Exhibit 10.1
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
AMONG
JABBER, INC. AND
THE INVESTORS NAMED HEREIN
Dated: March 17, 2003
JABBER, INC.
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES D PREFERRED STOCK PURCHASE AGREEMENT is made effective as
of March 17, 2003, by and among Jabber, Inc., a corporation incorporated under
the laws of the State of Delaware the "Company"), and those persons and entities
listed on the Schedule of Investors attached hereto as Exhibit A (hereafter
sometimes referred to individually as an "Investor" and collectively as the
"Investors").
BACKGROUND
The Company desires to obtain up to Twelve Million, Seven Hundred
Thousand Dollars ($12,700,000) in financing from the Investors and the Investors
desire to invest up to Twelve Million, Seven Hundred Thousand Dollars
($12,700,000) in the Company in exchange for the issuance by the Company of an
aggregate of up to Forty-four Million, Four Hundred Eighty-Three Thousand, Three
Hundred Sixty-Two (44,483,362) shares of Series D Preferred Stock of the
Company, all as described in this Agreement and on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, and intending to be legally bound hereby, the
Investors and the Company hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Unless the context otherwise requires, the following
terms shall have the following meanings for purposes of this Agreement:
(a) "Affiliate" shall mean, with respect to any Person, (i) a
director, officer, general or limited partner, manager, member or stockholder of
such Person, (ii) a spouse, parent, sibling or descendant of such Person (or a
trust for the benefit of any one of more of the foregoing), and (iii) any other
Person that, directly or indirectly through one or more intermediaries,
Controls, or is Controlled by, or is under common Control with, such Person.
(b) "Board of Directors" shall mean the Board of Directors of the
Company.
(c) "Certificate of Incorporation" shall mean the Company's
Certificate of Incorporation, together with all amendments thereto.
(d) "Closing" shall have the meaning set forth in Section 2.3
hereof. "Closing Date" shall have the meaning set forth in Section 2.3 hereof.
(e) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(f) "Common Stock" shall mean the Common Stock, par value $0.01.
per share, of the Company.
(g) "Company" shall mean Jabber, Inc., a Delaware corporation.
(h) "Company Financial Statements" shall have the meaning set
forth in Section 3.1(g)(i) hereof.
(i) "Company Intellectual Property" shall have the meaning set
forth in Section 3.1(k) hereof.
(j) "Company's Knowledge" shall mean the actual knowledge of any
employee of the Company, or any information clearly evidenced in a written
record of the Company or a written notice received by the Company.
(k) "Contracts" shall have the meaning set forth in Section
3.1(l) hereof.
(l) "Control" shall mean, with respect to any Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
(m) "Conversion Shares" shall have the meaning set forth in
Section 2.1 hereof.
(n) "FT" shall mean France Telecom R&D.
(o) "FTTI" shall mean France Telecom Technologies Investissements
and its Affiliates.
(p) "GAAP" shall mean generally accepted accounting principles of
the United States.
(q) "Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof, and any entity, department,
commission, bureau, agency, authority, board, court, official or officer,
domestic or foreign, exercising executive, judicial, regulatory or
administrative functions of or pertaining to government.
(r) "Indemnified Parties" shall have the meaning set forth in
Section 6.3 hereof.
(s) "Intel" shall mean Intel Capital Corporation and its
Affiliates.
(t) "Investor" shall have the meaning set forth in the first
paragraph of this Agreement.
(u) "Investors Rights Agreement" shall mean the Investors Rights
Agreement of even date herewith among the Company and the Investors,
substantially in the form attached hereto as Exhibit B.
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(v) "Jona Side Letter" shall mean the letter executed and
delivered by Jona, Inc. to Intel and FTTI in the form attached hereto as Exhibit
F.
(w) "Losses" shall mean all losses, claims, damages, liabilities,
penalties, fees, costs and expenses (including reasonable attorneys' fees and
expenses).
(x) "Material Adverse Effect" shall mean a material adverse
effect on the assets, liabilities, operations, financial condition, operating
results or prospects of the Company.
(y) "Person" shall mean any individual, partnership, limited
partnership, limited liability partnership, corporation, limited liability
company, association, trust, joint venture, unincorporated organization, and any
Governmental Authority or other legal or business entity of any kind.
(z) "Purchase Price" shall have the meaning set forth in Section
2.2 hereof.
(aa) "Qualified Public Offering" shall mean a firm commitment
underwritten public offering pursuant to a registration statement under the
Securities Act, covering the offer and sale by the Company of Common Stock at a
public offering price per share that is not less than $1.40 (as appropriately
adjusted for any stock splits, combinations, divisions or similar
recapitalizations affecting the Series D Preferred Stock after the Closing Date)
and with a total in gross offering proceeds of not less than $20,000,000 (prior
to deducting underwriter discounts and commissions and expenses of the
offering).
(bb) "Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering of
effectiveness of such registration statement by the Commission.
(cc) "Related Agreements" shall mean collectively the Investors
Rights Agreement, the Right of First Refusal Agreement and the Voting Agreement.
(dd) "Restated Certificate" shall mean the Company's Amended and
Restated Certificate of Incorporation, substantially in the form attached hereto
as Exhibit E.
(ee) "Right of First Refusal Agreement" shall mean the Right of
First Refusal and Co-Sale Agreement of even date herewith among the Company, the
Investors and certain other stockholders of the Company, substantially in the
form attached hereto as Exhibit C.
(ff) "Securities" shall mean the Shares and the Conversion
Shares.
(gg) "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
(hh) "Series A Preferred Stock" shall mean the Series A Preferred
Stock, par value $0.01 per share, of the Company.
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(ii) "Series B Preferred Stock" shall mean the Series B Preferred
Stock, par value $0.01 per share, of the Company.
(jj) "Series C Preferred Stock" shall mean the Series C Preferred
Stock, par value $0.01 per share, of the Company.
(kk) "Shares" shall have the meaning set forth in Section 2.1
hereof.
(ll) "Stock Plan" shall mean the Company's 2000 Stock Option
Plan.
(mm) "Subsequent Closing" shall have the meaning set forth in
Section 2.3 hereof.
(nn) "Voting Agreement" shall mean the Stockholder Voting
Agreement of even date herewith among the Company, the Investors and the holders
of Common Stock, substantially in the form attached hereto as Exhibit D.
(oo) "Webb" shall mean Webb Interactive Services, Inc. and its
Affiliates.
(pp) "Webb-FTTI Letter" shall mean that letter from FTTI to Webb
in the form attached hereto as Exhibit G.
(qq) "Webb Note" shall collectively mean the promissory notes
between the Company and Webb, as more fully set forth in Schedule 1.1.
ARTICLE 2
PURCHASE AND SALE OF SECURITIES
2.1 Authorization of Shares. On or prior to the Closing Date, the
Company shall have authorized (i) the sale and issuance to the Investors of up
to Forty-four Million, Four Hundred Eighty-Three Thousand, Three Hundred
Sixty-Two (44,483,362) shares of Series D Preferred Stock (the "Shares") and
(ii) the issuance of the applicable number of shares of Common Stock issuable
upon conversion of the Shares (the "Conversion Shares"). The Shares and the
Conversion Shares shall have the rights, preferences, privileges and
restrictions set forth in the Restated Certificate.
2.2 Sale and Purchase. The Company agrees to issue and sell to the
Investors and, subject to the terms and conditions hereof and in reliance on the
representations, warranties and agreements of the Company contained or referred
to herein, the Investors agree to purchase from the Company, severally and not
jointly, at the Closing that number of shares of Series D Preferred Stock set
forth opposite the name of each Investor on Exhibit A attached hereto at a
purchase price of $0.2855 per share (the "Purchase Price").
2.3 Closing.
(a) Time and Place. The closing of the purchase and sale of the
Shares (the "Closing") shall take place at the offices of Intel at 2200 Mission
College Boulevard, Santa
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Clara, California 95052-8119 at 12:00 noon (Pacific time) on March 18, 2003, or
at such other date, time or place as the Company and the Investors may otherwise
agree (the "Closing Date").
(b) Subsequent Closing. In the event less than all of the Shares
are sold and issued at the Closing, the Company may issue and sell any or all of
the unissued Shares at a purchase price per share of no less than the Purchase
Price pursuant to an agreement or agreements substantially similar to this
Agreement (or an addendum to this Agreement) at one or more subsequent closings
(each a "Subsequent Closing") to take place at a time and place agreed upon by
the Company and the purchasers participating in the respective closing(s);
provided that the last Subsequent Closing must occur no later than January 31,
2004; and, provided, further, that such purchasers include a venture capital
firm that is reasonably acceptable to the Investors and the Company. Each
purchaser at a Subsequent Closing will also execute, and become a party to, the
Related Agreements. The sale of Shares at any Subsequent Closing shall not be
subject to any pre-emptive rights of holders of Shares acquired at the Closing
or a previous Subsequent Closing. If, at a Subsequent Closing, a venture capital
firm that is reasonably acceptable to the Investors and the Company purchases
Shares, then Webb shall have the right, but not the obligation, to purchase
Shares in an aggregate amount of up to 83.333% of the total purchase price paid
for all Shares by such venture capital firm in a Subsequent Closing (the "Webb
Option"). The Webb Option to purchase additional Shares is subject to the
following conditions: (i) Webb may not purchase an aggregate amount of Shares
with a value in excess of Two Million, Five Hundred Thousand Dollars
($2,500,000) in the Subsequent Closings; (ii) the exercise of the Webb Option
may not violate Section 5.3(a) hereof; and (iii) Webb must purchase any Shares
available to it pursuant to the Webb Option by January 31, 2004. Notwithstanding
any other provision in this Agreement to the contrary, if no reasonably
acceptable venture capital firm has informed the Company by November 1, 2003
that it intends to purchase any Shares in a Subsequent Closing, the Webb Option
shall expire on November 1, 2003, or, if the date for receiving such notice from
a reasonably acceptable venture capital firm is extended by a majority of the
Board (including all of the Independent Directors, as such term is defined under
the Voting Agreement), then such later date; provided, however, that in no event
will the Webb Option be extended beyond January 31, 2004.
(c) Payment of the Purchase Price. At the Closing and at any
Subsequent Closing, the Company shall deliver to each Investor a stock
certificate representing the number of Shares that such Investor is purchasing
against payment of the Purchase Price therefor by delivery to the Company of (i)
a certified check payable to the Company, (ii) a wire transfer to the Company or
a trust account, (iii) cancellation of indebtedness owed by the Company and
identified on Exhibit A, or (v) some combination thereof.
2.4 Use of Proceeds. Except as contemplated by Section 7.1, the
Company shall use the proceeds received from the sale of the Shares solely to
fund working capital, capital expenditures and acquisitions, and for general
corporate purposes and not to repay any indebtedness of the Company outstanding
on the Closing Date or for distributions or payments of any kind to the
Company's stockholders (or their Affiliates) or other Affiliates of the Company,
other than Company repurchases of restricted stock at cost from employees or
consultants pursuant to compensation agreements or arrangements approved by the
Board of Directors.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. Except as set forth
in the Schedule of Exceptions attached to and incorporated by reference into
this Agreement, the Company hereby represents and warrants to the Investors as
follows:
(a) Organization. The Company is a corporation duly organized,
validly existing and in good standing under, and by virtue of, the laws of the
State of Delaware and has all requisite corporate power and authority to own and
lease its properties and assets, and to carry on its business as presently
conducted and as presently proposed to be conducted. The Company is duly
qualified as a foreign corporation in all such other jurisdictions, if any, in
which the conduct of its business as presently conducted or as presently
proposed to be conducted or its present ownership, leasing or operation of
property requires such qualification and where the failure so to have qualified
would have a Material Adverse Effect on the Company.
(b) Authorization. The Company has all necessary corporate power
and authority to enter into and perform this Agreement and the Related
Agreements, to sell, issue and deliver the Shares and the Conversion Shares to
the Investors in accordance with the terms of this Agreement, and to carry out
the transactions contemplated by this Agreement and the Related Agreements. The
execution, delivery and performance by the Company of this Agreement and the
Related Agreements and the issuance of the Shares have been duly authorized by
all requisite corporate action by the Company, and all waivers and consents to
be obtained in connection with the transactions contemplated by this Agreement
have been obtained. This Agreement and the Related Agreements have been executed
and delivered on behalf of the Company and constitute the valid and legally
binding obligations of the Company, enforceable against it in accordance with
their terms. The sale of the Shares and the subsequent conversion of the Shares
into Conversion Shares are not, and will not be, subject to any preemptive
rights or rights of first refusal that have not been properly waived or complied
with.
(c) No Conflicts. The execution, delivery and performance by the
Company of this Agreement, the issuance, sale and delivery of the Shares, the
issuance and delivery of shares of the Conversion Shares upon conversion of any
or all of the Shares, and the consummation of the transactions contemplated by
this Agreement by the Company will not (i) violate any provision of law,
statute, rule or regulation, or any ruling, writ, injunction, order, judgment or
decree of any court or other Governmental Authority applicable to the Company or
its properties or assets or (ii) conflict with or result in any breach of any of
the terms, conditions or provisions of, or constitute (with due notice or lapse
of time or both) a default (or give rise to any right of termination,
cancellation or acceleration under), or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
the Company under, the Certificate of Incorporation or Bylaws of the Company (in
each case as amended to and including the Closing Date) or any note, indenture,
mortgage, lease agreement or other contract, agreement or instrument to which
the Company is a party or by which it or any of its properties or assets are
bound or affected (except for such conflicts or breaches as to which requisite
waivers and consents have been obtained).
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(d) No Consent or Approval Required. Except for the filing of any
notice subsequent to the Closing that may be required under applicable federal
and/or state securities or "blue sky" laws (which, if required, shall be filed
on a timely basis as may be so required), no consent, approval or authorization
of, or declaration to or of, or filing with, any Governmental Authority or
Person is required for the valid authorization, execution and delivery by the
Company of this Agreement, or the offer, sale and issuance of the Shares, the
issuance of the Conversion Shares upon conversion of any or all of the Shares,
or the consummation of any other transaction contemplated on the part of the
Company hereby.
(e) Subsidiaries: Equity Investments. The Company has never had
nor does it presently have any subsidiaries nor has it ever owned nor does it
presently own any capital stock or other proprietary interest, directly or
indirectly, in any corporation, association, trust, partnership, limited
liability company, joint venture or other entity.
(f) Capitalization. The authorized capital stock of the Company
immediately prior to consummation of the issuance of the Shares shall consist of
One Hundred Million (100,000,000) shares of Common Stock, of which Thirty-Five
Million, Twenty-Eight Thousand, Nine Hundred Sixty-Nine (35,028,969) shares are
issued and outstanding, including Ten Million, Four Hundred Fifty-One Thousand,
Six Hundred Seventy-Three (10,451,673) shares issued to FTTI in full
satisfaction of FTTI's price protection pursuant to Section 3 of the agreement
dated as of April 8, 2002 among the Company, FTTI and Webb; and Seventy-Five
Million (75,000,000) shares of Preferred Stock, consisting of Series B Preferred
Stock, Twelve Thousand (12,000) shares of which are authorized, One Hundred
(100) shares of which are issued and outstanding, , Series C Preferred Stock,
Twelve Thousand (12,000) shares of which are authorized, One Hundred Twenty-Five
(125) shares of which are issued and outstanding, and Series D Preferred Stock,
of which Forty-Four Million, Four Hundred Eighty-Three Thousand, Three Hundred
Sixty-Two (44,483,362) shares are authorized, none of which are issued and
outstanding. Upon filing of the amended Certificate of Incorporation, each
issued and outstanding share of Series B Preferred Stock and Series C Preferred
Stock shall convert into one thousand shares of Common Stock simultaneously with
the Closing and each share of authorized and unissued Series B Preferred Stock
and Series C Preferred Stock shall be cancelled. Immediately after the Closing,
no shares of any series of preferred stock, except for the Shares, shall be
issued, outstanding or available for reissuance, and the number of issued and
outstanding shares of Common Stock will be Thirty-Five Million, Two Hundred
Fifty-Three Thousand, Nine Hundred Sixty-Nine (35,253,969). All outstanding
shares of capital stock of the Company are duly authorized, validly issued,
fully paid and nonassessable and have been issued in compliance with all
applicable federal and state securities laws. All of the Shares, when issued in
accordance with this Agreement, and all of the Conversion Shares, when issued
upon conversion of any or all of the Shares, will be duly authorized, validly
issued, fully paid, nonassessable and subject to no lien or restriction on
transfer, except restrictions on transfer imposed by applicable securities laws.
The Company has reserved Forty-Four Million, Four Hundred Eighty-Three Thousand,
Three Hundred Sixty-Two (44,483,362) shares of Common Stock for issuance upon
conversion of the Shares. A total of Seven Million, Five Hundred Thousand
(7,500,000) shares of Common Stock are reserved for issuance pursuant to the
Stock Plan, and options to purchase One Million, Seven Hundred Fourteen
Thousand, Two Hundred Eighty-Four (1,714,284) shares have been issued and are
outstanding pursuant to the Plan, of which none of the options have been
exercised.
