 10.7
YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
MARCH 3, 2000
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AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT is made
as of the 3rd day of March, 2000, by and among YOUcentric, Inc., a North
Carolina corporation (the "Company"), the holders of the Company's Series A
Preferred Stock listed on Schedule A hereto (the "Series A Investors"), the
holders of the Company's Series B Preferred Stock listed on Schedule B hereto
(the "Series B Investors") (each of the Series A Investors and the Series B
Investors is herein referred to as an "Investor"), Haas Financial Advisors, Inc.
("Haas"), FleetBoston Robertson Stephens Inc. and the founders listed on
Schedule C hereto (each a "Founder").
RECITALS
WHEREAS, the Company, the Series A Investors and the Founders
are parties to an Investors' Rights Agreement, dated as of May 13, 1999, as
previously amended (the "Original Agreement");
WHEREAS, the Company and the Series B Investors are parties to
the Series B Preferred Stock Purchase Agreement of even date herewith (the
"Series B Agreement"); and
WHEREAS, in order to induce the Company, the Series A
Investors and the Founders to approve the issuance of the Series B Preferred
Stock and to induce the Series B Investors to invest funds in the Company
pursuant to the Series B Agreement, the Investors, the Founders and the Company
hereby agree that this Agreement shall amend and restate the Original Agreement
and shall govern the rights of the Investors and the Founders to cause the
Company to register shares of Common Stock issued or issuable to them and
certain other matters as set forth herein;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Section 1:
(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.
(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.
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(d) The term "Initial Offering" means the Company's first underwritten
public offering of its Common Stock under the Act.
(e) The term "Major Investor" means (i) a Series A Investor holding that
number of shares of Common Stock issued or issuable upon conversion of
the Series A Preferred Stock which, when multiplied by $1.9233 (as
adjusted for stock splits, stock dividends, recapitalizations or the
like) equals at least $2,000,000; and (ii) a Series B Investor holding
that number of shares of Common Stock issued or issuable upon
conversion of the Series B Preferred Stock which, when multiplied by
$12.02 (as adjusted for stock splits, stock dividends,
recapitalizations or the like) equals at least $2,000,000.
(f) The term "1934 Act" means the Securities Exchange Act of 1934, as
amended.
(g) 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.
(h) The term "Registrable Securities" means (i) the Common Stock issuable
or issued upon conversion of the Series A Preferred Stock and/or the
Series B Preferred Stock held by the Investors, the Common Stock
issuable or issued upon exercise of the warrant to purchase One Hundred
Twenty-four Thousand Seven Hundred Eighty-two (124,782) shares of
Common Stock previously issued to Haas and shares of Common Stock
issued to FleetBoston Robertson Stephens Inc. in connection with the
closing(s) of the Company's offering and sale of the Series B Preferred
Stock; and (ii) 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)
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.
(i) 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.
(j) The term "SEC" shall mean the Securities and Exchange Commission.
1.2 Request for Registration.
(a) Subject to the conditions of this Section 1.2, if the Company shall
receive at any time after the earlier of (i) three (3) years after the
date of this Agreement or (ii) six (6) months after the effective date
of the Initial Offering, a written request from the Holders of fifty
percent (50%) 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
$5,000,000, 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 limitations of this Section 1.2, use best efforts to
effect, as soon as reasonably practicable, the registration under the
Act of all Registrable Securities that the Holders request to
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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 a majority in interest of the
Initiating Holders (which underwriter or underwriters shall be
reasonably acceptable to the Company). Notwithstanding any other
provision of this Section 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 by the SEC; 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
(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
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of Directors of the Company, it would be seriously detrimental to the
Company and its shareholders for such registration statement to be
effected at such time, including, without limitation, adversely
affecting a then-existing plan to sell shares of the Company in a
public offering, in which event the Company shall have the right to
defer such filing for a period of not more than ninety (90) days after
receipt of the request of the Initiating Holders, 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.