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Except as contemplated by this Agreement and the Related Agreements,
(i) there are no outstanding warrants, options, agreements, convertible
securities or other commitments pursuant to which the Company is or may become
obligated to issue any shares of its capital stock or other securities of the
Company, other than options issued pursuant to the Stock Plan; (ii) except as
set forth in the Investor Rights Agreement, there are no preemptive or similar
rights to purchase or otherwise acquire shares of capital stock of the Company
pursuant to any provision of the Certificate of Incorporation or Bylaws of the
Company (in each case as amended to and including the Closing Date) or any
agreement to which the Company is a party; (iii) there are no agreements,
restrictions or encumbrances (such as a right of first refusal, right of first
offer, proxy, voting agreement, voting trust, etc.) with respect to the sale or
voting of any shares of capital stock of the Company (whether outstanding or
issuable upon conversion or exercise of outstanding securities) to which the
Company is a party or, to the Company's Knowledge, among any other Persons; (iv)
the Company does not have outstanding any obligation to repurchase or otherwise
acquire or retire any of its capital stock, any securities convertible into or
exchangeable for its capital stock or any rights, options or warrants with
respect thereto; and (v) the Company does not have outstanding any rights that
require it to register the offering of any of its securities under the
Securities Act.
(g) Financial Statements.
(i) Financial Statements Delivered. The Company has
delivered to the Investors true, complete and correct copies of the balance
sheets of the Company and related statements of operations, changes in
stockholders' equity, and cash flows for (x) the fiscal year ended December 31,
2001, audited and prepared by the Company's independent certified public
accountants, and (y) the fiscal year ended December 31, 2002, prepared by the
Company and (z) the monthly periods ended on the last day of each calendar month
during the period beginning on January 1, 2003 and ending on February 28, 2003,
in each case prepared by the Company (collectively, the "Company Financial
Statements"), all as attached hereto as Exhibit H. With respect to the balance
sheets of the Company and related statements of operations, changes in
stockholders' equity, and cash flows for the fiscal year ended December 31,
2002, the Company's independent certificated public accountants have concluded
their review of such balance sheets and related statements of operations,
changes in stockholders' equity, and cash flows and have not indicated that any
material change is necessary.
(ii) Preparation of Financial Statements. The Company
Financial Statements are true, correct and complete and have been prepared in
accordance with GAAP applied in a consistent basis through the periods
indicated, except that unaudited statements may not contain all footnotes
required by GAAP and are subject to year-end adjustments. The Company Financial
Statements fairly present the financial condition and results of operations of
the Company as of and for the periods ending on their respective dates, and the
Company has no liabilities not reflected in or reserved against on the Company
Financial Statements which, under GAAP, should have been reflected or reserved
against thereon.
(h) Absence of Undisclosed Liabilities. The Company has no
liabilities of any nature (matured or unmatured, fixed or contingent) not
disclosed in the December 31, 2002 balance sheet included in the Company
Financial Statements, except for (i) current liabilities incurred in the
ordinary course of business since December 31, 2002, (ii) liabilities which,
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individually and in the aggregate, were not material to the financial condition
or results of operations of the Company, and (iii) unmatured liabilities
incurred in the ordinary course of the Company's business and not required to be
so provided for under GAAP.
(i) Absence of Changes. Since December 31, 2002, there has not
been:
(i) any change in the assets, liabilities, operations,
financial condition, operating results, or prospects of the Company which
individually or in the aggregate has had or is reasonably expected to have a
Material Adverse Effect;
(ii) any change in any material contract, agreement or
arrangement to which the Company is a party or by which it is bound which has
had or is reasonably expected to have a Material Adverse Effect;
(iii) any debt, liability or obligation of any nature
whatsoever (contingent or otherwise) incurred by the Company, other than current
liabilities or obligations incurred in the ordinary course of business and
consistent with past practice;
(iv) any change, except in the ordinary course of business
consistent with past practices, in the contingent obligations of the Company by
way of guaranty, endorsement, indemnity, warranty or otherwise;
(v) any mortgage, pledge, transfer of a security interest
in, lien or encumbrance, created by the Company, with respect to any of its
material properties or assets, except liens for taxes not yet due or payable;
(vi) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company, except actions in the
ordinary course of business which has not had and will not have a Material
Adverse Effect;
(vii) any waiver of any valuable right of the Company, or
the cancellation of any material debt or claim held by the Company;
(viii) any sale, assignment or transfer of any tangible or
intangible assets of the Company, including, without limitation, any patents,
trademarks, copyrights, trade secrets, except in the ordinary course of business
and consistent with past practice;
(ix) any issuance of any stock, options, warrants,
convertible debenture, or other equity or equity-linked securities of the
Company, or any agreement or commitment therefor;
(x) any declaration or payment of dividends on, or other
distributions with respect to, or any direct or indirect redemption or
acquisition of, any shares of the capital stock of the Company, or any agreement
or commitment therefor;
(xi) any damage, destruction or loss (whether or not covered
by insurance), that has had a Material Adverse Effect;
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(xii) any contract, agreement or arrangement, including,
without limitation, any direct or indirect loan or guaranty made by the Company
to, with or for the benefit of any officer, director, employee, consultant,
stockholder or Affiliate of the Company or any Affiliate of any of the
aforementioned individuals (other than advances for reimbursable business
expenses made in the ordinary course of business), or any agreement or
commitment therefor;
(xiii) any resignation or termination of any officer or key
employee of the Company, or, to the Company's Knowledge, any indication,
suggestion or threat that such resignation or termination may be forthcoming;
(xiv) any change in any compensation arrangement or
agreement with any employee, consultant, officer, director or stockholder of the
Company;
(xv) any contract or other transaction entered into by the
Company, except in the ordinary course of business and consistent with past
practice;
(xvi) any contract, agreement or commitment by the Company
to do any of the things described in this Section 3.1(i); or
(xvii) to the Company's Knowledge, any other event or
condition of any character that, either individually or cumulatively, has
resulted in or is reasonably expected to result in a Material Adverse Effect.
(j) Title and Condition of Properties. The Company has good and
marketable title to all of its properties (both real and personal) and assets,
and has good title to all its leasehold interests, and such assets are not and
will not be subject to any lien, security interest or other encumbrance or
restriction of any kind except (i) liens for current taxes and assessments not
in default, (ii) liens, minor imperfections of title, encumbrances and
easements, (iii) mechanics', carriers', workmen's, repairmen's and other similar
liens, rights of way, building or use restrictions, exceptions, variances and
reservations and (iv) other liens, encumbrances and limitations of any kind,
which with respect to clauses (i) through (iv) are not substantial in amount, do
not materially detract from the value of or materially interfere with the
present or contemplated use of any of the assets subject thereto or affected
thereby or otherwise materially impair the business operations conducted by the
Company, and which have arisen or been incurred only in the ordinary course of
business. All facilities, machinery, equipment, fixtures, vehicles, and other
properties owned or leased by the Company have been maintained in the ordinary
course of business in a reasonably prudent manner, and are in good operating
condition and repair. With respect to the property and assets subject to leases,
the Company is in compliance with such leases. No event has occurred and is
continuing which, with due notice or lapse of time or both, would constitute a
default by the Company under any such lease or agreement or, to the Company's
Knowledge, by any other party.
(k) Intellectual Property. The Company owns or possesses
exclusive legal rights, including, without limitation, the right to bring
actions of the infringement thereof, to all patents, patent rights, patent
applications, trademarks, trademark rights, trademark applications, service
marks, service mark applications, trade names, trade name rights, copyrights,
copyright
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registrations and applications, domain names, trade secrets, licenses, know-how,
concepts, computer programs and software, technical data, proprietary rights,
proprietary processes and service mark applications, other intellectual property
rights and information (and all documentation and media constituting, describing
or relating to the above, including, without limitation, materials, memoranda
and records) used, developed, sold or licensed by the Company in its business as
presently conducted (each such item, the "Company Intellectual Property"), free
and clear of any liens or encumbrances and without any conflict with or
infringement of the rights of others. The Schedule of Exceptions contains a
complete list of any and all issued patents, patent applications, registered
trademarks, registered trademark applications, registered service marks,
registered service mark applications, registered trade names, copyright
registrations and applications and domain names throughout the world and
registrations, renewals, extensions and the like thereof owned or used by the
Company. Except as set forth on the Schedule of Exceptions, the Company is not a
party to any outstanding options, licenses, or agreements of any kind relating
to any of the Company Intellectual Property owned by the Company. The Company
has not received any written communications alleging, nor does the Company have
reason to believe, that the Company has violated or, by conducting its business
as presently conducted and as proposed to be conducted, would violate any of the
intellectual property or other proprietary rights of any other Person, and is
not aware, based on reasonable investigation, of (i) any reasonable basis
therefor, or (ii) any threat thereof. To the Company's Knowledge, no third party
is infringing or has infringed on any rights of the Company in or to the Company
Intellectual Property. No royalties, honorariums, fees or other amounts are
payable by the Company to other Persons by reason of the ownership, sale,
marketing, distribution, manufacture, lease, license or use of the Company
Intellectual Property. The Company is not aware that any of its employees,
agents or contractors is obligated under any contract (including licenses,
covenants, or commitments of any nature) or other agreement, or subject to any
judgment, decree, or order of any court or administrative agency, that would
interfere with the use of such employee's commercially reasonable efforts to
promote the interests of the Company, or that would conflict with the Company's
business as currently conducted. It is not necessary for the Company to utilize
any inventions, trade secrets or proprietary information of any of its employees
made prior to their employment by the Company, except for inventions, trade
secrets or proprietary information that have been assigned to the Company. There
is no overlap in the programming between, nor any code sharing between, nor any
other intellectual property rights that are embodied in, both the Company's
proprietary software and its "open source" software. Each of the Company's prior
and current employees and independent contractors who have contributed to the
Company's Intellectual Property and products has executed non-disclosure and
assignment of intellectual property rights agreements, all of which are valid
and fully enforceable.
(l) Material Contracts and Other Commitments. Except for purchase
orders arising in the ordinary course of business and consistent with past
practice or as set forth on the Schedule of Exceptions, there are no agreements,
understandings, instruments, contracts or proposed transactions to which the
Company is a party or by which it is bound that are material to the business of
the Company as presently conducted (including, without limitation, any employee
nondisclosure, noncompete and/or inventions agreements) or involve obligations
(contingent or otherwise) of, or payments to, the Company in excess of $10,000
(collectively, the "Contracts"). All Contracts are valid, binding and in full
force and effect in all material respects, and are valid, binding and
enforceable by the Company in accordance with their respective
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terms, subject to laws of general application relating to bankruptcy, insolvency
and the relief of debtors and rules of law governing specific performance,
injunctive relief or other equitable remedies. The Company is not in default
under any Contract, and, to the Company's Knowledge, no other party to any
Contract is in default, where such default would have a Material Adverse Effect.
The Company is not a party to any franchise agreement either as a franchisor or
a franchisee. True and complete copies of all Contracts have been made available
for inspection by counsel to the Investors.
(m) Litigation. There are (i) no actions, suits, proceedings, or
investigations pending or, to the Company's Knowledge, threatened against the
Company or its properties before any court or Governmental Authority (and, to
the Company's Knowledge, there is no basis thereof), and (ii) to the Company's
Knowledge, no actions, suits, proceedings or investigations are pending or
threatened against its employees that may relate to their employment with, or
conduct on behalf of, the Company, or which may call into question the validity
of this Agreement, the Related Agreements, or any action taken or to be taken in
connection herewith or therewith. The foregoing includes, without limitation,
any action, suit, proceeding, or investigation pending or currently threatened
involving the prior employment of any of the Company's employees, their use in
connection with the Company's business of any information or techniques
allegedly proprietary to any of their former employers, their obligations under
any agreements with prior employers, or negotiations by the Company with
potential backers of, or investors in, the Company or its proposed business. The
Company is not a party or subject to any writ, order, decree, injunction or
judgment of any court or Governmental Authority (nor, to the Company's
Knowledge, is there any reasonable basis therefor or threat thereof). There is
no action, suit, proceeding or investigation by the Company currently pending or
that the Company currently intends to initiate.
(n) Employees. The Company does not have any collective
bargaining agreements with any of its employees. To the Company's Knowledge,
there is no labor union organizing activity pending or threatened with respect
to the Company. Except as set forth on the Schedule of Exceptions, (a) no
employee has any agreement or contract, written or verbal, regarding his
employment by the Company and (b) the Company is not a party to or bound by any
currently effective employment contract, deferred compensation arrangement,
bonus plan, incentive plan, profit sharing plan, retirement agreement or other
employee compensation plan or agreement. To the Company's Knowledge, no employee
of the Company, nor any consultant with whom the Company has contracted, is in
violation of any term of any employment contract, proprietary information
agreement or any other agreement relating to the right of any such individual to
be employed by, or to contract with, the Company because of the nature of the
business to be conducted by the Company; and to the Company's Knowledge, the
continued employment by the Company of its present employees, and the
performance of the Company's contracts with its independent contractors, will
not result in any such violation. The Company has not received any written
notice alleging that any such violation has occurred. No employee of the Company
has been granted the right to continued employment by the Company or to any
material compensation following termination of employment with the Company. To
the Company's Knowledge, no officer or key employee, or that any group of key
employees, intends to terminate their employment with the Company, nor does the
Company have a present intention to terminate the employment of any officer, key
employee or group of key employees.
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(o) Employee Benefit Plans. Except as set forth on the Schedule
of Exceptions, the Company does not maintain and has never contributed to any
Employee Benefit Plan as defined in the Employee Retirement Income Security Act
of 1974.
(p) Environmental and Safety Laws. The Company is not in
violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and no expenditures are or will
be required in order to comply with any such existing statute, law, or
regulation where such violation or expenditure would have a Material Adverse
Effect.
(q) Taxes. The Company has filed all federal, state, local and
foreign tax returns which are required to be filed by it, and all such returns
are true and correct in all material respects and the Company has paid all taxes
pursuant to such returns or pursuant to any assessments received by it or which
it is obligated to withhold from amounts owing to any employee, creditor or
third party. To the Company's Knowledge, the Company is not subject to any
material additional assessments and there exists no basis therefor. The Company
has not waived any statute of limitations with respect to taxes and has not
agreed to any extension of time with respect to any tax assessment or
deficiency. The Company has never made an election under Section 341(f) of the
Internal Revenue Code of 1986, as amended. The Company has never been audited
(and it not presently under audit) by the Internal Revenue Service or any state,
local or foreign taxing authority.
(r) Customers and Suppliers. The Schedule of Exceptions sets
forth a complete and correct list of: (i) all customers representing at least
five percent (5%) of the Company's total revenues during the period from
December 31, 2000 through December 31, 2002; and (ii) all suppliers from whom
the Company made purchases in excess of $50,000 during the period from December
31, 2000 through December 31, 2002. The Company is not aware of any current
customer, supplier, distributor or representative that has attempted, intends,
or has threatened, to terminate or change its relationship with the Company in a
manner that would have a Material Adverse Effect.
(s) Distributions. Since its incorporation, there has been no
declaration or payment by the Company of dividends, or any distribution by the
Company of any assets of any kind to any of its stockholders in redemption of or
as the purchase price for any of the Company's securities.
(t) Related Party Transaction. No employee, officer, stockholder
or director of the Company or member of his or her immediate family is indebted
to the Company, nor is the Company indebted (or committed to make loans or
extend or guarantee credit) to any of them other than (i) for payment of salary
for services rendered, (ii) reimbursement for reasonable expenses incurred on
behalf of the Company, and (iii) for other standard employee benefits made
generally available to all employees (including stock option agreements
outstanding under any stock option plan approved by the board of directors of
the Company). None of such persons has any direct or indirect ownership interest
in any firm or corporation with which the Company is affiliated or with which
the Company has a business relationship, or any firm or corporation that
competes with the Company, except that employees, officers or directors of the
Company and members of their immediate families may own stock in publicly
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traded companies that may compete with the Company or with whom the Company may
have a business relationship. No officer, director or stockholder or any member
of their immediate families is, directly or indirectly, interested in any
material contract with the Company (other than such contracts as they relate to
any such person's employment with the Company or ownership of capital stock or
other securities of the Company).
(u) Insurance. The Company has property, fire, liability,
workmen's compensation and casualty insurance policies with coverage customary
for companies similarly situated to the Company, each of which is in full force
and effect and all premiums due thereon have been paid.
(v) Registration Rights. Except as set forth in the Investors
Rights Agreement, the Company is not under any obligation to register under the
Securities Act, any of its presently outstanding securities or any of its
securities which may hereafter be issued.