(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 shareholders 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 contain substantially the same information as would be
required to be included in a registration statement covering the sale
of the Registrable Securities, or a registration in which the only
Common Stock being registered is Common Stock issuable upon conversion
of debt securities that are also being registered), the Company shall,
at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given to the
Company within fifteen (15) days 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 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 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 the Company (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 underwriters determine
in their sole discretion will not jeopardize the success
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of the offering by the Company. If the total amount of securities,
including Registrable Securities, requested by shareholders 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 requested to be included therein 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-five percent (25%) 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 shareholder's securities are included, or (ii) notwithstanding
(i) above, if the number of Registrable Securities included in any
Company registration is so limited, no other shareholders may sell
shares in such registration other than the Company. For purposes of the
preceding parenthetical concerning apportionment, for any selling
shareholder that is a Holder of Registrable Securities and that is a
partnership or corporation, the partners, retired partners and
shareholders 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 from a Holder or Holders of Registrable Securities 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 best efforts to effect, as soon as reasonably 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 then available
for such offering by the Holders;
(ii) within thirty (30) days prior to or
ninety (90) days following a registration effected pursuant to Section
1.3;
(iii) if the Holders propose to sell
Registrable 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;
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(iv) 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 shareholders for such Form S-3
Registration to be effected at such time, including, without
limitation, adversely affecting a then-existing plan to sell shares of
the Company in a public offering, in which event the Company shall have
the right to defer the filing of the Form S-3 registration statement
for a period of not more than ninety (90) days after receipt of the
request of the Holder or Holders under this Section 1.4; provided,
however, that the Company shall not utilize this right more than once
in any twelve month period;
(v) if the Company has, within the
twelve (12) month period preceding the date of such request, already
effected two (2) registrations on Form S-3 for the Holders pursuant to
this Section 1.4; or
(vi) in any particular jurisdiction in
which the Company would be required to qualify to do business or to
execute a general consent to service of process in effecting such
registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other securities so
requested to be registered as soon as reasonably 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 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 best efforts to cause such
registration statement to become effective, and, upon the request of
the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for a period of
up to (i) one hundred eighty (180) days for registrations on Form S-3
for the Holders pursuant to Section 1.4, (ii) ninety (90) days for all
other registrations, or (iii) if earlier in any registration, 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 of Registrable Securities covered by such
registration statement such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements
of the Act, and such other documents as they may reasonably request in
order to facilitate the disposition of Registrable Securities owned by
them;
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(d) use best efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of
such jurisdictions as shall be reasonably requested by the Holders of
Registrable Securities covered by such registration statement, 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, if any; 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 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 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 the reasonable fees and
disbursements of one special counsel for the selling Holders 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 or Section 1.4 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, in the case of a registration
requested under Section 1.2, the Holders of a majority of the
Registrable Securities agree to forfeit their right to one demand
registration pursuant to Section 1.2, provided, however, that if at the
time of such withdrawal, the Holders have learned of a material adverse
change in the condition, business, or prospects of the Company from
that known to the Holders at the time of their
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request and have withdrawn the request with reasonable promptness
following disclosure by the Company of such material adverse change,
then the Holders shall not be required to pay any of such expenses and
shall retain their rights pursuant to Section 1.2 and 1.4.
1.8 Delay of Registration. No Holder shall have
any right to obtain or seek an injunction restraining or otherwise
delaying any such registration as the result of any controversy that
might arise with respect to the interpretation or implementation of
this Section 1.
1.9 Indemnification. In the event any
Registrable Securities 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
shareholders 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 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.
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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 net 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 such loss, liability,
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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 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 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 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, partner, limited partner, retired
partner or shareholder 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, holds at least twenty-five percent (25%) of
such Holder's shares of Registrable Securities immediately prior to
such transfer (subject to appropriate adjustment for
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stock splits, stock dividends, combinations and other
recapitalizations), provided: (a) the Company is, not more than twenty
(20) days 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 Offering and
ending on the date specified by the Company and the managing
underwriter (such period not to exceed one hundred twenty (120) 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 Registrable Securities, 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
Registrable Securities, 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 foregoing
provisions of this Section 1.13 shall apply only to the Company's
initial public offering of equity securities, shall not apply to the
sale of any shares to an underwriter pursuant to an underwriting
agreement, and shall only be applicable to the Holders if all officers
and directors and greater than one percent (1%) shareholders of the
Company enter into similar agreements. Notwithstanding the foregoing,
any discretionary waiver or termination of the restrictions of any such
agreements by the Company or representatives of the underwriters shall
apply to all persons subject to such agreements pro rata based on the
number of shares subject to such agreements. The Company shall use its
best efforts in its negotiations with the lead underwriter in the
Company's Initial Offering to limit the market stand-off period for all
shareholders of the Company to not more than one hundred twenty (120)
days. The underwriters in connection with the Company's Initial
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
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or securities of every other person subject to the foregoing restriction) until
the end of such period.
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 the Initial Offering or, as
to any Holder, such earlier time 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 Major Investor:
(a) as soon as reasonably 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 shareholder'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 reasonably practicable, but in any event within forty-five
(45) days after the end of each of the first three (3) quarters of each
fiscal year of the Company, an unaudited income statement, statement of
cash flows for such fiscal quarter and an unaudited balance sheet as of
the end of such fiscal quarter.
(c) within thirty (30) days of the end of each month, an unaudited income
statement and statement of cash flows and balance sheet for and as of
the end of such month, in reasonable detail;
(d) as soon as reasonably practicable, but in any event at least thirty
(30) days prior to the end of each fiscal year, a budget and business
plan for the next fiscal year, prepared on a monthly basis, including
balance sheets, income statements and statements of cash flows for such
months and, as soon as prepared, any other budgets or revised budgets
prepared by the Company;
(e) with respect to the financial statements called for in subsections
(b)and (c) of this Section 2.1, an instrument executed by the Chief
Financial Officer or President of the Company certifying that such
financials were prepared in accordance with GAAP consistently applied
with prior practice for earlier periods (with the exception of
footnotes that may be required by GAAP) and fairly present the
financial condition of the Company and its results of operation for the
period specified, subject to year-end audit adjustment; and
(f) 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 reasonably request,
provided, however, that the Company shall not be obligated under this
subsection (f) or
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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
Major Investor, 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 reasonably requested
by such 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.
2.3 Termination of Information and Inspection
Covenants. The covenants set forth in Sections 2.1 and 2.2 shall
terminate as to Major Investors and be of no further force or effect
upon the consummation of the Initial Offering.
2.4 Right of First Offer. Subject to the terms
and conditions specified in this paragraph 2.4, the Company hereby
grants to each Investor 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, 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 such Investor deems
appropriate.
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 Investor in accordance
with the following provisions.
(a) The Company shall deliver a notice in accordance with Section 4.5
("Notice") to the 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, each 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 Common Stock issued and held, or issuable
upon conversion of the Series A Preferred Stock and Series B Preferred
Stock then held by such 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 Investor that elects to purchase all the shares available
to it (a "Fully Exercising Investor") of any other 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 Investors were entitled
to subscribe but which were not subscribed for by the Investors that is
equal to the proportion that the number of shares of Common Stock
issued and held, or issuable upon conversion of Series A Preferred
Stock and Series B Preferred Stock then held by such Fully Exercising
Investor bears to the total number of shares of Common Stock issued and
held, or issuable upon conversion of the Series A Preferred Stock and
Series B Preferred Stock then held by all Fully Exercising Investors
who wish to purchase some of the unsubscribed Shares.
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(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 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
thirty (30) 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 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 up to five million one hundred
thirty-five thousand eighty (5,135,080) shares of Common Stock (or
options or restricted stock awards therefor) to employees, directors
and consultants for the primary purpose of soliciting or retaining
their services; (ii) the issuance of securities pursuant to a bona fide
underwritten public offering of shares of Common Stock, registered
under the Act, which results 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) up to three hundred thousand (300,000) shares of Common Stock
issued or issuable upon exercise of warrants or other securities or
rights pursuant to equipment lease financings or bank credit
arrangements approved by the Board of Directors; (v) shares of Common
Stock whose issuance is approved of by holders of a majority of the
Series A Preferred Stock and Series B Preferred Stock (voting together
as a single class); or (vi) up to one hundred twenty-four thousand
seven hundred eighty two (124,782) shares of Common Stock issued or
issuable upon exercise of warrants previously issued to Haas.
2.5 Section 1202 Compliance. The Company hereby
covenants and agrees with each Series A Investor that the Company
shall:
(a) use its best efforts to comply with the reporting and record-keeping
requirements of Section 1202 of the Internal Revenue Code of 1986, as
amended (the "Code"), and any regulations promulgated thereunder;
(b) upon the reasonable request of any Series A Investor, conduct a
reasonable investigation into the question of whether the shares of
Common Stock and Preferred Stock (and the shares of Common Stock issued
or issuable upon conversion thereof) held by the Series A Investors
remain "Qualified Small Business Stock" within the meaning of the Code,
and to deliver thereafter to such Holder a duly executed Certificate of
Representation in substantially the form hereto as Schedule D (the
"QSBS Certificate"). If the Company is unable to deliver an executed
QSBS Certificate because the representation statement number 2 therein
is inaccurate, the Company covenants and agrees to deliver a statement
explaining the reasons for such inaccuracy; and
(c) use its best efforts to not take any action that would cause the
Preferred Stock (or the Common Stock issuable upon conversion thereof)
to lose its status as "qualified small business stock"
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within the meaning of the Code, including, without limitation, taking
any of the following actions:
(i) purchasing an amount of its own stock
(within the meaning of Section 1202(c)(3) of the Code) having an
aggregate value at the time(s) of purchase exceeding five percent (5%)
of the aggregate value of all of its outstanding stock determined as of
the start of such period;
(ii) conducting any of the following businesses
(as defined for purposes of Section 1202(e)(3) of the Code):
A. any business involving the
performance of services in the fields of law, accounting, actuarial
science, performing arts, athletics or brokerage services;
B. any banking or insurance business;
C. any farming business (including the
business of raising or harvesting trees);
D. any business involving the
production or extraction of natural resources with respect to which a
deduction is allowable under Section 613 or 613A of the Code; or
E. any business of operating a hotel,
motel, restaurant or similar establishment;
(iii) permitting more than ten percent (10%) of
the value of its assets to consist of stock issued by other companies
(other than stock of companies that qualify as subsidiaries of the
Company within the meaning of Section 1202(e)(5) of the Code or stock
that is held as working capital or reasonably expected to be sold
within two years to finance research and experimentation within the
meaning of Section 1202(e)(6) of the Code;
(iv) permitting more than ten percent (10%) of
the value of its assets to consist of real property that is not used in
the active conduct of a qualified trade or business within the meaning
of Section 1202(e)(7) of the Code;
(v) making an election under Section 936 of the
Code (relating to the Puerto Rico and possessions tax credit) or
permitting a subsidiary to make such an election; or
(vi) in a single transaction or series of related
transactions, raising capital through the issuance of securities or the
incurrence of indebtedness if such transaction or series of related
transactions would cause the Company to fail to satisfy the active
business requirement set forth in Section 1202(e)(1) of the Code by
virtue of holding excess cash or investment assets.