(w) Governmental Approvals. The Company has obtained all
approvals, authorizations, consents, licenses and permits of any Governmental
Authority necessary to carry on its business as presently conducted and as
presently proposed to be conducted, the absence of which would have a Material
Adverse Effect. Such approvals, authorizations, consents, licenses and permits
are in full force and effect, no violation or default by the Company has been
recorded in respect of any such approvals, authorizations, consents, licenses or
permits, and no proceeding is pending or, to the Company's Knowledge, threatened
to revoke or limit any thereof.
(x) No Defaults. The Company is not in default (i) under its
Certificate of Incorporation or Bylaws (in each case as amended to the date
hereof), or any indenture, mortgage, lease, purchase or sales order, or any
other contract, agreement or instrument to which the Company is a party or by
which it or any of its property is bound or affected or (ii) to the Company's
Knowledge, with respect to any order, writ, injunction or decree of any court or
any Governmental Authority, in either case under clause (i) or (ii) which
default could result in the termination of any such contract, agreement or
instrument or otherwise result in the imposition of liability or penalties which
would have a Material Adverse Effect.
(y) Compliance. The Company has complied, and, to the Company's
Knowledge is in compliance, with all federal, state, local and foreign laws,
ordinances, regulations and orders applicable to it (including, without
limitation, all such applicable laws of the United States and of each applicable
jurisdiction relating to equal employment opportunity), its business or the
ownership of its assets, the failure to comply with which laws would reasonably
be expected to, individually or in the aggregate, have a Material Adverse
Effect.
(z) Investment Company Act. The Company is not an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
(aa) Offering Exemption. Assuming with respect to the Investors
the accuracy of the representations, warranties, acknowledgments and agreements
of the Investors set forth in Section 3.2 hereof, the offering for sale of the
Shares and the issuance of the
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Conversion Shares upon conversion any or all of the Shares constitute
transactions exempt from registration under the Securities Act and from
registration or qualification under applicable state securities or "blue sky"
laws except for such registration or qualification as has been obtained on or
before the date hereof.
(bb) Disclosure. This Agreement and all of the Exhibits and
Schedules attached hereto and the written documents that were given to the
Investors as part of their due diligence, when taken as a whole, do not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained herein and therein not
misleading in light of the context and circumstances in which they were made.
(cc) Corporate Documents. The current Certificate of
Incorporation and Bylaws of the Company are in the form provided to counsel for
the Investors. The copy of the minute books of the Company provided to the
Investors' counsel contains minutes of all meetings of the Board of Directors
and stockholders and all actions by written consent without a meeting by the
Board of Directors and stockholders since the date of incorporation and reflects
all actions taken by the Board of Directors (and any committee of directors) and
stockholders with respect to all transactions referred to in such minutes
accurately in all material respects.
3.2 Representations and Warranties of the Investors. Each Investor
represents and warrants as to itself, severally and not jointly, to the Company
as follows:
(a) Such Investor has all requisite corporate power and authority to
execute and deliver this Agreement and the Related Agreements, to purchase the
Shares hereunder and to carry out and perform its obligations under the terms of
this Agreement and the Related Agreements. All action on the part of the
Investor necessary for the authorization, execution, delivery and performance of
this Agreement and the Related Agreements, and the performance of all of the
Investor's obligations under this Agreement and the Related Agreements, has been
taken or will be taken prior to the Closing.
(b) This Agreement and the Related Agreements, when executed and
delivered by the Investor, will constitute valid and legally binding obligations
of the Investor, enforceable in accordance with their terms except: (i) to the
extent that the indemnification provisions contained in the Investors Rights
Agreement may be limited by applicable law and principles of public policy, (ii)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors' rights
generally, and (iii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies or by general
principles of equity.
(c) No consent, approval, authorization, order, filing, registration
or qualification of or with any court, Governmental Authority or other Person is
required to be obtained by the Investor in connection with the execution and
delivery of this Agreement and the Related Agreements by the Investor or the
performance of the Investor's obligations hereunder or thereunder.
(d) Such Investor represents and warrants to the Company that it is
qualified as an "accredited investor" as defined in Rule 501 promulgated under
the Securities Act, and its
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residency (or in the case of a partnership, limited liability company or
corporation, such entity's principal place of business) is correctly set forth
on the signature page hereto.
(e) Such Investor is acquiring the Securities solely for its own
account, for investment and not with a view to the distribution thereof within
the meaning of the Securities Act.
(f) Such Investor understands that the Securities have not been
registered or qualified under the Securities Act or any state securities laws,
by reason of their issuance and sale in transactions exempt from the
registration or qualification requirements of the Securities Act and applicable
state securities laws. Such Investor acknowledges that reliance on said
exemptions is predicated in part on the accuracy of its representations and
warranties herein.
(g) Such Investor acknowledges and agrees that the Securities must be
held indefinitely unless a subsequent disposition thereof is registered or
qualified under the Securities Act and applicable state securities laws or is
exempt from registration and that, except as expressly provided in the Investors
Rights Agreement, the Company is not required to, and does not intend to, so
register or qualify any such securities or to take any action to make such an
exemption available except to the extent provided herein.
(h) Such Investor will not transfer any of the Securities, except in
compliance with the Securities Act and applicable state securities laws and the
restrictions on transfer contained in the Right of First Refusal Agreement.
(i) Such Investor represents and warrants to the Company that (i) its
partners, officers and/or directors, together with its advisors, have such
knowledge and experience in financial and business matters as is necessary to
enable such Investor to evaluate the merits and risks of an investment in the
Company; (ii) it has no present need for liquidity in its investment in the
Company and is able to bear the risk of that investment for an indefinite period
and to afford a complete loss thereof, and (iii) it was not formed for the
specific purpose of making an investment in the Company.
(j) Such Investor is aware that a high degree of risk is inherent in
investing in Company; the purchase of the Securities is highly speculative and
there is a significant risk of loss of Investor's entire investment; there is no
market for the Securities nor can there be any assurance that any such market
will ever develop; and the Securities are subject to substantial restrictions on
transferability under state and federal securities laws and the Right of First
Refusal Agreement.
(k) No finder, broker, agent, financial advisor or other intermediary
has acted on behalf of such Investor in connection with the offering of the
Securities or the negotiation or consummation of this Agreement or any of the
transactions contemplated hereby.
3.3 Additional Representations and Warranties of the Investors. Each
Investor represents and warrants as to itself, severally and not jointly, to the
Company and to each of the other Investors that, except for the provisions set
forth in this Agreement, the Related Agreements, the Jona Side Letter and the
Webb-FTTI Letter, such Investor has not entered into
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any agreement with, or made any promise or covenant to, any Person (including
without limitation, any other Investor) in connection with the transactions
contemplated hereby.
ARTICLE 4
CONDITIONS TO CLOSING
4.1 Conditions to Investors' Obligation to Close. The obligation of
each of the Investors to consummate the transactions contemplated herein is
subject to the satisfaction, on or prior to the Closing Date, of the conditions
set forth below and applicable thereto, any of which may be waived with respect
to an Investor in writing by that Investor:
(a) Representations and Warranties; Performance of Obligations.
Each of the representations and warranties made by the Company herein shall have
been true and correct when made, and shall be true and correct on and as of the
Closing Date (or the date of any Subsequent Closing) or, to the extent such
representation and warranty is as of a specific date, as of such specific date.
The Company shall have performed and complied with the agreements, covenants,
conditions and provisions of this Agreement required to be performed or complied
with by it at or prior to the Closing Date (or the date of any Subsequent
Closing).
(b) Legal Investment. On the Closing Date (or the date of any
Subsequent Closing), the sale and issuance of the Shares and the proposed
issuance of the Conversion Shares shall be legally permitted by all laws and
regulations to which the Investors and the Company are subject.
(c) Securities Laws. The offer, sale and issuance to the
Investors of the Shares pursuant to this Agreement and of the Conversion Shares
upon conversion of the Shares pursuant to the Restated Certificate shall be
exempt from the registration requirements of the Securities Act and the
registration and/or qualification requirements of all applicable state
securities or "blue sky" laws, or the Company shall have made or obtained all
necessary registrations, qualifications and permits required by any federal or
state securities law or regulation for the offer and sale of the Securities;
provided that a blue sky notice filing and fee of less than $500 in any one
state shall not constitute a breach of this condition.
(d) Filings, Consents, Permits, and Waivers. The Company and the
Investors shall have made all filings with any Governmental Authority required
to be made prior to the Closing (or the date of any Subsequent Closing) and
obtained any and all consents, permits and waivers necessary for the issuance
and sale of the Shares and the Conversion Shares and for consummation of the
transactions contemplated by this Agreement and the Related Agreements.
(e) No Actions or Proceedings. No action, suit or proceeding by
or before any Governmental Authority shall have been asserted, instituted or
threatened by any party to restrain, prohibit or invalidate the transactions
contemplated by this Agreement or the Related Agreements.
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(f) Reservation of Conversion Shares. The shares of Common Stock
initially issuable upon conversion of the Shares shall have been duly authorized
and reserved for issuance upon such conversion.
(g) Corporate Documents. The Company shall have delivered to the
Investors or their counsel, copies of all corporate documents of the Company as
the Investors shall reasonably request.
(h) Certificate of Incorporation. The Company shall have adopted
and filed with the Secretary of State of the State of Delaware the Restated
Certificate, and the Restated Certificate shall be in full force and effect.
(i) Good Standing Certificates. The Investors shall have received
certificates issued by the applicable Governmental Authorities in the applicable
jurisdictions confirming the good standing of Company as of recent date prior to
the Closing in the State(s) of Delaware and Colorado.
(j) Legal Opinion. The Investors shall have received an opinion
of the Company's legal counsel, dated the Closing Date, in the form attached
hereto as Exhibit I.
(k) Board of Directors. Effective as of the effective time of the
Closing, the Board of Directors of the Company shall be comprised of William
Cullen, Rick Jennewine, Claude Perdrillat, Stephane Couvreur, Robert Balgley,
Perry Evans and a qualified and independent director nominated in accordance
with the Voting Agreement.
(l) Proceeding Satisfactory. All corporate and legal proceedings
taken by the Company in connection with the transactions contemplated by this
Agreement and all documents and instruments relating to such transactions shall
be reasonably satisfactory in substance and form to the Investors, and they
shall have received all such counterpart originals or certified or other copies
of such documents as they may reasonably request.
(m) Corporate Consents. The Company shall have obtained all Board
of Director and stockholder consents, waivers and other instruments necessary in
connection with the execution and delivery of this Agreement and the Related
Agreements and the consummation of the transactions contemplated herein and
therein.
(n) Conversion of Series A-C Preferred Stock; Amendment to
Certificate. The Restated Certificate shall provide that each share of Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock of the
Company outstanding immediately prior to the Closing (the "Prior Preferred
Stock") shall automatically convert into one share of Common Stock
simultaneously with the Closing and that each share of Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock of the Company that is
authorized but unissued shall be cancelled simultaneously with the Closing. The
Company shall have obtained all Board of Director and stockholder consents
necessary to authorize the officers of the Company to file, immediately
following such automatic conversion of the Prior Preferred Stock, the Restated
Certificate, as a result of which there shall be no authorized Prior Preferred
Stock thereunder.
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(o) Conversion of Webb Note. The Company shall have taken all
steps and obtained all consents and waivers necessary to (i) cause all amounts
then owed under the Webb Note to convert into Shares at the Closing and (ii)
retire the Webb Note.
(p) Minimum Investment at the Closing. The Investors shall invest
a minimum of $7,200,000 (including all cancellation of indebtedness under the
Webb Note) at the Closing. .
(q) Delivery of Documents. The Company shall have executed and
delivered to the Investors the following documents on or prior to the Closing
Date:
(i) Certificates representing the Shares to be purchased and
sold at the Closing;
(ii) The Investors Rights Agreement duly executed by the
Company;
(iii) The Right of First Refusal Agreement duly executed by
the Company;
(iv) The Voting Agreement duly executed by the Company;
(v) A certificate executed by the chief executive officer
and the chief financial officer of the Company and dated as of the Closing Date
(or the date of any Subsequent Closing), certifying to the satisfaction or
fulfillment by the Company of each of the conditions specified in Section 4.1(a)
hereof as of the Closing Date;
(vi) A certificate of the Secretary or Assistant Secretary
of Company attaching complete and correct copies of (A) the resolutions approved
by the Board of Directors and stockholders of the Company authorizing this
Agreement and the consummation of the transactions contemplated hereby, as well
as the election of the members of the Board of Directors identified in Section
4.1(k) hereof and the filing of the Restated Certificate described in Section
4.1(n) hereof; (B) the Restated Certificate, together with all amendments
thereto, certified by the Secretary of State of the State of Delaware; and (C)
the Bylaws of the Company, together with all amendments thereto; and
(vii) Such other agreements, instruments and documents
referred to in this Section 4.1 and such other agreements, instruments and
documents as the Investors or their counsel may reasonably request.
(r) Jona Side Letter. FTTI and Intel shall have received the
executed Jona Side Letter in the form attached hereto as Exhibit F.
(s) Silicon Valley Bank. Any and all existing guarantees or
security agreements between the Company and Silicon Valley Bank shall have been
released and/or cancelled.
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(t) FTTI Waiver of Price Protection. FTTI shall have executed and
delivered to the Company a waiver of any further price protection rights
associated with its shares of the Company's Common Stock following the Series D
Preferred Stock financing.
(u) Company Business Plan. The Investors shall have received and
approved (i) a detailed business and financial plan of the Company for 2003 and
(ii) an outline of goals and operating assumptions for 2004.
(v) Filings with the Commission. The Investors shall have
received and approved the Form 8-K and all other disclosure that may be filed by
Webb with the Commission in connection with the Series D Preferred Stock
financing.
(w) License Agreement. The Company and FT shall have entered into
a license agreement with respect to a Three Million ($3,000,000) purchase
commitment from FT to the Company.
4.2 Conditions to the Company's Obligation to Close. The obligation of
the Company to consummate the transactions contemplated herein is subject to the
satisfaction, on or prior to the Closing Date, of the conditions set forth below
and applicable thereto, any of which may be waived in writing by the Company:
(a) Representations and Warranties. The representations and
warranties made by each Investor in Section 3.2 and Section 3.3 hereof shall
have been true and correct when made, and shall be true and correct on and as of
the Closing Date.
(b) Minimum Investment at the Closing. The Investors shall invest
a minimum of $7,200,000 (including all principal and interest due in connection
with the Bridge Notes) at the Closing. .
(c) Legal Investment. On the Closing Date (or the date of any
Subsequent Closing), the sale and issuance of the Shares and the proposed
issuance of the Conversion Shares shall be legally permitted by all laws and
regulations to which the Investors and the Company are subject.
(d) Securities Laws. The offer, sale and issuance to the
Investors of the Shares pursuant to this Agreement and of the Conversion Shares
upon conversion of the Shares pursuant to the Restated Certificate shall be
exempt from the registration requirements of the Securities Act and the
registration and/or qualification requirements of all applicable state
securities or "blue sky" laws, or the Company shall have made or obtained all
necessary registrations, qualifications and permits required by any federal or
state securities law or regulation for the offer and sale of the Securities;
provided that a blue sky notice filing and fee of less than $500 in any one
state shall not constitute a breach of this condition
(e) Filings, Consents, Permits, and Waivers. The Company and the
Investors shall have made all filings with any Governmental Authority required
to be made prior to the Closing (or the date of any Subsequent Closing) and
obtained any and all consents, permits and waivers necessary or appropriate for
the issuance and sale of the Shares and the Conversion
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Shares and for consummation of the transactions contemplated by this Agreement
and the Related Agreements.
(f) No Actions or Proceedings. No action, suit or proceeding by
or before any Governmental Authority shall have been asserted, instituted or
threatened by any party to restrain, prohibit or invalidate the transactions
contemplated by this Agreement or the Related Agreements.
(g) Delivery of Documents. Each Investor shall have executed and
delivered to the Company the following documents on or prior to the Closing
Date:
(i) The Investors Rights Agreement duly executed by such
Investor;
(ii) The Right of First Refusal Agreement duly executed by
such Investor;
(iii) The Voting Agreement duly executed by such Investor;
and
(iv) Such other agreements, instruments and documents
referred to in this Section 4.2 and such other agreements, instruments and
documents as the Company or its counsel may reasonably request.
(h) License Agreement. The Company and FT shall have entered into
a license agreement with respect to a Three Million ($3,000,000) purchase
commitment from FT to the Company.
(i) FTTI Waiver of Price Protection. FTTI shall have executed and
delivered to the Company a waiver of any further price protection rights
associated with its shares of the Company's Common Stock following the Series D
Preferred Stock financing.
ARTICLE 5
COVENANTS
5.1 Pre-Closing Covenants of the Company. The Company covenants and
agrees that, from and after the date hereof until the Closing Date or the date
of termination of this Agreement in the event the Closing does not occur:
(a) Conduct of Business in the Ordinary Course. The Company shall
conduct its business in the ordinary course consistent with past practice.