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For purposes of the foregoing, any valuation or other
determination (including, without limitation, a determination that a
specific course of action does not constitute the conduct of a business
described in Section 2.5(b)(ii) above) made by the Company's Board of
Directors in good faith or for which there was, at the time made, a
reasonable basis in law or fact shall be conclusive.
2.6 Board Representation. At each annual meeting
of the shareholders of the Company, or at any meeting of the
shareholders of the Company at which members of the Board of Directors
of the Company are to be elected, or whenever members of the Board of
Directors are to be elected by written consent, the Founders, the
Series A Investors and the Series B Investors agree to vote all of
their shares of the capital stock of the Company now owned or hereafter
acquired so as to elect:
(a) With respect to the one (1) member of the Company's Board of Directors
that the Restated Articles of Incorporation provide is to be elected by
the holders of Series A Preferred Stock, one (1) member of the
Company's Board of Directors designated by entities affiliated with
Technology Crossover Management III, L.L.C. (collectively, "TCV");
(b) With respect to the one (1) member of the Company's Board of Directors
that the Restated Articles of Incorporation provide is to be elected by
the holders of Series B Preferred Stock, one (1) member of the
Company's Board of Directors designated by entities affiliated with
First Union Investors, Inc. (collectively, "First Union");
(c) With respect to the four (4) members of the Company's Board of
Directors that the Restated Articles of Incorporation provide are to be
elected by the holders of Common Stock, four (4) members of the
Company's Board of Directors designated by the holders of a majority of
the Common Stock; and
(d) With respect to the members of the Company's Board of Directors that
the Restated Articles of Incorporation provide are to be elected by the
holders of Series A Preferred Stock, Series B Preferred Stock and
Common Stock, voting together as a single class on an as-converted
basis and not as separate series, one (1) independent member of the
Company's Board of Directors designated by the Board of Directors and
approved by TCV.
Any director of the Company may be removed from the board in
the manner allowed by law and the Company's Articles of Incorporation
and Bylaws, but with respect to a director designated pursuant to
subsections 2.6(a), 2.6(b), 2.6(c) and 2.6(d) above, only upon the vote
or written consent of the shareholders entitled to designate such
director.
2.7 Board Expenses. The Company shall reimburse
all non-employee directors for their reasonable expenses to attend the
meetings of the Company's Board of Directors.
2.8 Vesting Schedule. Options to purchase shares
of the Company's Common Stock issued pursuant to the Company's 1999
Equity Compensation Plan shall be subject to vesting at an annual rate
of twenty percent (20%), except for such options for which a
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different vesting rate is approved unanimously by the Company's Board
of Directors, which shall be subject to vesting at such different rate.
2.9 Termination of Certain Covenants. The
covenants set forth in Sections 2.4, 2.6, 2.7 and 2.8 shall terminate
and be of no further force or effect upon the consummation of the sale
of securities pursuant to a bona fide, firmly underwritten public
offering of shares of common stock, registered under the Act, which
results in proceeds to the Company of at least $20,000,000 or as
provided under applicable law.
2.10 Regulatory Requirements. In the event of any
reasonable determination by First Union that, by reason of any existing
or future Federal or state rule, regulation, guideline, order, request
or directive (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) relating to its status
as an affiliate of a national bank (collectively, a "Regulatory
Requirement"), it is effectively restricted or prohibited from holding
any of the shares of capital stock of the Company (including any shares
of capital stock or other securities distributable to First Union in
any merger, reorganization, readjustment or other reclassification of
such shares), the Company and the other parties hereto shall take such
action as expeditiously as possible, as may be deemed reasonably
necessary by First Union to permit First Union to comply with such
Regulatory Requirement. Such action to be taken may include, without
limitation, the Company's authorization of one or more new classes of
nonvoting or otherwise restricted capital stock and the modification or
amendment of the Articles of Incorporation or any other documents or
instruments executed in connection with the shares held by First Union.
First Union shall give written notice to the Company of any such
determination and the action or actions necessary to comply with such
Regulatory Requirement.
3. Intentionally Deleted.
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 North Carolina
as applied to agreements among North Carolina residents entered into
and to be performed entirely within North Carolina.
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.
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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 three
days after 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.
4.7 Entire Agreement; Amendments and Waivers.
The Original Agreement is hereby terminated and of no further force or
effect. This Agreement (including the Schedules hereto, if any)
constitutes the full and entire understanding and agreement among the
parties with regard to the subjects hereof and thereof. 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, TCV and First Union; provided, however, that in
the event that such amendment or waiver adversely affects the
obligations and/or rights of the Founders in a different manner than
the other Holders, such amendment or waiver shall also require the
written consent of the holders of a majority in interest of the
Founders. Notwithstanding the foregoing, Subsection 2.6(b) above may be
amended or waived only with the written consent of First Union. 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 were 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.
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SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
YOUCENTRIC, INC.
By: /s/ THOMAS FEDELL
Name: Thomas Fedell
Title: CEO
Mailing Address:
Southpark Towers, 6000 Fairview Road
Suite 405
Charlotte, NC 28210
Attention: Don DeLoach
Phone: (704) 643-1000
Fax: (704) 643-1090
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
21
FOUNDERS
/s/ TOM FEDELL
Tom Fedell
/s/ ROBERT KEAR
Robert Kear
/s/ MARK LOGAN
Mark Logan
/s/ KARL JOHNSON
Karl Johnson
/s/ WELLS TIEDEMAN
Wells Tiedeman
Mailing Address:
YOUcentric, Inc.
Southpark Towers, 6000 Fairview Road
Suite 405
Charlotte, NC 28210
Phone: (704) 643-1000
Fax: (704) 643-1090
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
22
SERIES A INVESTORS:
TCV III (GP)
a Delaware General Partnership
By: Technology Crossover Management III, L.L.C.,
Its: General Partner
By: /s/ ROBERT C. BENSKY
Name: Robert C. Bensky
Title: Chief Financial Officer
TCV III, L.P.
a Delaware Limited Partnership
By: Technology Crossover Management III, L.L.C.,
Its: General Partner
By: /s/ ROBERT C. BENSKY
Name: Robert C. Bensky
Title: Chief Financial Officer
TCV III (Q), L.P.
a Delaware Limited Partnership
By: Technology Crossover Management III, L.L.C.,
Its: General Partner
By: /s/ ROBERT C. BENSKY
Name: Robert C. Bensky
Title: Chief Financial Officer
TCV III Strategic Partners, L.P.
a Delaware Limited Partnership
By: Technology Crossover Management III, L.L.C.,
Its: General Partner
By: /s/ ROBERT C. BENSKY
Name: Robert C. Bensky
Title: Chief Financial Officer
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
23
Mailing Address:
Technology Crossover Ventures
56 Main Street, Suite 210
Millburn, NJ 07041
Attention: Robert C. Bensky
Phone: (973) 467-5320
Fax: (973) 467-5323
with a copy to:
Technology Crossover Ventures
575 High Street, Suite 400
Palo Alto, CA 94301
Attention: C. Toms Newby III
Phone: (650) 614-8207
Fax: (650) 614-8222
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
24
SERIES B INVESTORS:
FIRST UNION INVESTORS, INC.
By: /s/ DAVID J. SCANLAN
Name: David J. Scanlan
Title: Vice President
Mailing Address:
First Union Investors, Inc.