(b) Satisfaction of Closing Conditions. Upon the terms and
subject to the conditions set forth in this Agreement, the Company shall use
commercially reasonable efforts to take, or cause to be taken, without being
obligated to make any payment or payments to any third party or parties which,
individually or in the aggregate, exceeds $10,000 and is not otherwise legally
required to be made, all actions, and to do or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Closing and the other
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transactions contemplated hereunder, including, without limitation, (a)
obtaining all required consents, (b) defending any litigation or claims
challenging this Agreement or the consummation of any of the transactions
contemplated hereunder, including, without limitation, if the circumstances
warrant, seeking to have any stay or temporary restraining court order vacated
or reversed, and (c) the execution and delivery of any documents, agreements and
instruments (in form and substance reasonably satisfactory to the parties)
necessary to consummate the transactions contemplated hereunder and to fully
carry out the purposes of this Agreement.
(c) Restrictive Agreements. The Company will not enter into or
become obligated under any agreement or contract (excluding sales agreements
executed in the ordinary course of business) including, without limitation, any
loan agreement, promissory note (or other evidence of indebtedness), mortgage,
security agreement or lease, which by its terms prevents or restricts the
Company from performing its obligations under this Agreement, any Related
Agreements or under the terms of the Series D Preferred Stock.
(d) Reservation of Stock. As of or prior to the Closing Date, the
Company shall take, and shall request that its stockholders take, any and all
action necessary to reserve for issuance the number of shares of Common Stock
into which all of the Shares is convertible.
(e) Stock Plan. Notwithstanding the fact that the Company's Stock
Plan is currently authorized to issue up to Seven Million, Five Hundred Thousand
(7,500,000) shares of Common Stock, the Company shall not issue any shares
pursuant to the Stock Plan in excess of Five Million, Nine Hundred Fifty-Eight
Thousand, Nine Hundred Eighty-One (5,958,981) shares of Common Stock. The
Company also covenants any shares issued pursuant to the Stock Plan are subject
to a vesting/repurchase schedule over three to five years.
5.2 Post-Closing Covenants of the Company. The Company covenants and
agrees that, from and after the Closing Date and until the closing of a
Qualified Public Offering:
(a) Securities Laws Compliance. The Company shall make, in a
timely manner, any filings required by the Securities Act or the securities or
"blue sky" laws of any applicable jurisdiction in connection with the offering,
sale and issuance of the Shares and the Conversion Shares.
(b) Reservation of Stock. The Company shall take, and shall
request that its stockholders take, any and all action necessary to increase the
number of shares of Common Stock reserved for issuance as required by any
increase in the number of shares of Common Stock into which the Series D
Preferred Stock is convertible.
(c) Information Rights. So long as each Investor holds, directly
or indirectly, at least fifteen percent (15%) of the original Shares purchased
by it pursuant to this Agreement, the Company shall deliver to such Investor:
(i) as soon as practicable, but in any event within ninety
(90) days after the end of each fiscal year of the Company, (x) financial
statements for such fiscal year, including a balance sheet of the Company as of
the end of such fiscal year, and statements of income, stockholder's equity and
cash flows for such year, such year-end financial reports to be in reasonable
detail, prepared in accordance with GAAP, and audited and certified by a "Big
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Four" accounting firm or other independent public accounting firm of national
standing selected by the Company with the approval of the holders of a majority
of the outstanding Shares and (y) a management letter prepared by such firm;
(ii) as soon as practicable, but in any event within thirty
(30) days after the end of each calendar month and each fiscal quarter of the
Company, unaudited financial statements, including a balance sheet, statements
of income, stockholders' equity and cash flows, an analysis showing variations
from budget and prior periods, and management operations reviews for each such
calendar month and fiscal quarter, such financial reports to be in reasonable
detail and prepared in accordance GAAP, except that such reports may not contain
all footnotes required by GAAP and are subject to year-end adjustments;
(iii) as soon as practicable, but in any event within thirty
(30) days prior to each fiscal year-end, a projected operating budget and
strategic plan for the forthcoming fiscal year, and within ninety (90) days
after the beginning of such fiscal year, an annual comparison against the
business plan and operating budget with respect to the prior fiscal year;
(iv) such other information relating to the financial
condition, business, prospects or corporate affairs of the Company as an
Investor may from time to time reasonably request; and
(v) with respect to the financial statements called for in
this Section 5.2(c), at the time of the delivery of such financial statements, a
certificate executed by the chief executive officer or chief financial officer
of the Company certifying that such financial statements 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
operations for the period specified, subject to year-end audit adjustments.
(d) Inspection Rights. The Company shall permit, during normal
business hours and upon reasonable prior notice to management, each Investor and
such person as it may designate, at such Investor's expense, to visit and
inspect any of the properties of the Company, to examine its books and records
and take copies and extracts therefrom, and to discuss the affairs, finances and
accounts of the Company (including management's proposed annual operating plans)
with its officers.
(e) Existence. The Company shall at all times cause to be done
all things necessary to maintain, preserve and renew its corporate existence and
all material licenses, authorizations and permits necessary to the conduct of
its business.
(f) Properties. The Company shall maintain and keep its material
properties and assets in good repair, working order and condition (ordinary wear
and tear excepted), and from time to time make all necessary or desirable
repairs, renewals and replacements, so that its businesses may be properly and
advantageously conducted in all material respects at all times.
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(g) Taxes. The Company shall make and discharge when payable all
taxes, assessments and governmental charges imposed upon its properties or upon
the income or profits therefrom (in each case before the same becomes delinquent
and before penalties accrue thereon) and all material claims for labor,
materials or supplies which if unpaid would by law become a lien upon any of its
property unless and to the extent that the same are being contested in good
faith and by appropriate proceedings and adequate reserves (as determined in
accordance with GAAP, consistently applied) have been established on its books
and financial statements with respect thereto.
(h) Obligations. The Company will comply with all other material
obligations which it incurs pursuant to any contract, agreement or arrangement
to which the Company is a party, whether oral or written, as such obligations
become due, unless and to the extent that (a) the failure to so comply would not
(either individually in the aggregate) reasonably be expected to have a Material
Adverse Effect; (b) the failure to so comply is cured by the Company within
forty-five (45) days of its discovery; or (c) the same are being contested in
good faith and by appropriate proceedings and adequate reserves (as determined
in accordance with GAAP, consistently applied) have been established on its
books and financial statements with respect thereto.
(i) Books and Records. The Company shall maintain proper books of
record and account which present fairly its financial condition and results of
operations and make provisions on its financial statements for all such proper
reserves as in each case are required in accordance with GAAP, consistently
applied.
(j) Property Damage Insurance. The Company shall obtain and
maintain property damage insurance in an amount and type sufficient to provide
the coverage reasonably necessary to protect the assets and business of the
Company.
(k) Actions Requiring Shareholder Approval. The Company shall not
do any of the following without the prior approval of Investors holding 66 2/3%
of the Shares: (i) engage in, or participate in, or facilitate, any transaction
or enter into any agreement, contract or arrangement for the distribution of the
Company's securities to the public except in connection with a Qualified Public
Offering, (ii) assist in or facilitate or recognize any transaction or series of
transactions if, as a result of such transaction or series of transactions, any
shareholder of the Company would own, either directly or indirectly, more than
49% of the Company's authorized share capital (calculated either by ownership
percentage or voting power), or (iii) take any action, other than in connection
with a Qualified Public Offering, that would result in the Company becoming a
reporting company under the Securities Exchange Act of 1934, as amended.
(l) Purchases From Webb. The Company shall purchase certain
software products, as set forth and described in Schedule 5.2(l), from Webb at a
rate of $12,000 per month for a period of twenty-one (21) months commencing
April 1, 2003. In addition, the Company shall purchase certain assets, as set
forth and described in Schedule 5.2(l), at a purchase price of $200,000 no later
than August 31, 2004.
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(m) Stock Plan. The Company shall take any and all action
necessary to decrease the number of authorized shares in its Stock Plan to Five
Million, Nine Hundred Fifty-Eight Thousand, Nine Hundred Eighty-One (5,958,981)
shares of Common Stock and to ensure that any shares issued pursuant to the
Stock Plan after the Closing are subject to a vesting/repurchase schedule over
three to five years. Prior to such decrease in the authorized number of shares,
the Company shall not issue any shares pursuant to the Stock Plan in excess of
Five Million, Nine Hundred Fifty-Eight Thousand, Nine Hundred Eighty-One
(5,958,981) shares of Common Stock.
5.3 Post-Closing Covenants of the Investors. Each Investor covenants
and agrees with the Company and each other Investor that, from and after the
Closing Date and until the closing of a Qualified Public Offering:
(a) No Majority Ownership of the Company. Unless previously
approved in writing by each of the Investors, no Investor will engage in any
transaction or enter into any agreement, contract or arrangement if, as a result
of such transaction, agreement, contract or arrangement, such Investor would
own, either directly or indirectly, more than 49% of the Company's authorized
share capital (calculated either by ownership percentage or voting power).
(b) No Private Agreements. Each Investor will not enter into any
agreement, contract or arrangement with any other Investor with respect to the
voting of such Investor's shares of the Company in any matter that must be
approved by the Company's shareholders under law or under this Agreement or any
of the Related Agreements
5.4 Additional Post-Closing Covenants of Webb. Webb covenants and
agrees with the Company and each of the other Investors that, from and after the
Closing Date and until the earlier to occur of (i) a Qualified Public Offering;
(ii) a sale of the entire capital stock of the Company for consideration that is
solely in the form of cash or freely tradable public securities; (iii) a sale of
all or substantially all of the Company's assets for consideration that is
solely in the form of cash or freely tradable public securities; or (iv) the
date on which Webb ceases to be a shareholder of the Company, it will not make
any distributions or other transfer of any of its shares in the Company to
Webb's shareholders which distribution or transfer would have the result of
making the Company a reporting company under the Securities Exchange Act of
1934, as amended, unless the distribution or transfer has been approved by
Investors holding 66-2/3% of the Shares.
ARTICLE 6
SURVIVAL; INDEMNIFICATION
6.1 Survival of Representations and Warranties. All representations
and warranties contained herein shall survive the execution and delivery of this
Agreement and the Closing for one year from the date of the last Subsequent
Closing. All statements contained in a certificate or other instrument delivered
by the Company pursuant to this Agreement in connection with the transactions
contemplated by this Agreement shall constitute representations and warranties
by the Company under this Agreement.
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6.2 Survival of Covenants and Agreements. Subject to Sections 5.2 and
7.4 hereof, all covenants, agreements and obligations contained herein shall
survive indefinitely until, by the respective terms, they are no longer
operative.
6.3 Indemnification. The Company will indemnify and defend each
Investor and all of their officers, directors, employees, agents and Affiliates
(collectively, the "Indemnified Parties") against, and hold each Indemnified
Party harmless from, all Losses incurred by the Indemnified Parties or any of
them as a result of, arising out of, or relating to (i) the execution, delivery,
performance or enforcement of this Agreement, the Related Agreements or any
other instrument, document or agreement executed pursuant hereto by any of the
Indemnified Parties, (ii) the inaccuracy of any representation or warranty of
the Company contained in this Agreement, (iii) the breach of any covenant or
agreement of the Company contained in this Agreement, or (iv) any investigation
or proceeding by any Person not a party hereto (nor an Affiliate of a party
hereto) against the Company or any Indemnified Party which investigation or
proceeding requires the participation of, or is commenced or filed against, one
or more of the Indemnified Parties because of this Agreement and the
transactions contemplated herein; provided that, the Company shall have no
obligation under this Section 6.3 to the extent of Losses that are determined
pursuant to a final and non-appealable judicial ruling, order or judgment to be
a result of an Indemnified Party's gross negligence or willful misconduct. The
Company agrees to reimburse each Indemnified Party promptly for all such Losses
as they are incurred by such Indemnified Party. Each Indemnified Party shall
reimburse the Company for any payments made by the Company to such Indemnified
Party pursuant to this Section 6.3 to the extent of Losses which are finally
determined in a judicial proceeding to be a result of the Indemnified Party's
gross negligence or willful misconduct. The obligations of the Company to each
Indemnified Party under this Section 6.3 will be separate obligations. The
obligations of the Company under this Section 6.3 will survive any transfer of
securities by any Investor and the termination of this Agreement or any of the
other agreements referred to above in this Section 6.3.
6.4 Claims for Indemnification. Whenever any claim shall arise for
indemnification pursuant to Section 6.3 hereof, the Indemnified Party shall
promptly (and in no event more than 30 days after the later to occur of
incurring the Losses or discovering the facts giving rise to the claim) notify
the Company of the claim and, when known, the facts constituting the basis for
such claim; provided that an Indemnified Party's failure to give such notice
shall not affect any rights or remedies of the Indemnified Party hereunder with
respect to indemnification for Losses except to the extent that the Company is
materially prejudiced thereby. In the event of any claim for indemnification
pursuant to Section 6.3 hereof resulting from or in connection with any claim or
legal proceedings by a third party, the notice to the Company shall specify, if
known, the amount or an estimate of the amount of the liability arising
therefrom. The Indemnified Party shall not settle or compromise any claim by a
third party for which they are entitled to indemnification pursuant to Section
6.3 hereof, without the prior written consent of the Company (which shall not be
unreasonably withheld) unless suit shall have been instituted against them and
the Company shall not have taken control of such suit after notification thereof
as provided in this Section 6.4; provided, however, that the Indemnified Party
is hereby authorized to file any motion, answer or other pleading that it shall
deem necessary or appropriate to protect its interests.
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6.5 Defense. In connection with any claim giving rise to indemnity
pursuant to Section 6.3 hereof or resulting from or arising out of any claim or
legal proceeding by a Person who is not a party to this Agreement nor an
Affiliate of a party hereto, the Company, at its sole cost and expense may, upon
written notice to the Indemnified Parties, assume the defense of any such claim
or legal proceeding and thereafter diligently conduct the defense thereof. The
Indemnified Parties shall be entitled to participate in (but not control) the
defense of any such action with their counsel and at their own expense; provided
that, if in the reasonable opinion of an Indemnified Party, any claim or demand
involves an issue or matter that could have an adverse effect on its or its
Affiliates' business, operations, assets, properties, prospects or reputation,
then such Indemnified Party shall have the right to control the defense or
settlement of such claim or demand, and the reasonable costs and expenses
thereof shall be included as part of the Company's indemnification obligations
hereunder. Each party shall cooperate fully with the other, such cooperation to
include, without limitation, attendance at depositions and the provision of
relevant documents as may be reasonably requested by the other parties.
6.6 Limits. Notwithstanding any other provision in this Agreement or
any rule of law or equity:
(a) The Company shall have no liability to an Indemnified Party
for matters related to this Agreement or the subject matter hereof (i) for any
claims made after the expiration of the survival periods set forth in Sections
6.1 and 6.2 hereof, or (ii) as a result of any occurrence, matter or thing the
occurrence, existence or non-disclosure of which constitutes a willful breach or
failure of any representation, warranty, covenant or other obligation of any
Investor hereunder; and
(b) An Indemnified Party shall not be entitled to recover any
indirect, consequential or special damages from the Company.
ARTICLE 7
MISCELLANEOUS
7.1 Expenses. The Company hereby agrees to (a) reimburse Intel for its
out-of-pocket expenses, including reasonable consulting and attorney's fees,
incurred by Intel in connection with its due diligence and the development,
preparation and execution of this Agreement and all other documents and
instruments relating thereto; provided that the aggregate reimbursement for such
fees and expenses shall not exceed Sixty Thousand Dollars ($60,000) and (b)
reimburse Webb for certain obligations owed by the Company to Webb, as fully
detailed in Schedule 7.1. Such reimbursement may be withheld by the applicable
Investor from the amount to be delivered to the Company in payment for its
Shares.
7.2 Legend on Stock Certificates. Each certificate representing shares
of Series D Preferred Stock and Common Stock held by any Investor or any
transferee of any Investor shall bear the following legend (in addition to any
legends required by the Related Agreements) until such time as the shares
represented thereby are no longer subject to the provisions hereof:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES
-27-
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES
LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER
EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.
7.3 Remedies. In case any one or more of the covenants and/or
agreements set forth in this Agreement shall have been breached by the Company
or the Investors, any of the Investors or the Company (as the case may be) may
proceed to protect and enforce its rights either by suit in equity and/or by
action at law, including, but not limited to, an action for damages as a result
of any such breach and/or an action for specific performance or injunctive
relief with respect to any such covenant or agreement contained in this
Agreement.
7.4 Duration of Agreement. From and after the Closing, except as
otherwise provided in Article 6 hereof, the rights and obligations of the
parties under this Agreement shall terminate as to each Investor and the Company
upon the consummation of a Qualified Public Offering.
7.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic substantive laws of the State of Delaware,
without giving effect to any choice or conflict of law provision or rule that
would cause the application of the laws of any other jurisdiction.