One First Union Center, TW-5
301 South College Street, 5th Floor
Charlotte, NC 28288
Attention: David Scanlan
Scott Harrison
Phone: (704) 374-4657
Fax: (704) 374-6711
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
25
SERIES B INVESTORS:
RS COINVESTMENT FUND LLC
By: /s/ JOSEPH J. PIAZZA
Name: Joseph J. Piazza
Title: Managing Director
Mailing address:
Attn: Dale Haithcock
555 California St. Suite 2600
San Francisco, CA 94104
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
26
SERIES B INVESTORS:
BAYVIEW 2000 LP
By: /s/ DANA WELCH
Name: Dana Welch
Title: CAO
Mailing address:
555 California St. Suite 2600
San Francisco, CA 94104
Attn: Jennifer Sherrill
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
27
SERIES B INVESTORS:
GREYHOUND CROSSOVER FUND LP
By: /s/ RON POLLACK
Name: Ron Pollack
Title: General Partner
Mailing address:
33 North Garden Avenue, Suite 750
Clearwater, FL 33767
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
28
SERIES B INVESTORS:
WILLIAM JAMES BELL 1993 TRUST
By: /s/ WILLIAM JAMES BELL
Name: William James Bell
Title: Trustee
Mailing address:
10539 Bellagio Road
Los Angeles, CA 90077
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
29
SERIES B INVESTORS:
/s/ CLARK CALLANDER
---------------------------
Name: Clark Callander
Mailing address:
2815 Satt Street
San Francisco, CA 94123
415/693-3294
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
30
SERIES B INVESTORS:
/s/ DALE R. HAITHCOCK
---------------------------
Name: Dale R. Haithcock
Mailing address:
814 Meadow Creek Court
Walnut Creek, CA 94596
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
31
SERIES B INVESTORS:
/s/ JOSEPH J. PIAZZA
---------------------------
Name: Joseph J. Piazza
Mailing address:
240 Madrana Avenue
Belvedere, CA 94920
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
32
SERIES B INVESTORS:
/s/ SALIM RESHWAN
----------------------------
Name: Salim Reshwan
Mailing address:
241 Lafayette Circle #8
Lafayette, CA 94549
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
33
SERIES B INVESTORS:
/s/ MARSHALL SENK
---------------------------
Name: Marshall Senk
Mailing address:
P.O. Box 29493
San Francisco, CA 94129
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
34
SERIES B INVESTORS:
/s/ MICHAEL J. ROSSO
---------------------------
Name: Michael J. Rosso
Mailing address:
2525 Larkin Street, #302
San Francisco, CA 94109
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
35
SERIES B INVESTORS:
/s/ GREG RICKMAN
---------------------------
Name: Greg Rickman
Mailing address:
555 California Street, Suite 2600
San Francisco, CA 94104
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
36
SERIES B INVESTORS:
/s/ JEFF BECKER
---------------------------
Name: Jeff Becker
Mailing address:
21 Boulderwood Drive
Livingston, NJ 07039
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
37
SERIES B INVESTORS:
Seligman Communications and Information
Fund, Inc.
By J. & W. Seligman & Co., Incorporated,
its investment adviser
By /s/ RICHARD R. SCHMALTZ
---------------------------
Name: Richard R. Schmaltz
Title: Managing Director
Seligman New Technologies Fund, Inc.
By J. & W. Seligman & Co. Incorporated,
its investment adviser
By /s/ RICHARD R. SCHMALTZ
---------------------------
Name: Richard R. Schmaltz
Title: Managing Director
Seligman Investment Opportunities(Master)
Fund-NTV Portfolio
By J. & W. Seligman & Co. Incorporated,
its investment adviser
By /s/ RICHARD R. SCHMALTZ
---------------------------
Name: Richard R. Schmaltz
Title: Managing Director
Mailing Address:
100 Park Avenue - 8th Floor
New York, NY 10017
Attn: James M. Curtis
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
38
SERIES B INVESTORS:
TCV III (GP)
a Delaware General Partnership
By: Technology Crossover Management III,
L.L.C.,
Its: General Partner
By: /s/ ROBERT C. BENSKY
---------------------------
Name: Robert C. Bensky
Title: Chief Financial Officer
TCV III, L.P.
a Delaware Limited Partnership
By: Technology Crossover Management III,
L.L.C.,
Its: General Partner
By: /s/ ROBERT C. BENSKY
---------------------------
Name: Robert C. Bensky
Title: Chief Financial Officer
TCV III (Q), L.P.
a Delaware Limited Partnership
By: Technology Crossover Management III,
L.L.C.,
Its: General Partner
By: /s/ ROBERT C. BENSKY
---------------------------
Name: Robert C. Bensky
Title: Chief Financial Officer
TCV III Strategic Partners, L.P.
a Delaware Limited Partnership
By: Technology Crossover Management III,
L.L.C.,
Its: General Partner
By: /s/ ROBERT C. BENSKY
---------------------------
Name: Robert C. Bensky
Title: Chief Financial Officer
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
39
Mailing Address:
Technology Crossover Ventures
56 Main Street, Suite 210
Millburn, NJ 07041
Attention: Robert C. Bensky
Phone: (973) 467-5320
Fax: (973) 467-5323
with a copy to:
Technology Crossover Ventures
575 High Street, Suite 400
Palo Alto, CA 94301
Attention: C. Toms Newby III
Phone: (650) 614-8207
Fax: (650) 614-8222
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
40
SERIES B INVESTORS:
DAIN RAUSCHER WESSELS INVESTORS, L.L.C.
By: Dain Rauscher Incorporated
Its: Managing Member
By: /s/ MARY ZIMMER
---------------------------
Its: Director, DRW Finance & Adm
Dain Rauscher Wessels, a division of
Dain
Rauscher Incorporated
Mailing Address:
Dain Rauscher Wessels Investors
Attn: Mary Zimmer
60 South Sixth Street
Minneapolis, MN 55402
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
41
SERIES B INVESTORS:
_______________________________
By: /s/ ARNOLD S. HOFFMAN
---------------------------
Name: Arnold S. Hoffman
Title: General Partner
Mailing Address:
Palm Partners VI
1464 Hunter Road
Rydal, Pennsylvania 19046
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
42
SERIES B INVESTORS:
BEA SYSTEMS, INC.
By: /s/ STEVE L. BROWN
---------------------------
Name: Steve L. Brown
Title: Sr. VP
Mailing Address:
2315 North First Street
San Jose, CA 95131
Attention: Treasurer
Phone: (408) 570-8088
Fax: (408) 570-8918
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
43
SERIES B INVESTORS
By: /s/ PATRICK L. HERMSEN
---------------------------
Name: Patrick L. Hermsen
Mailing Address:
Patrick L. Hermsen
4944 Parkway Plaza, Suite 110
Charlotte, NC 28217
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
44
SERIES B INVESTORS:
/s/ ROBERT F. LOVETT III
---------------------------
Name: Robert F. Lovett III
Mailing Address:
1324 Biltmore Drive
Charlotte, NC 28207
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
45
SERIES B INVESTORS:
/s/ AMY S. LOVETT
---------------------------
Name: Amy S. Lovett
Mailing Address:
1324 Biltmore Drive
Charlotte, NC 28207
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
46
SERIES B INVESTORS:
/s/ E. LYNWOOD MALLARD
---------------------------
Name: E. Lynwood Mallard
Mailing Address:
1919 Kensal Ct.
Charlotte, NC 28211
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
47
SERIES B INVESTORS:
/s/ ELIZABETH G. WREN
---------------------------
Name: Elizabeth G. Wren
Mailing Address:
3644 Brentwood Drive
Gastonia, NC 28056
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
48
SERIES B INVESTORS:
/s/ DAVID B. WHELPLEY JR.
Name: David B. Whelpley Jr.
Mailing Address:
3910 Charmal Place
Charlotte, NC 28226
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
49
SERIES B INVESTORS:
/s/ W. CHRISTOPHER MATTON
---------------------------
Name: W. Christopher Matton
Mailing Address:
111 N. Bloodworth St.
Raleigh, NC 27601
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
50
SERIES B INVESTORS:
/s/ SCOTT BRIAN TOWNSEND
---------------------------
Name: Scott Brian Townsend
Mailing Address:
3915 Potomac Court
Charlotte, NC 28211
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
51
HAAS FINANCIAL ADVISORS, INC.
By: /s/ JAN S. HAAS
---------------------------
Name: Jan S. Haas
Title: President
Mailing Address:
Haas Financial Advisors, Inc.
14A Chestnut Street
Boston, MA 02108 Phone:
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
52
FLEETBOSTON ROBERTSON STEPHENS INC.
By: /s/ CLARK CALLANDER
---------------------------
Name: Clark Callander
Title: Managing Director
Mailing Address:
FleetBoston Robertson Stephens Inc.
555 California St., #2600
San Francisco, CA 94104
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
53
SERIES B INVESTORS:
ELOYALTY CORPORATION
By: /s/ TIMOTHY J. CUNNINGHAM
---------------------------
Name: Timothy J. Cunningham
Title: SVP, CFO & CORP
Mailing Address:
ELoyalty Corporation
150 Field Drive
Suite 250
Lake Forest, IL 60045
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
54
SERIES B INVESTORS:
RAINMAKER SYSTEMS, INC.
By: /s/ MICHAEL SILTON
---------------------------
Name: Michael Silton
Title: CEO
Mailing Address:
Rainmaker Systems, Inc.
1800 Green Hills Road
Scotts Valley, CA 95066
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
55
SERIES B INVESTORS:
HAAS FINANCIAL ADVISORS, INC.
By: /s/ JAN S. HAAS
---------------------------
Name: Jan S. Haas
Title: President
Mailing Address:
Haas Financial Advisors, Inc.
14A Chestnut Street
Boston, MA 02108
Phone: 617/367-9850
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
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SERIES B INVESTORS:
/s/ STEVEN H. GASSAWAY
---------------------------
Name: Steven H. Gassaway
Mailing Address:
10622 Tyne Court
Charlotte, NC 28210
SIGNATURE PAGE TO YOUCENTRIC, INC.
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
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SCHEDULE A
LIST OF SERIES A INVESTORS
TCV III (GP)
TCV III, L.P.
TCV III (Q), L.P.
TCV III Strategic Partners, L.P.