7.6 Notices. All notices and other communications given to any party
hereto pursuant to this Agreement shall be in writing and shall be hand
delivered, or sent either by (a) electronic mail; (b) an overnight express
courier service that provides written confirmation of delivery; or (c) facsimile
transmission with written confirmation by the sending machine or with telephone
confirmation of receipt (provided that a confirming copy is sent by overnight
express courier service that provides written confirmation of delivery),
addressed as follows:
Company: Jabber, Inc.
1899 Wynkoop Street
Denver, CO 80202
Tel: 303-308-3255
Fax: 303-308-3215
E-mail: ghagan@jabber.com
Attention: COO/CFO
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with a copy to: Jabber, Inc.
1899 Wynkoop Street
Denver, CO 80202
Tel: 303-308-3224
Fax: 303-308-3215
E-mail: lbranson@webb.net
Attention: Secretary/General Counsel
The Investors: To the address of each Investor set forth on the
signature page hereto
with a copy to: Gibson Dunn & Crutcher LLP
1530 Page Mill Road
Palo Alto, CA 94304
Tel: (650) 849-5311
Fax: (650) 849-5333
Attention: Greg Davidson, Esq.
and
Davis Graham & Stubbs LLP
1550 Seventeenth Street
Suite 500
Denver, CO 80202
Tel: (303) 892-9400
Fax: (303) 893-1379
Attention: Chris Richardson, Esq.
and
Robert Attai, Esq.
Any communication given in conformity with this Section 7.6, shall be effective
upon the earlier of actual receipt or deemed delivery. Delivery shall be deemed
to have occurred as follows: if telecopied or sent by electronic mail, upon
written confirmation by the sending machine of effective transmission or upon
telephone confirmation of receipt; and if sent by overnight express courier
service, the next business day. Any party may at any time change its address for
receiving communications pursuant to this Section 7.6 by giving notice of a new
address in the manner provided herein.
7.7 Entire Agreement. This Agreement and the agreements referenced
herein constitute the entire agreement between the parties hereto pertaining to
the subject matter hereof, and all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties with respect thereto are hereby superseded in their entirety except as
specifically provided herein.
7.8 Assignment. None of the rights and obligations of any party to
this Agreement may be assigned without the prior written consent of all of the
other parties to this
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Agreement, and any purported assignment made without such consent shall be void.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective permitted transferees, successors and
assigns (each of which transferees, successors and permitted assigns shall be
deemed to be a party hereto for all purposes hereof).
7.9 Amendment; Waiver. Any term of this Agreement may be amended and
the observance of any term hereof may be waived (either prospectively or
retroactively and either generally or in a particular instance) only with the
written consent of each Investor and the written consent of the Company.
7.10 Time Periods. In computing the number of days for any purpose of
this Agreement, all days shall be counted including Saturdays, Sundays and
holidays, except that if the last day of any period occurs on a Saturday, Sunday
or holiday, the period will be deemed extended to the end of the next succeeding
day which is not a Saturday, Sunday or holiday. A holiday for purposes of this
Agreement shall mean those days on which banks in the State of Delaware may, or
are obligated to, remain closed.
7.11 Headings. The Article, Section and subsection headings are
included solely for convenient reference and shall not be deemed to provide an
accurate description of the content of any Article, Section or subsection hereof
or otherwise affect the meaning or interpretation of any of the provisions
hereof.
7.12 Gender. All pronouns used herein shall include all genders and
the singular and plural as the context requires.
7.13 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 but one and the same instrument.
7.14 Delivery by Facsimile. This Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall re-execute original forms thereof and deliver them to
all other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.
7.15 Interpretation of Agreement. The parties hereto acknowledge and
agree that this Agreement has been negotiated at arm's-length and among parties
equally sophisticated and knowledgeable in the matters dealt with in this
Agreement. Accordingly, any rule of law or legal decision that would require
interpretation of any ambiguities in this Agreement against the party that has
drafted it is not applicable and is waived. The provisions of this Agreement
shall
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be interpreted in a reasonable manner to effect the intent of the parties as set
forth in this Agreement.
[Signature Pages Follow]
-31-
IN WITNESS WHEREOF, the parties hereto have executed this Series D
Preferred Stock Purchase Agreement as of the day and year first above written.
JABBER, INC.
By: /s/ Gwenael Hagan
---------------------------------------------
Name: Gwenael Hagan
Title: COO/CFO
INVESTORS:
FRANCE TELECOM TECHNOLOGIES
INVESTISSEMENTS
By: /s/ Stephane Couvreur
---------------------------------------------
Name: Stephane Couvreur
Title: General Manager
Address: 38-40 rue du General Leclerc
92794 Issy les Moulineaux Cedex 9
France
Fax #: +33 145296560
E-mail: stephane.couvreur@francetelecom.com
INTEL CAPITAL CORPORATION
By: /s/ Ravi Jacob
---------------------------------------------
Name: Ravi Jacob
Title: Vice President, Finance & Enterprise
Services Group; Asst. Treasurer, Strategic
Investments & Acquisitions
Address: 2200 Mission College Blvd.
M/S RN6-46
Santa Clara, CA 95052
Attention: Portfolio Manager
Fax Number: (408) 765-6038
E-mail: portfolio.manager@intel.com
SIGNATURE PAGE TO THE SERIES D PREFERRED STOCK PURCHASE AGREEMENT
AMONG JABBER, INC. AND THE INVESTORS NAMED HEREIN
WEBB INTERACTIVE SERVICES, INC.
By: /s/ W. R. Cullen
---------------------------------------------
Name: W. R. Cullen
Title: President & CEO
Address: 1899 Wynkoop, Suite 600
Denver, Colorado 80202
Fax #: 303-308-3215
E-mail: bcullen@webb.net
SIGNATURE PAGE TO THE SERIES D PREFERRED STOCK PURCHASE AGREEMENT
AMONG JABBER, INC. AND THE INVESTORS NAMED HEREIN
EXHIBIT A
SECURITIES TO BE ISSUED TO INVESTORS
Not included.
EXHIBIT B
INVESTORS RIGHTS AGREEMENT
================================================================================
JABBER, INC.
INVESTORS RIGHTS AGREEMENT
DATED MARCH 17, 2003
================================================================================
JABBER, INC.
INVESTORS RIGHTS AGREEMENT
THIS INVESTORS RIGHTS AGREEMENT (this "Agreement") is made effective
as of March 17, 2003, by and among JABBER, INC., a Delaware corporation (the
"Company") and those parties listed as Series D Investors on Exhibit A attached
hereto (hereinafter sometimes referred to individually as a "Series D Investor"
and collectively, as the "Series D Investors"), and those parties listed as
Prior Investors on Exhibit A attached hereto (hereinafter sometimes referred to
individually as a "Prior Investor" and collectively, as the "Prior Investors").
BACKGROUND
The Company and the Series D Investors have entered into that certain
Series D Preferred Stock Purchase Agreement dated March 17, 2003 (the "Series D
Purchase Agreement").
The Company and the Prior Investors are parties to that certain
Amended and Restated Preferred Stock Investors' Rights Agreement made and
entered into as of April 8, 2002 (the "Prior Rights Agreement").
As a condition and a material inducement to the Investors' obligations
to consummate the transactions contemplated by the Series D Purchase Agreement,
the Company and the Prior Investors have agreed to enter into this Agreement
with the Series D Investors and to terminate the Prior Rights Agreement in its
entirety as set forth therein.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound hereby, the
Investors and the Company hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Unless the contract otherwise requires, the following
terms shall have the following meanings for purposes of this Agreement:
(a) "Additional Holders" shall have the meaning set forth in
Section 2.1(a) hereof and Section 2.3(a) hereof, as the case may be.
(b) "Affiliate" shall mean, with respect to any Person, (i) a
director, officer, general or limited partner, manager, member or stockholder of
such Person, (ii) a spouse, parent, sibling or descendant of such Person (or a
trust for the benefit of any one of more of the foregoing), and (iii) any other
Person that, directly or indirectly through one or more intermediaries,
Controls, or is Controlled by, or is under common Control with, such Person.
(c) "Agreement" shall mean this Investors Rights Agreement.
(d) "Board of Directors" shall mean the Board of Directors of the
Company.
(e) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(f) "Common Stock" shall mean the Common Stock, par value $0.01
per share, of the Company.
(g) "Company" shall mean Jabber, Inc., a Delaware corporation.
(h) "Control" shall mean, with respect to any Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
(i) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and all rules and regulations promulgated thereunder.
(j) "Fully-Exercising Series D Investor" shall have the meaning
set forth in Section 3.2 hereof.
(k) "Restated Certificate" shall mean the Company's Amended and
Restated Certificate of Incorporation, including but not limited to any
certificate of designation relating to any series of preferred stock, to be
filed immediately prior to or contemporaneously with the execution of this
Agreement.
(l) "Holder" shall mean each of the Investors if such Investor
holds Registrable Securities or other securities of the Company which are
convertible into or exercisable for Registrable Securities, and any other Person
holding Registrable Securities or such other securities to whom these
registration rights have been transferred in accordance with Section 2.12
hereof; provided, however, that any Person who acquires any of the Registrable
Securities in a distribution pursuant to a registration statement filed by the
Company under the Securities Act or pursuant to a sale under Rule 144
promulgated by the Commission under the Securities Act shall not be considered a
Holder.
(m) "Initial Public Offering" shall mean the Company's initial
distribution of Common Stock in an underwritten public offering of its
securities to the general public pursuant to a registration statement filed with
and declared effective by the Commission pursuant to the Securities Act.
(n) "Initiating Holders" shall have the meaning set forth in
Section 2.1(a) hereof and Section 2.3(a) hereof, as the case may be.
(o) "Investor" or "Investors" shall mean, individually or
collectively, the Series D Investors and the Prior Investors.
-2-
(p) "New Securities" shall have the meaning set forth in Section
3.1 hereof.
(q) "Notice of Registration" shall have the meaning set forth in
Section 2.1(a) hereof and Section 2.3 hereof, as the case may be.
(r) [intentionally omitted]
(s) "Participation Right Notice" shall have the meaning set forth
in Section 3.2 hereof.
(t) "Person" shall mean any individual, partnership, limited
partnership, limited liability partnership, corporation, limited liability
company, association, trust, joint venture, unincorporated organization, and any
governmental authority or other legal or business entity of any kind.
(u) "Preferred Stock" shall mean the Series D Preferred Stock.
(v) "Prior Investor" shall have the meaning set forth in the
first paragraph of this Agreement.
(w) "Prior Rights Agreement" shall have the meaning set forth in
the Background section of this Agreement.
(x) "Pro Rata Share" shall have the meaning set forth in Section
3.1 hereof.
(y) "Qualified Public Offering" shall mean a firm commitment
underwritten public offering pursuant to a registration statement under the
Securities Act, covering the offer and sale by the Company of Common Stock at a
public offering price per share that is not less than $1.40 per share (as
appropriately adjusted for any stock dividends, splits, combinations, divisions,
recapitalizations or similar transactions affecting the Series D Preferred Stock
after the date of this Agreement) and with a total in gross offering proceeds of
not less than $20,000,000 (prior to deducting underwriter discounts and
commissions and expenses of the offering).
(z) "Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering of
effectiveness of such registration statement by the Commission.
(aa) "Registrable Securities" shall mean the Series D Registrable
Securities.
(bb) "Request for Registration" shall have the meaning set forth
in Section 2.1(a) hereof and Section 2.3 hereof, as the case may be.
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(cc) "Right of First Refusal Agreement" shall mean the Right of
First Refusal and Co-Sale Agreement of even date herewith among the Company, the
Investors and certain other stockholders of the Company.
(dd) "Series D Investor" shall have the meaning set forth in the
first paragraph of this Agreement.
(ee) "Series D Preferred Stock" shall mean the Series D
Convertible Preferred Stock, par value $0.01 per share, of the Company.
(ff) "Series D Purchase Agreement" shall have the meaning set
forth in the Background section of this Agreement.
(gg) "Series D Registrable Securities" shall mean shares of the
Company's Common Stock (i) issued upon the conversion of any Series D Preferred
Stock held by the Series D Investors, (ii) acquired for fair value by the Series
D Investors after the date hereof, (iii) issued upon conversion or exercise of
any securities of the Company acquired for fair value by the Series D Investors
after the date hereof, or (iv) issued as a dividend or other distribution with
respect to the Series D Preferred Stock or any of the shares described in the
foregoing clauses (i) through (iii).
(hh) "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
(ii) "Securities" shall mean any Common Stock, Preferred Stock or
other securities, directly or indirectly, convertible into or exercisable for
Common Stock owned by any Investor.
(jj) "Transfer" as to any securities issued by the Company, shall
mean to sell, or in any other way directly or indirectly, to transfer, assign,
distribute, give, bequeath, devise, encumber, pledge, hypothecate or otherwise
dispose of, either voluntarily or involuntarily (or a sale, or any other direct
or indirect, transfer, assignment, distribution, gift, bequest, devise,
encumbrance or other voluntary or involuntary disposition), as the case may be.
(kk) "Violation" shall have the meaning set forth in Section
2.7(a) hereof.
ARTICLE 2
REGISTRATION RIGHTS
2.1 Demand Registration Rights.
(a) Initiation. If at any time after the six-month anniversary of
the completion of the Initial Public Offering, the Company shall receive a
written request from the holders of forty-five percent (45%) of the Series D
Registrable Securities then outstanding (the "Initiating Holders") that the
Company effect the registration under the Securities Act and registration or
qualification under all applicable state securities and "blue sky" laws of a
number of the Registrable Securities then outstanding (a "Request for
Registration"), the Company shall
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(a) within ten (10) days of receipt thereof, give written notice of such
proposed registration (the "Notice of Registration") to all other Holders (the
"Additional Holders") and (b) as soon as practicable, use commercially
reasonable efforts to effect such registration under the Securities Act and take
all steps as are reasonably necessary under the Securities Act and all
applicable state securities and "blue sky" laws to permit the sale or other
disposition of (i) all Registrable Securities which the Company has been
requested to register by the Initiating Holders and (ii) all Registrable
Securities which the Company has been requested, within twenty (20) days after
receipt of the Company's Notice of Registration, to register by the Additional
Holders. The Company shall not be obligated to effect, or take any action to
effect, any such registration pursuant to this Section 2.1(a):
(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, qualification, or compliance, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act;
(ii) during the period starting with the date sixty (60)
days prior to the Company's good faith estimate of the date of filing of, and
ending on a date ninety (90) days after the effective date of, a
Company-initiated registration; provided that the Company is actively employing
in good faith commercially reasonable efforts to cause such registration
statement to become effective; or
(iii) if the Initiating Holders propose to dispose of shares
of Registrable Securities which may be immediately registered on Form S-3
pursuant to a request made under Section 2.3 hereof.
(b) Underwritten Offering.
(i) If the Initiating Holders intend to distribute the
Registrable Securities covered by their Request for Registration by means of an
underwriting, they shall so advise the Company as a part of their Request for
Registration and the Company shall include such information in the Notice of
Registration. The managing underwriter shall be selected by the holders of a
majority of the Series D Registrable Securities then outstanding with the
approval of the Company, which approval shall not be unreasonably withheld. The
inclusion of any Registrable Securities in such registration shall be
conditioned upon the Holder thereof agreeing to participate in such underwriting
and entering into an underwriting agreement with the managing underwriter in
customary form containing terms and conditions no more or less favorable than
those that apply to other securities of the same class to be included in such
registration.
(ii) Notwithstanding any other provision of this Section
2.1, if the managing underwriter advises the Initiating Holders and the Company
in writing that marketing factors require a limitation of the number of shares
to be underwritten and that the total number of shares requested to be
underwritten will exceed the maximum number which can be marketed without
jeopardizing the success of the entire offering, then the Company shall so
advise all Initiating Holders and all Additional Holders and shall exclude from
such underwriting the minimum number of Registrable Securities as is necessary
in the opinion of the managing
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underwriter to reduce the size of the offering to the maximum number of
securities that can be successfully marketed; provided, however, that no such
exclusion shall reduce the amount of Registrable Securities included in the
registration below thirty-five percent (35%) of the total amount of securities
requested by the Holders to be included in such registration. Unless otherwise
agreed by the Holders affected by any such reduction, such reduction shall be
allocated among the Holders on a pro rata basis based on the number of
Registrable Securities requested to be registered by each Holder; provided,
however, that, prior to any reduction in the number of shares of Registrable
Securities included in such registration, the maximum number of securities, if
any, other than Registrable Securities, being included for the account of
Persons other than the Holders shall be excluded as is necessary to reduce the
size of the offering to the maximum number of securities that can be
successfully marketed. To facilitate the allocation of shares in accordance with
the above provisions, the Company or the managing underwriter may round the
number of shares allocated to any Holder to the nearest 1000 shares. No
Registrable Securities excluded from the underwriting by reason of the managing
underwriter's marketing limitation shall be included in such registration.
(iii) If any Holder of Registrable Securities disapproves of
the terms of the underwriting, such Holder may elect to withdraw therefrom by
written notice to the Company, the managing underwriter and the Initiating
Holders. The Registrable Securities and/or other securities so withdrawn shall
also be withdrawn from registration, and such Registrable Securities shall not
be transferred in a public distribution prior to ninety (90) days after the
effective date of such registration, or such other shorter period of time as the
managing underwriter may require. If by the withdrawal of such Registrable
Securities a greater number of Registrable Securities held by other Holders may
be included in such registration (up to the maximum of any limitation imposed by
the underwriters), then the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities in the same proportion and manner used in determining any
reduction based on the underwriter limitation in Section 2.1(b)(ii) hereof.
(iv) If the managing underwriter has not limited the number
of Registrable Securities to be underwritten, the Company may include securities
for its own account or for the account of others in such registration if the
managing underwriter and the holders of a majority of the Series D Registrable
Securities then outstanding so agree and if the number of Registrable Securities
which would otherwise have been included in such registration and underwriting
will not thereby be limited.
(v) The Company shall permit the managing underwriter and
counsel to the managing underwriter at the Company's expense to visit and
inspect any of the properties of the Company, examine its books and records,
take copies and extracts therefrom and discuss the affairs, finances and
accounts of the Company with its officers, employees and public accountants (and
by this provision the Company hereby authorizes said accountants to discuss with
such managing underwriter and such counsel its affairs, finances and accounts),
at reasonable times and upon reasonable notice, with or without a representative
of the Company being present.
(c) Number of Demand Registrations. Notwithstanding any other
provision of this Section 2.1, the Company shall not be obligated to effect, or
to take any action
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to effect, any registration pursuant to this Section 2.1 (i) unless the
Registrable Securities proposed to be included in the registration have a
proposed aggregate offering price of at least Five Million Dollars ($5,000,000)
or (ii) after the Company has effected two (2) registrations at the request of
the Holders pursuant to this Section 2.1 and such registrations have been
declared or ordered effective and the securities offered pursuant to such
registrations have been sold. A registration that covers Registrable Securities
together with securities for the Company's own account or for the account of
others shall be deemed a registration pursuant to this Section 2.1 if
Registrable Securities constitute more than fifty percent (50%) of the total
offering on the effective date of the registration statement but shall not be
deemed to be one of the registrations subject to the limitation on the number of
registrations set forth in this Section 2.1(c) if Registrable Securities
constitute fifty percent (50%) or less of the total offering on the effective
date of the registration statement.
(d) Company Deferral. If the Board of Directors makes a good
faith determination that it would be seriously detrimental to the Company and
its stockholders for a registration statement to be filed on or before the date
filing would be required in connection with the Request for Registration and it
is therefore essential to defer the filing of such registration statement to
effect such registration, the Company shall deliver to the Initiating Holders a
certificate signed by the chief executive officer of the Company to such effect
and shall have the right to defer taking action with respect to such filing for
a reasonable period not to exceed ninety (90) days; provided, that the Company
shall have the right to defer taking such action up to only two (2) times in any
twelve (12) month period.
2.2 "Piggyback" Registration Rights.
(a) Notice of Registration. If at any time or from time to time
the Company shall determine to register any of its securities, either for its
own account or the account of a security holder or holders, other than (i)
pursuant to a Request for Registration, (ii) a registration relating solely to
employee benefit plans, (iii) a registration relating to the offer and sale of
non equity-linked debt securities, (iv) a registration relating directly or
indirectly to a transaction described in Commission Rules 145(a)(1), 145(a)(2)
or 145(a)(3), or (v) a registration on any form that does not permit secondary
sales, the Company shall (A) as soon as practicable, and in any event within
twenty (20) days, before the Company files a registration statement, give
written notice of the proposed registration to each Holder and (B) upon the
written request of each Holder to include in such registration statement all or
any part of the Registrable Securities held by such Holder given within ten (10)
days after receipt by such Holder of the Company's notice, subject to the
provisions of Section 2.2(b) hereof, use commercially reasonable efforts to
cause all of the Registrable Securities that each such Holder has requested to
be registered to be included in the Company's registration statement (and to be
registered and qualified under all applicable state securities and "blue sky"
laws) so as to permit the sale or other disposition of such Registrable
Securities.
(b) Underwritten Offering.
(i) If the securities the Company determines to register are
to be distributed through an underwritten offering, the Company shall so advise
the Holders of Registrable Securities in the notice described in Section 2.2(a)
hereof. In such event, (i) the
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managing underwriter shall be selected by the Company with the approval of the
holders of a majority of the Series D Registrable Securities then outstanding,
which approval shall not be unreasonably withheld, and (ii) the right of any
Holder to include Registrable Securities in a registration pursuant to this
Section 2.2 shall be conditioned upon the Holder thereof agreeing to participate
in such underwriting and entering into an underwriting agreement with the
managing underwriter in customary form containing terms and conditions no more
or less favorable than those that apply to the securities of the Company or
other securities of the same class to be included in such registration.
(ii) Notwithstanding any other provision of this Section
2.2, if the managing underwriter advises the Company in writing that marketing
factors require a limitation of the number of shares to be underwritten and that
the total number of shares requested to be underwritten will exceed the maximum
number which can be marketed without jeopardizing the success of the entire
offering, then the Company shall so advise all Holders and shall exclude from
such underwriting (A) first, the maximum number of securities, if any, other
than Registrable Securities, being included for the account of Persons other
than the Company as is necessary to reduce the size of the offering to the
maximum number of securities that can be successfully marketed and (B) second,
the minimum number of Registrable Securities as is necessary in the opinion of
the managing underwriter to reduce the size of the offering to the maximum
number of securities that can be successfully marketed; provided that, without
the written consent of the holders of a majority of the Series D Registrable
Securities requested to be registered, (x) in no event will securities of any
Persons other than the Company be included in such registration unless all of
the Registrable Securities requested to be registered are included and (y) no
such reduction shall reduce the amount of Registrable Securities included in the
registration below thirty-five percent (35%) of the total amount of securities
included in such registration. Unless otherwise agreed by the Persons affected
by any reduction set forth in clauses (x) or (y) above, respectively, such
reduction shall be allocated among such Persons on a pro rata basis based on the
number of securities requested to be registered by each Person. To facilitate
the allocation of shares in accordance with the above provisions, the Company or
the managing underwriter may round the number of shares allocated to any Person
to the nearest 1000 shares. No Registrable Securities excluded from the
underwriting by reason of the managing underwriter's marketing limitation shall
be included in such registration.
(iii) If any Holder of Registrable Securities disapproves of
the terms of the underwriting, such Holder may elect to withdraw therefrom by
written notice to the Company, the managing underwriter and the other Holders.
The Registrable Securities and/or other securities so withdrawn shall also be
withdrawn from registration, and such Registrable Securities shall not be
transferred in a public distribution prior to one hundred and eighty (180) days
after the effective date of such registration, or such other shorter period of
time as the managing underwriter may require. If by the withdrawal of such
Registrable Securities a greater number of Registrable Securities held by other
Holders may be included in such registration (up to the maximum of any
limitation imposed by the underwriters), then the Company shall offer to all
Holders who have included Registrable Securities in the registration the right
to include additional Registrable Securities in the same proportion and manner
used in determining any reduction based on the underwriter limitation in Section
2.2(b)(ii) hereof.
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(c) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.2 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration.
2.3 Registrations on Form S-3.
(a) Initiation. If at such time as the Company shall have
qualified for the use of Form S-3 (or any successor form promulgated under the
Securities Act), the Company shall receive a written request from any Holder or
Holders (each an "Initiating Holder") that the Company effect the registration
on Form S-3 (a "Request for Registration"), the Company shall (a) within ten
(10) days of receipt thereof, give written notice of such proposed registration
(the "Notice of Registration") to all other Holders (the "Additional Holders")
and (b) as soon as practicable, use commercially reasonable efforts to effect
such registration under the Securities Act and take all steps as are reasonably
necessary under the Securities Act and all applicable state securities and "blue
sky" laws to permit the sale or other disposition of (i) all Registrable
Securities which the Company has been requested to register by any Initiating
Holder and (ii) all Registrable Securities which the Company has been requested,
within twenty (20) days after receipt of the Company's Notice of Registration,
to register by the Additional Holders.
(b) Underwritten Offering. If the Initiating Holders intend to
distribute the Registrable Securities covered by the Request for Registration by
means of an underwriting, the substantive provisions of Section 2.1(b) hereof
shall apply to any registration on Form S-3 requested pursuant to Section 2.3
hereof.
(c) Limitations. Notwithstanding any other provision of this
Section 2.3, the Company shall not be obligated to effect, or to take any action
to effect, any registration pursuant to this Section 2.3 (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, qualification, or
compliance, unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act; (ii) unless
the Registrable Securities proposed to be included in the registration have a
proposed aggregate offering price of at least One Million Dollars ($1,000,000)
or (iii) in the event the Company has effected a registration on Form S-3 at the
request of any Holders pursuant to this Section 2.3 within the previous six (6)
months and such registration has been declared or ordered effective and the
securities offered pursuant to such registration have been sold.
(d) Effect on Number of Demand Registrations. A registration
effected pursuant to this Section 2.3 shall not be counted as a demand
registration for purposes of the limitation on the number of demand
registrations set forth in Section 2.1(c) hereof.
2.4 Information from Holders. Notices and requests delivered by
Holders to the Company pursuant to this Article 2 shall contain such information
regarding the Registrable Securities to be so registered and the intended method
of disposition thereof as shall reasonably be required in connection with the
action to be taken. Each Holder hereby agrees to provide the Company, or its
agents or designees, with all information reasonably required in connection with
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the registration of any Registrable Securities under the Securities Act or the
registration and qualification under any applicable state securities or "blue
sky" law.
2.5 Payment of Registration Expenses. The costs and expenses of all
registrations under the Securities Act, all registrations and qualifications
under any applicable state securities or "blue sky" law, and of all other
actions which the Company is required to take or effect pursuant to this Article
2, shall be paid by the Company or holders of other securities of the Company
other than Registrable Securities, if any (including, without limitation, all
registration and filing fees, printing expenses, auditing costs and expenses,
and the fees and disbursements of counsel for the Company and one special
counsel for the Holders selected by the holders of a majority of the Series D
Registrable Securities then outstanding (the "Special Counsel")) and the Holders
shall pay only the underwriting discounts and commissions, transfer taxes and
fees and disbursements of any representative of any Holder, other than the
Special Counsel, if any, relating to the Registrable Securities sold by them.
Notwithstanding the foregoing, the Company shall not be required to pay for any
expenses of any registration proceeding begun pursuant to Sections 2.1 and 2.3
hereof if the registration request is subsequently withdrawn at the request of
the holders of a majority of the Registrable Securities to be registered or
because a sufficient number of Holders shall have withdrawn so that the minimum
offering conditions set forth in Sections 2.1 and 2.3 hereof are no longer
satisfied (in which case all participating Holders shall bear such expenses pro
rata among each other based on the number of Registrable Securities requested to
be so registered), unless the holders of a majority of the Registrable
Securities agree to forfeit their rights to one (1) demand registration pursuant
to Section 2.1.
2.6 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities pursuant to this Agreement, the
Company shall effect the registration and the sale of such Registrable
Securities in accordance with the intended method of distribution thereof, and
pursuant thereto, the Company shall, as expeditiously as reasonably possible,
use commercially reasonable efforts to:
(a) Prepare and file with the Commission a registration statement
with respect to such Registrable Securities and use commercially reasonable
efforts to cause such registration statement to become effective (provided that
no later than five (5) days before filing a registration statement or prospectus
or any amendments or supplements thereto, the Company shall furnish to the
Special Counsel copies of all such documents proposed to be filed, which
documents shall be subject to the reasonable review and comment of the Special
Counsel).
(b) Notify each holder of Registrable Securities covered thereby
of the effectiveness of each registration statement filed hereunder and prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period of not less
than one hundred twenty (120) days and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such registration
statement.
(c) Furnish to the Holders such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus
included in such registration
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statement(including each preliminary prospectus), in conformity with the
requirements of the Securities Act, and such other documents incident thereto as
they may reasonably request in order to facilitate the disposition of
Registrable Securities owned by them.
(d) Register and qualify the securities covered by such
registration statement under such other securities or "blue sky" laws of such
jurisdictions as shall be reasonably requested by the Holders; provided, that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
(e) In the event of an underwritten public offering, enter into
such customary agreements (including underwriting agreements in customary form)
and take all such actions pursuant thereto as the holders of a majority of the
Series D Registrable Securities being sold or the underwriters reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities. Each Holder participating in such underwriting shall also enter into
and perform its obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and, at the request of any Holder, prepare a supplement or amendment
to such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing; provided that each Holder of Registrable Securities
agrees not to deliver any prospectuses following receipt of any such notice by
the Company until such time as such supplement or amendment has been provided to
the Holders.
(g) Furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale, if such securities are being sold
through underwriters, (i) an opinion, dated as of such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters and (ii) a letter dated as of such date,
from the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters.
(h) Cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use commercially
reasonable efforts to secure designation of all such Registrable Securities
covered by such registration statement as a Nasdaq national market system
security within the meaning of Rule 11Aa2-1 under the Exchange Act.
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(i) Provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement.
(j) Subject to execution of a customary confidentiality
agreement, make available for inspection by a representative of the sellers of
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant or other
agent retained by any such sellers' representatives or underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors, employees and independent
accountants to supply all information reasonably requested by any such sellers'
representative, underwriter, attorney, accountant or agent in connection with
such registration statement; provided, however, that the Company may withhold
access to any such financial or other records, pertinent corporate documents,
properties or information if it reasonably determines that disclosure thereof
would have a material adverse affect on the competitive position of the Company.
(k) Comply with all applicable rules and regulations of the
Commission and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve (12)
months beginning with the first day of the Company's first full calendar quarter
after the effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
(l) Permit any Holder, which Holder, based upon the reasonable
opinion of such holder's counsel, might be deemed to be an underwriter or a
controlling person of the Company, to participate in the preparation of such
registration or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable judgment
of such holder and its counsel should be included.
(m) In the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the issuance of any related prospectus or suspending the
qualification of any Common Stock included in such registration statement for
sale in any jurisdiction, the Company shall use commercially reasonable efforts
promptly to obtain the withdrawal of such order.
2.7 Indemnification. In the event any Registrable Securities are
included in a registration statement under Sections 2.1, 2.2 and 2.3 hereof:
(a) Indemnification by the Company. To the extent permitted by
law, the Company will indemnify and hold harmless each Holder, the partners,
officers, directors, managers, stockholders and members of each Holder, any
underwriter (as defined in the Securities Act) for such Holder and each person,
if any, who controls such Holder or underwriter within the meaning of the
Securities Act or the Exchange Act, against any losses, claims, damages, or
liabilities (joint and/or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any of the following statements, omissions or violations
(collectively a "Violation") by the Company: (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration
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statement, including any preliminary prospectus or final prospectus contained
therein or any amendment or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law in connection with the
offering covered by such registration statement, and the Company will pay as
incurred to each such Holder, partner, officer, director, manager, stockholder,
member, underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 2.7(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 written consent of the Company, which consent
shall not be unreasonably withheld, nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, director, manager,
stockholder, member, underwriter or controlling person of such Holder.
(b) Indemnification by the Holders. To the extent permitted by
law, each Holder will, if Registrable Securities held by such Holder are
included in the securities as to which such registration, qualifications or
compliance is being effected, indemnify and hold harmless the Company, each of
its directors, its officers, its stockholders and each person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter
and any other Holder selling securities under such registration statement or any
of such other Holder's partners, directors, managers, officers, stockholders or
members or any person who controls such Holder, against any losses, claims,
damages or liabilities to which the Company or any such Company director,
officer or controlling person, underwriter or other such Holder, or partner,
director, manager, officer, stockholder or member or controlling person of such
other Holder may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder specifically for use in connection with such
registration; and each such Holder will pay as incurred any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, underwriter or other Holder, or partner, officer, director,
manager, stockholder or member or controlling person of such other Holder in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 2.7(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 written consent of each such Holder, which consent shall not be unreasonably
withheld; provided further, that the obligation to indemnify shall be
individual, not joint and several, for each such Holder and that in no event
shall any indemnity under this Section 2.7 exceed the net proceeds from the
offering received by such Holder.
(c) Procedure. Promptly after receipt by an indemnified party
under this Section 2.7 of notice of the commencement of any action (including
any governmental action),
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such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 2.7, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 2.7, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 2.7. 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.
(d) Contribution. If the indemnification provided for in this
Section 2.7 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any losses, claims, damages or liabilities
referred to herein, the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall to the extent permitted by applicable law
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the Violation(s) that resulted
in such loss, claim, damage or liability, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by a court of law by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission; provided that in no event shall any contribution by
a Holder hereunder exceed the net proceeds from the offering received by such
Holder.