58
SCHEDULE B TO INVESTORS RIGHTS AGREEMENT
SERIES B INVESTORS
STATE OF
NAME RESIDENCE
---- ---------
Robertson Co-Investment Fund LLC ........ CA
Bayview 2000, L.P. ...................... CA
Greyhound Crossover Fund L.P. ........... FL
William J. Bell 1993 Trust .............. CA
Robertson Deal Team:
Clark Callander ....................... CA
Dale R. Haithcock ..................... CA
Joseph Piazza ......................... CA
Sam Reshwan ........................... CA
Marshall Senk ......................... CA
Michael J. Rosso ...................... CA
Greg Rickman .......................... CA
Jeff Becker ........................... CA
First Union Investors, Inc. ............. NC
Seligman Communications and Information
Fund, Inc. .............................. NY
Seligman New Technologies Fund, Inc. .... NY
Seligman Investment Opportunities (Master)
Fund - NTV Portfolio .................... NY
TCV III (GP) ............................ CA
TCV III, L.P. ........................... CA
TCV III (Q), L.P. ....................... CA
TCV III Strategic Partners, L.P. ........ CA
Dain Rauscher Wessels Investors L.L.C ... MN
PALM Partners VI ........................ PA
BEA Systems, Inc. ....................... CA
YOUcentric Friends and Family:
Patrick L. Hermsen .................... NC
Robert Lovett III ..................... NC
Amy S. Lovett ......................... NC
E. Lynwood Mallard .................... NC
Elizabeth G. Wren ..................... NC
David B. Whelpley, Jr ................. NC
W. Christopher Matton ................. NC
Scott B. Townsend ..................... NC
eLoyalty Corporation .................... IL
Rainmaker Systems, Inc. ................. CA
Haas Financial Advisors, Inc. ........... MA
Steven H. Gassaway ...................... NC
59
SCHEDULE C
LIST OF FOUNDERS
Tom Fedell
Karl Johnson
Robert Kear
Mark Logan
Wells Tiedeman
60
SCHEDULE D
YOUCENTRIC, INC.
a North Carolina corporation
CERTIFICATE OF REPRESENTATIONS
REGARDING QUALIFIED SMALL BUSINESS STOCK
THIS CERTIFICATE OF REPRESENTATIONS REGARDING QUALIFIED SMALL
BUSINESS STOCK (this "Certificate") is executed as of ___________, _____ by
YOUcentric, Inc., a North Carolina corporation (the "Company"), for the benefit
of [REQUESTING HOLDER OR HOLDERS], ("Shareholder"). As used herein, the term
"Stock" means those shares of Company stock issued by the Company to Shareholder
as described more fully on Schedule A hereto.
REPRESENTATIONS
Subject to the limitations and qualifications set forth below, the
Company hereby represents as follows:
1. The Company has conducted a reasonable investigation into the question
of whether the Stock is "qualified small business stock" ("QSBS")
within the meaning of Section 1202(c) of the Internal Revenue Code of
1986, as amended (the "Code");
2. As of the date first above written, and assuming that Shareholder has
not sold, distributed, or otherwise transferred the Stock, all of the
Stock is QSBS.
QUALIFICATIONS AND LIMITATIONS
1. Qualification of the Stock as QSBS is based, in part, on the
value of the Company stock or other assets at certain relevant times. For
purposes of the representations made in this Certificate, the Company has made a
good faith determination of such values, taking into account all material facts
and circumstances, but cannot guarantee that the Internal Revenue Service will
not successfully assert that such determination is incorrect.
2. Qualification of the Stock as QSBS is based, in part, on whether
the Company has been engaged in the active conduct of one or more qualified
trades or businesses. The term "qualified trade or business" set forth in
Section 1202(e)(3) of the Code is not clearly defined in all respects. For
purposes of the representations made in this Certificate, the Company has made a
good faith effort to apply the definition of qualified trade or business set
forth in Section 1202(e)(3) of the Code, but cannot guarantee that the Internal
Revenue Service will not successfully assert a contrary definition.
61
3. Qualification of the Stock as QSBS is based, in part, on whether
at least eighty percent (by value) of the Company's assets have been used in the
active conduct of one or more qualified trades or businesses. For this purpose,
assets held as "working capital" of a qualified trade or business within the
meaning of Section 1202(e)(6) of the Code are treated as used in the active
conduct of such trade or business. The term "working capital" set forth in
Section 1202(e)(6) of the Code is not clearly defined in all respects. For
purposes of the representations made in this Certificate, the Company has made a
good faith effort to apply the definition of working capital set forth in
Section 1202(e)(6) of the Code, but cannot guarantee that the Internal Revenue
Service will not successfully assert a contrary definition.
4. Qualification of the Stock as QSBS is based, in part, on whether
the Company purchased any of its stock from a person related to Shareholder
during a relevant testing period. For purposes of the representations made in
this Certificate, the Company has made a good faith determination that such
purchases did not occur, but cannot guarantee that the Internal Revenue Service
will not successfully assert that such determination is incorrect.
IN WITNESS WHEREOF, the Company has executed this Certificate as of
the first date above written.
BY: ________________________________
TITLE: _____________________________