(e) Underwriting Agreement. 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) Survival. The obligations of the Company and Holders under
this Section 2.7 shall survive completion of any offering of Registrable
Securities in a registration statement and the termination of this agreement.
2.8 Limitation on Subsequent Registration Rights. After the date of
this Agreement, the Company shall not, without the prior written consent of the
holders of a majority
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of the Series D Registrable Securities then outstanding, enter into any
agreement with any holder or prospective holder of any securities of the Company
that would grant such holder registration rights senior to or pari passu with
those granted to the Holders hereunder.
2.9 Rule 144 Reporting. With a view to making available to the Holders
the benefits of certain rules and regulations of the Commission which may permit
the sale of the Registrable Securities to the public without registration, the
Company agrees to use commercially reasonable efforts to:
(a) Make and keep public information regarding the Company
available, as those terms are understood and defined in Rule 144 under the
Securities Act or any similar or analogous rule promulgated under the Securities
Act, at all times after the effective date of the first registration filed by
the Company for an offering of its securities to the general public;
(b) File with the Commission, in a timely manner, all reports and
other documents required of the Company under the Exchange Act after it has
become subject to such reporting obligations; and
(c) So long as a Holder owns any Registrable Securities, furnish
to such Holder forthwith upon written request: a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
under the Securities Act, and of the Exchange Act (at any time after it has
become subject to such reporting requirements); a copy of the most recent annual
or quarterly report of the Company; and such other reports and documents as a
Holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing it to sell any such securities without registration.
2.10 Market-Standoff Agreement.
(a) Market-Standoff Period; Agreement. In connection with the
Initial Public Offering and upon request of the Company or the underwriters
managing such offering of the Company's securities, each Holder hereby agrees
not to sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any securities of the Company (other than any disposed
of in the registration and those acquired by the Holder in the registration or
thereafter in open market transactions) without the prior written consent of the
Company or such underwriters, as the case may be, for such period of time (not
to exceed one hundred eighty (180) days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of such public offering
(b) Limitations. The restrictions set forth in Section 2.10(a)
shall only be binding on and enforceable against the Holders in the event all
officers, directors and holders of at least one percent (1%) of the outstanding
equity of the Company (on a fully-diluted basis) are bound by similar
restrictions. If the Company or the underwriter of any public offering of the
Company's securities waive or terminate any standoff or lockup restrictions
imposed on any holder of securities of the Company, then such waiver or
termination shall be granted to all Holders subject to standoff or lockup
restrictions pro rata based on the number of shares of Common Stock beneficially
held by such holder and the Holders. From and after the date of this
-15-
Agreement, the Company shall use commercially reasonable efforts to ensure that
all holders of capital stock of the Company agree to be bound by terms
substantially similar to those set forth in this Section 2.10.
(c) Stop-Transfer Instructions. In order to enforce the foregoing
covenants, the Company may impose stop-transfer instructions and may stamp each
such certificate with the second legend set forth in Section 4.1 hereof with
respect to the securities of each Holder (and the securities of every other
person subject to the restrictions in Section 2.10(a) hereof).
(d) Transferees Bound. If and whenever Registrable Securities are
sold by any Holder, the selling Holder shall do all things and execute and
deliver all documents, and cause any transferee of the Registrable Securities to
do all things and execute and deliver all documents, as may be necessary to
cause the transferee to be bound by the terms and conditions of this Section
2.10; provided that this Section 2.10(d) shall not apply to transfers pursuant
to a registration statement.
2.11 Registrable Securities Eligible for Sale under Rule 144. No
Holder shall be entitled to exercise any registration right provided for in this
Article 2 with respect to any number of shares of Registrable Securities
constituting less than one percent (1%) of outstanding shares of Common Stock in
the event that at such time such Registrable Securities are eligible for sale
during a three-month period without registration pursuant to Rule 144.
2.12 Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Article 2 may be
assigned by a Holder to a transferee or assignee of Registrable Securities that
(a) is an Affiliate of such Holder or (b) acquires not less than One Million
(1,000,000) shares of Registrable Securities from such Holder in accordance with
the procedures prescribed in the Right of First Refusal Agreement; provided that
in either case, prior to the transfer, (i) the transferor shall furnish to the
Company written notice of the name and address of such transferee or assignee
and the securities with respect to which such registration rights are being
assigned and (ii) such transferee shall agree in writing to be subject to all
restrictions applicable to and obligations of the transferring Holder set forth
in this Agreement, including, without limitation, those set forth in Section
2.10 hereof.
ARTICLE 3
PREEMPTIVE RIGHTS
3.1 Rights to Purchase New Securities. From and after the date of this
Agreement until immediately prior to a Qualified Public Offering, each Series D
Investor shall have the preemptive right to purchase its Pro Rata Share of any
additional issues of capital stock of the Company of any or all classes or
series thereof, whether or not now authorized, and any securities of the Company
of any type, including convertible indebtedness, that are or may become
convertible into such capital stock, including, without limitation, any rights,
options or warrants to purchase capital stock, other than (i) shares of Series D
Preferred Stock issued pursuant to the Series D Stock Purchase Agreement
(whether issued at the Closing or in any Subsequent Closing, as such terms are
defined therein), (ii) shares issued in a Qualified Public Offering, and (iii)
securities that are excluded from the definition of Additional Shares in
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Section 5(e)(v) of the Restated Certificate's Certificate of Designation of
Series D Preferred Stock (collectively, "New Securities") which the Company may
propose to offer, sell or issue from and after the date hereof, subject to the
terms and conditions of this Article 3. Each participating Series D Investor
must purchase New Securities on the same terms and at the same price at which
the Company proposes to sell New Securities. A Series D Investor that notifies
the Company of its intention to exercise its preemptive right under this Article
3 may assign all or a portion of such right to one or more Affiliates in such
proportions as it deems appropriate. The "Pro Rata Share" of each Series D
Investor shall be equal to the quotient obtained by dividing (i) the total
number of shares of Common Stock (on an as-converted basis, including shares
issuable upon conversion of Series D stock held by such Series D Investor) held
by such Series D Investor immediately prior to the issuance of New Securities
plus by (ii) the sum of (X) the total number of shares of Common Stock of the
Company then outstanding plus (Y) the total number of shares of Common Stock of
the Company into which all then outstanding shares of Preferred Stock of the
Company are then convertible.
3.2 Notice of Proposed Sale of New Securities. In the event the
Company proposes to undertake an offering, sale or issuance of New Securities,
it shall give to each Series D Investor written notice of its intention (the
"Participation Right Notice"), which notice shall describe the type of New
Securities, number of shares, the price, the terms upon which the Company
proposes to issue New Securities, and shall include a statement as to the number
of days (which shall be at least fifteen (15) days) following the date of the
Participation Right Notice within which such Preferred Stockholder must respond
to the Participation Right Notice. Each Series D Investor shall have fifteen
(15) days from the date the Participation Right Notice is received to purchase
any or all of its Pro Rata Share of the New Securities for the price and upon
the terms specified in the Participation Right Notice by giving written notice
to the Company and stating therein the quantity of New Securities to be
purchased. Each Series D Investor that elects to participate shall be required
to become a party to the agreement(s) executed and delivered in connection with
the issuance and sale of the New Securities and to make payment for such New
Securities on the terms and at the time contemplated by such agreements. The
Company shall promptly, in writing, inform each Series D Investor that elects to
purchase all of its Pro Rata Share of the New Securities (each a
"Fully-Exercising Series D Investor") of any other Series D Investor's failure
to do likewise. During the ten (10) day period commencing after receipt of such
information, each Fully-Exercising Series D Investor shall be entitled to
purchase on the terms specified above that portion of the New Securities for
which Series D Investors were entitled to subscribe but which were not
subscribed for that is equal to the quotient obtained by dividing (i) the total
number of shares of Common Stock issuable to such Fully-Exercising Series D
Investor upon the conversion of all of the shares of Series D Preferred Stock
held by such Fully-Exercising Series D Investor immediately prior to the
issuance of New Securities by (ii) the total number of shares of Common Stock
issuable to all Fully-Exercising Series D Investors upon the conversion of all
of the shares of Series D Preferred Stock held by all such Fully-Exercising
Series D Investors immediately prior to the issuance of New Securities.
3.3 Sale After Notice. The Company may, during the period of
forty-five (45) days following the expiration of the periods provided in Section
hereof, offer, sell and issue the remaining unsubscribed portion of the New
Securities covered by the Participation Right Notice to any persons or entities,
at a price and upon general terms no more favorable than those
-17-
specified in the Participation Right Notice. In the event the Company has not
sold the New Securities within said forty-five (45) day period, the Company
shall not thereafter issue or sell any New Securities without first offering
such securities to the Series D Investors in the manner provided in this Article
3.
3.4 Assignment of Preemptive Rights. The preemptive rights set forth
in this Article 3 may be assigned by an Series D Investor to a transferee or
assignee of Securities that (a) is an accredited investor as defined in
Regulation D under the Securities Act and (b) acquires at least 1,000,000 shares
of Series D Preferred Stock or Common Stock issued upon conversion of Series D
Preferred and either (x) is an Affiliate of such Series D Investor or (y)
acquires Securities from such Series D Investor in accordance with the
procedures prescribed in the Right of First Refusal Agreement; provided that in
either case, prior to such transfer, (i) the transferor shall furnish to the
Company written notice of the name and address of such transferee or assignee
and the securities with respect to which such registration rights are being
assigned and (ii) such transferee shall agree in writing to be subject to all
restrictions applicable to and obligations of the transferring Series D Investor
set forth in this Agreement.
ARTICLE 4
MISCELLANEOUS
4.1 Legends on Share Certificates. The following legend shall be
imprinted conspicuously on the face of each certificate representing Registrable
Securities:
NOTICE IS HEREBY GIVEN THAT THE SALE, ASSIGNMENT, TRANSFER, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO AND RESTRICTED BY THE PROVISIONS OF A
CERTAIN INVESTORS RIGHTS AGREEMENT AMONG JABBER, INC. AND CERTAIN OF
THE COMPANY'S STOCKHOLDERS, DATED AS OF MARCH 17, 2003, A COPY OF
WHICH AGREEMENT MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE
COMPANY, AND ALL OF THE PROVISIONS OF WHICH AGREEMENT ARE INCORPORATED
BY REFERENCE IN THIS CERTIFICATE.
THE RESTRICTIONS IMPOSED BY THE INVESTORS RIGHTS AGREEMENT INCLUDE,
AMONG OTHER THINGS, RESTRICTIONS ON TRANSFERABILITY AND RESALE,
INCLUDING A LOCK-UP PERIOD OF UP TO 180 DAYS IN THE EVENT OF AN
INITIAL PUBLIC OFFERING.
4.2 Termination of Agreement. This Agreement shall terminate upon the
earlier to occur of (i) seven (7) years after a Qualified Public Offering, or
(ii) such date, on or after the closing of the Company's first registered public
offering of Common Stock, on which all shares
-18-
of Registrable Securities may immediately be sold pursuant to Rule 144 during
any ninety (90)-day period.
4.3 Entire Agreement. This Agreement contains the entire agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements among any of them with respect thereto,
including, without limitation, the Prior Rights Agreement, which is hereby
terminated in its entirety and which shall henceforth be of no force and effect.
4.4 Amendment; Waiver. Neither this Agreement nor any term hereof may
be amended, waived or discharged other than by written instrument signed by the
Company and Holders of a majority of Series D Registrable Securities. Each
Investor acknowledges that by the operation of this Section 4.4 third parties
have the right and power to diminish or eliminate all rights of such Investor
under this Agreement. Each Investor also acknowledges that purchasers of shares
of Series D Preferred Stock issued pursuant to the Series D Stock Purchase
Agreement in any Subsequent Closing (as such term is defined in the Series D
Stock Purchase Agreement) after the date of this Agreement shall be entitled to
become parties to this Agreement by executing and delivering a counterpart
signature page hereto and, upon the Company adding the name of any such party to
Exhibit A, any such party shall be a Series D Investor for all purposes
hereunder without any further amendment to this Agreement or any further action
on the part of the Investors. Notwithstanding anything to the contrary contained
herein, no modification, amendment or waiver that would treat any Investor in a
non-ratable, discriminatory manner in comparison to other similarly situated
Investors shall be effective against such Investor without the written consent
of such Investor.
4.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic substantive laws of the State of Delaware,
without giving effect to any choice or conflict of law provision or rule that
would cause the application of the laws of any other jurisdiction.
4.6 Notices. All notices and other communications given to any party
hereto pursuant to this Agreement shall be in writing and shall be hand
delivered, or sent either by (a) certified mail, postage prepaid, return receipt
requested; (b) electronic mail, (c) an overnight express courier service that
provides written confirmation of delivery; or (d) facsimile transmission with
written confirmation by the sending machine or with telephone confirmation of
receipt (provided that a confirming copy is sent by overnight express courier
service that provides written confirmation of delivery), addressed as follows:
(a) If to the Company:
Jabber, Inc.
1899 Wynkoop Street
Denver, CO 80202
Tel: 303-308-3255
Fax: 303-308-3215
E-mail: ghagan@jabber.com
Attention: COO/CFO
-19-
with a copy to:
Jabber, Inc.
1899 Wynkoop Street
Denver, CO 80202
Tel: 303-308-3255
Fax: 303-308-3215
E-mail: lbranson@webb.net
Attention: Secretary/General Counsel
(b) To the Investors:
To the address of each Investor set forth
on Exhibit A hereto
with a copy to:
Gibson Dunn & Crutcher LLP
1530 Page Mill Road
Palo Alto, CA 94304
Tel: (650) 849-5311
Fax: (650) 849-5333
Attention: Greg Davidson, Esq.
and
Davis Graham & Stubbs LLP
1550 Seventeenth Street
Suite 500
Denver, CO 80202
Tel: (303) 892-9400
Fax: (303) 893-1379
Attention: Chris Richardson, Esq.
Any communication given in conformity with this Section 4.6, shall be effective
upon the earlier of actual receipt or deemed delivery. Delivery shall be deemed
to have occurred as follows: if hand delivered on the day so delivered; if
mailed, three business days after the same is deposited in the United States
Mail; if telecopied or sent by electronic mail, upon written confirmation by the
sending machine of effective transmission or upon telephone confirmation of
receipt; and if sent by overnight express courier service, the next business
day. Any party may at any time change its address for receiving communications
pursuant to this Section 4.6 by giving notice of a new address in the manner
provided herein.
4.7 Assignment. Except as expressly provided in Sections 2.12, 3.1 or
3.4 hereof, as the case may be, none of the rights and obligations of any
Investor set forth in this Agreement may be transferred or assigned without the
prior written consent of the Company (which consent shall not be unreasonably
withheld), and any purported assignment made without such consent
-20-
shall be void. None of the rights and obligations of the Company
set forth in this Agreement may be transferred or assigned without the prior
written consent of the Investors holding a majority of the Series D Registrable
Securities then outstanding, and any purported assignment made without such
consent shall be void. This Agreement shall be binding upon, and inure to the
benefit of, the parties hereto, all permitted transferees and assignees of any
Investor, and all of the respective heirs, legatees, personal representatives,
successors and assigns of any Investor, to the extent permitted by this
Agreement.
4.8 Invalid Provision. If any term or provision of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable
in any respect, the remainder of the terms and provisions shall be unaffected
and shall remain in full force and effect, and any such invalid, void or
unenforceable term or provision shall be construed by limiting it so as to be
valid and enforceable to the maximum extent compatible with, and possible under,
applicable law.
4.9 Time Periods. In computing the number of days for any purpose of
this Agreement, all days shall be counted including Saturdays, Sundays and
holidays, except that if the last day of any period occurs on a Saturday, Sunday
or holiday, the period will be deemed extended to the end of the next succeeding
day which is not a Saturday, Sunday or holiday. A holiday for purposes of this
Agreement shall mean those days on which banks in the State of Delaware may, or
are obligated to, remain closed.
4.10 Headings. The Table of Contents and the Article, Section and
subsection headings are included solely for convenient reference and shall not
be deemed to provide an accurate description of the content of any Article,
Section or subsection hereof or otherwise affect the meaning or interpretation
of any of the provisions hereof.
4.11 Gender. All pronouns used herein shall include all genders and
the singular and plural as the context requires.
4.12 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 but one and the same instrument.
4.13 Delivery by Facsimile. This Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall re-execute original forms thereof and deliver them to
all other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.
-21-
4.14 Interpretation of Agreement. The parties hereto acknowledge and
agree that this Agreement has been negotiated at arm's-length and among parties
equally sophisticated and knowledgeable in the matters dealt with in this
Agreement. Accordingly, any rule of law or legal decision that would require
interpretation of any ambiguities in this Agreement against the party that has
drafted it is not applicable and is waived. The provisions of this Agreement
shall be interpreted in a reasonable manner to effect the intent of the parties
as set forth in this Agreement.
[signature pages follow]
-22-
IN WITNESS WHEREOF, the parties hereto have executed this Investors
Rights Agreement as of the day and year first above written.
JABBER, INC.
By: /s/Gwenael Hagan
---------------------------------------
Name: Gwenael Hagan
Title: COO/CFO
SERIES D INVESTORS:
FRANCE TELECOM TECHNOLOGIES
INVESTISSEMENTS
By: /s/ Stephane Couvreur
---------------------------------------
Name: Stephane Couvreur
Title: General Manager
INTEL CAPITAL CORPORATION
By: /s/ Ravi Jacob
---------------------------------------
Name: Ravi Jacob
Title: Vice President, Finance &
Enterprise Services Group;
Asst. Treasurer, Strategic Investments &
Acquisitions
WEBB INTERACTIVE SERVICES, INC.
By: /s/ W. R. Cullen
---------------------------------------
Name: W. R. Cullen
Title: President & CEO
SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT AMONG JABBER, INC. AND THE
INVESTORS NAMED HEREIN
PRIOR INVESTORS:
FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS
By: /s/ Stephane Couvreur
---------------------------------------
Name: Stephane Couvreur
Title: General Manager
WEBB INTERACTIVE SERVICES, INC.
By: /s/ W. R. Cullen
---------------------------------------
Name: W. R. Cullen
Title: President & CEO
SIGNATURE PAGE TO THE INVESTOR RIGHTS AGREEMENT AMONG JABBER, INC. AND THE
INVESTORS NAMED HEREIN
EXHIBIT A
SCHEDULE OF INVESTORS
SERIES D INVESTORS
FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS
38-40 rue du Gal Leclerc
92794 Issy les Moulineaux Cedex 9
Paris, France
Fax: 011 33 145 296 560
INTEL CAPITAL CORPORATION
2200 Mission College Blvd.
M/S RN6-46
Santa Clara, CA 95052
Attention: Portfolio Manager
Fax Number: (408) 765-6038
E-mail: portfolio.manager@intel.com
WEBB INTERACTIVE SERVICES, INC.
1899 Wynkoop Street
Suite 600
Denver, CO 80202
Attention: Secretary/General Counsel
Fax: (303) 308-3219
E-Mail: lbranson@webb.net
- -------------------------------------
- -------------------------------------
PRIOR INVESTORS
FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS
WEBB INTERACTIVE SERVICES, INC.
EXHIBIT C
RIGHT OF FIRST REFUSAL AGREEMENT
================================================================================
JABBER, INC.
RIGHT OF FIRST REFUSAL
AND CO-SALE AGREEMENT
DATED MARCH 17, 2003
================================================================================
JABBER, INC.
RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
THIS RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT (the "Agreement") is
made effective as of March 17, 2003, by and among Jabber, Inc., a Delaware
corporation ("the Company"), those parties listed as Series D Investors on
Exhibit A attached hereto (hereinafter sometimes referred to individually as a
"Series D Investor" and collectively, as the "Series D Investors"), and those
parties listed as Prior Investors on Exhibit A attached hereto (hereinafter
sometimes referred to individually as a "Prior Investor" and collectively, as
the "Prior Investors").
BACKGROUND
The Company and the Series D Investors have entered into that certain
Series D Preferred Stock Purchase Agreement dated as of the date hereof (the
"Series D Purchase Agreement").
The Company and the Prior Investors are parties to that certain
Stockholders Agreement entered into as of July 6, 2001 and that certain Investor
Rights Agreement dated July 6, 2001 (collectively, the "Prior Agreements").
As a condition and a material inducement to the Series D Investors'
obligations to consummate the transactions contemplated by the Series D Purchase
Agreement, the Company and the Prior Investors have agreed to enter into this
Agreement with the Series D Investors and to terminate the Prior Agreements in
their entirety as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound hereby, the
Investors and the Company hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Unless the contract otherwise requires, the following
terms shall have the following meanings for purposes of this Agreement:
(a) "Affiliate" shall mean, with respect to any Person, (i) a
director, officer, general or limited partner, manager, member or stockholder of
such Person, (ii) a spouse, parent, sibling or descendant of such Person (or a
trust for the benefit of any one of more of the foregoing), and (iii) any other
Person that, directly or indirectly through one or more intermediaries,
Controls, or is Controlled by, or is under common Control with, such Person.
(b) "Agreement" shall mean this Right of First Refusal and
Co-Sale Agreement.
(c) "Available Securities" shall have the meaning set forth in
Section 2.4 hereof.
(d) "Co-Sale Notice" shall have the meaning set forth in Section
3.1 hereof.
(e) "Co-Sale Right" shall have the meaning set forth in Section
3.2 hereof.
(f) "Co-Sale Securities" shall have the meaning set forth in
Section 3.1 hereof.
(g) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(h) "Common Stock" shall mean the Common Stock, par value $0.01
per share, of the Company.
(i) "Company" shall mean Jabber Inc., a Delaware corporation.
(j) "Company Exercise Notice" shall have the meaning set forth in
Section 2.2 hereof.
(k) "Control" shall mean, with respect to any Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
(l) "Exercise Deadline" shall have the meaning set forth in
Section 2.4 hereof.
(m) "Fully-Exercising Series D Investor" shall have the meaning
set forth in Section 2.3 hereof.
(n) "Investor" or "Investors" shall mean, individually or
collectively, the Series D Investors and the Prior Investors.
(o) "Investor Exercise Notice" shall have the meaning set forth
in Section 2.3 hereof.
(p) "Non-Exercising Series D Investor" shall have the meaning set
forth in Section 3.2 hereof.
(q) "Offer" shall have the meaning set forth in Section 2.1
hereof.
(r) "Offered Securities" shall have the meaning set forth in
Section 2.1 hereof.
(s) "Offering Investor" shall have the meaning set forth in
Section 2.1 hereof.
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(t) "Person" shall mean any individual, partnership, limited
partnership, limited liability partnership, corporation, limited liability
company, association, trust, joint venture, unincorporated organization, and any
governmental authority or other legal or business entity of any kind.
(u) "Preferred Stock" shall mean the Series D Preferred Stock.
(v) "Prior Investor" shall have the meaning set forth in the
first paragraph of this Agreement.
(w) "Prior Agreement" shall have the meaning set forth in the
Background section of this Agreement.
(x) "Pro Rata Share" shall mean from time to time an amount equal
to the quotient obtained by dividing (i) the total number of shares of Common
Stock issued or issuable to a Series D Investor upon the conversion of the
shares of Series D Preferred Stock issued to such Series D Investor pursuant to
the Series D Purchase Agreement by (ii) the total number of shares of Common
Stock issued or issuable to all Series D Investors upon the conversion of the
shares Series D Preferred Stock issued to all such Series D Investors pursuant
to the Series D Purchase Agreement.
(y) "Qualified Public Offering" shall mean a firm commitment
underwritten public offering pursuant to a registration statement under the
Securities Act, covering the offer and sale by the Company of Common Stock at a
public offering price per share that is not less than $1.40 per share (as
appropriately adjusted for any stock dividends, splits, combinations, divisions,
recapitalizations or similar transactions affecting the Series D Preferred Stock
after the date of this Agreement) and with a total in gross offering proceeds of
not less than $20,000,000 (prior to deducting underwriter discounts and
commissions and expenses of the offering).
(z) "Remaining Securities" shall have the meaning set forth in
Section 2.3 hereof.
(aa) "Sales Period" shall have the meaning set forth in Section
2.4 hereof.
(bb) "Series D Investor" shall have the meaning set forth in the
first paragraph of this Agreement.
(cc) "Series D Preferred Stock" shall mean the Series D
Convertible Preferred Stock, par value $0.01 per share, of the Company.
(dd) "Series D Purchase Agreement" shall have the meaning set
forth in the Background section of this Agreement.
(ee) "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
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(ff) "Securities" shall mean any Common Stock, Preferred Stock or
other securities or equity-linked securities, directly or indirectly,
convertible into or exchangeable or exercisable for Common Stock owned by any
Investor.
(gg) "Subsequent Exercise Notice" shall have the meaning set
forth in Section 2.3 hereof.
(hh) "Third Party Purchaser" shall have the meaning set forth in
Section 2.4 hereof.
(ii) "Transfer" as to any securities issued by the Company, shall
mean to sell, or in any other way directly or indirectly, to transfer, assign,
distribute, give, bequeath, devise, encumber, pledge, hypothecate or otherwise
dispose of, either voluntarily or involuntarily, or a sale, or any other direct
or indirect, transfer, assignment, distribution, gift, bequest, devise,
encumbrance or other voluntary or involuntary disposition, as the case may be.
ARTICLE 2
TRANSFER RESTRICTIONS
2.1 Offer to Sell Securities. Except as otherwise provided in this
Agreement, if at any time prior to the completion of a Qualified Public
Offering, any Investor shall at any time desire to Transfer any or all of such
Investor's Securities, such Investor (the "Offering Investor") shall first
prepare a written offer (the "Offer") to sell such Securities (the "Offered
Securities") setting forth the proposed date of the sale, the proposed purchase
price of the Securities, the proposed Third Party Purchaser who has made an
offer to acquire such Securities, and the other terms and conditions upon which
the sale is proposed to be made. If the offered purchase price includes
consideration other than cash, the value of the cash equivalent will be
determined by the Company's Board of Directors in good faith, which
determination will be binding upon the Company and each Investor, absent fraud
or manifest error. The Offering Investor shall then transmit a copy of the Offer
to the Company and to all Series D Investors.
2.2 Right of First Refusal of the Company. Transmittal of the Offer to
the Company by the Offering Investor shall constitute an offer by the Offering
Investor to sell any or all of the Offered Securities to the Company at the
price and upon the terms and conditions set forth in the Offer. For a period of
fifteen (15) days after the submission of the Offer to the Company, the Company
shall have the right of first refusal, exercisable by written notice to the
Offering Investor (the "Company Exercise Notice") with a copy to each of the
Series D Investors, to accept the Offer as to any or all of the Offered
Securities.
2.3 Right of First Refusal of Series D Investors. In the event that
the Company does not exercise its right of first refusal with respect to all of
the Offered Securities in accordance with Section 2.2 hereof, the Offering
Investor, upon notice from the Company of the Company's decision (or thirty (30)
days after the delivery of a copy of the Offer to the Series D Investors
pursuant to Section 2.1 hereof, if the Company has failed to deliver a Company
Exercise Notice within the fifteen (15) day period), shall be deemed to have
offered in writing to sell any or all of the Offered Securities not purchased by
the Company (the "Remaining Securities") to the Series D Investors as a group at
the price and upon the terms and conditions
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set forth in the Offer. For a period of fifteen (15) days after such Offer is
deemed made to the Series D Investors, each of the Series D Investors shall have
the option, subject to the provisions of Section 5.3(a) of the Series D Purchase
Agreement, exercisable by written notice to the Offering Investor (the "Investor
Exercise Notice"), to purchase, on the terms and conditions specified in the
Offer, a portion of the Remaining Securities that is less than or equal to such
Series D Investor's Pro Rata Share. The Offering Investor shall promptly, in
writing, inform each Series D Investor that elects to purchase all of its Pro
Rata Share of the Remaining Securities (each a "Fully-Exercising Series D
Investor") of any other Series D Investor's failure to do likewise. During the
five (5) day period commencing after receipt of such information, each of the
Fully-Exercising Series D Investors shall have the option, exercisable by
written notice to the Offering Investor (the "Subsequent Exercise Notice"), to
purchase, on the terms and conditions specified in the Offer, a portion of any
Remaining Securities which Series D Investors were entitled to purchase but
which were not covered by any Investor Exercise Notice that is equal to the
quotient obtained by dividing (a) the total number of shares of Common Stock
issued or issuable to such Fully-Exercising Series D Investor upon the
conversion of the shares of Series D Preferred Stock issued to such
Fully-Exercising Series D Investor pursuant to the Series D Purchase Agreement
by (b) the total number of shares of Common Stock issued or issuable to all
Fully-Exercising Series D Investors upon the conversion of the shares Series D
Preferred Stock issued to all such Fully-Exercising Series D Investors pursuant
to the Series D Purchase Agreement.
2.4 Sale to Third Party Purchaser. Following the last date by which
the Series D Investors may exercise their rights of first refusal under Section
2.3 (the "Exercise Deadline"), the Series D Investors shall be deemed to have
declined to purchase any of the Remaining Securities that are not subject to an
Investor Exercise Notice or a Subsequent Exercise Notice (the "Available
Securities"), and the Offering Investor shall be permitted, subject to the
requirements of Section 5.4 of the Series D Purchase Agreement, during the
period of sixty (60) days thereafter (the "Sales Period") and subject to the
co-sale provisions of Article 3 hereof, to sell any or all of the Available
Securities to any Person or Persons (each a "Third Party Purchaser"), including
without limitation, any Investor (subject to the provisions of Section 5.3(a) of
the Series D Purchase Agreement), at a price and upon terms and conditions no
more favorable to the Third Party Purchaser than those specified in the Offer.
If the Offered Securities to be sold in accordance with this Article 2 are sold
to any Third Party Purchaser who is not a party to this Agreement, such Third
Party Purchaser must agree in writing to be bound by the terms and conditions
hereof applicable to the Investors and the Offered Securities so sold shall
continue to be subject to the restrictions imposed by this Agreement. In the
event the Offering Investor has not sold all of the Available Securities within
said sixty (60) day period, the Offering Investor shall not thereafter sell such
Available Securities without first offering such securities to the Company and
the Series D Investors in the manner provided in this Article 2.
2.5 Closing. The Company and each Series D Investor that elects to
purchase any or all of the Offered Securities shall be required to become a
party to any agreement(s) contemplated by and expressly identified in the Offer
to be executed and delivered by the purchaser in connection with the sale of
Offered Securities and to make payment for such Offered Securities on the terms
and at the time contemplated by the Offer. The closing of the purchase of
Offered Securities by the Company or by any Series D Investor pursuant to the
provisions of this Article 2 shall be made in accordance with the terms and
conditions set forth in
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the Offer. At the closing, the stock certificate or certificates or other
instruments representing the Offered Securities being sold shall be delivered by
the Offering Investor to the purchaser or purchasers, duly endorsed for transfer
or with executed stock powers attached, with any necessary documentary and
transfer tax stamps affixed by the seller, free and clear of all liens, claims
and encumbrances except as expressly provided in the Offer, against payment of
the purchase price for such Offered Securities (in the amount stated in the
Offer) by delivery of a certified check payable to the Offering Investor or a
wire transfer to an account specified by the Offering Investor.
2.6 Certain Excluded Transfers. Provided that the transferee agrees in
writing to be bound by the terms and conditions of this Agreement applicable to
the Investors and that the Securities so sold continue to be subject to the
restrictions imposed by this Agreement, the provisions of this Article 2 and
Article 3 shall not apply to the following Transfers:
(a) Transfers of Securities from an Investor to an Affiliate of
the Investor.
(b) Transfers following the completion of a Qualified Public
Offering.
(c) Transfers of Securities from an Investor provided such
Transfers, individually or in the aggregate, do not exceed ten percent (10%) of
the total share capital held, directly or indirectly, by such Investor, on a
fully-diluted, as converted basis, as of the date of the Closing or Subsequent
Closing, if any (as such terms are defined under the Series D Purchase
Agreement); provided, however, that any Transfers pursuant to Section 2.6(d) are
not made to any Person who is a Competitor of any Series D Investor. For
purposes of this Section 2.6, a "Competitor" shall be defined as any Person
whose products and/or services compete with the products and/or services of any
Series D Investor in any market segment and such Person's sales, revenues or
profits attributable to such market segment equal or exceed one percent (1%) of
the relevant Series D Investor's sales, revenues or profits in the same market
segment.
(d) Transfers of Securities made pursuant to Article V hereto.
ARTICLE 3
CO-SALE PROVISIONS
3.1 Notice of Proposed Sale. In the event there are any Available
Securities following the Exercise Deadline and the Offering Investor proposes to
Transfer to a Third Party Purchaser any or all of such Available Securities
during the Sales Period, as soon as practical, but in no event less than fifteen
(15) days prior to the date of such Transfer, the Offering Investor shall submit
a written notice (the "Co-Sale Notice") to the Series D Investors disclosing the
amount of Available Securities proposed to be Transferred (the "Co-Sale
Securities").
3.2 Right of Participation in Sales. Subject to Section 2.6 hereof,
each Series D Investor that has elected not to exercise its right of first
refusal pursuant to Section 2.3 hereof with respect to such Offered Securities
(each a "Non-Exercising Series D Investor"), shall have the right (the "Co-Sale
Right") to sell to the Third Party Purchaser, at the same price per share and on
the same terms and conditions set forth in the Offer, a portion of the
Securities to be sold to the Third Party Purchaser that is less than or equal to
the quotient obtained by dividing (a) the total number of shares of Common Stock
issued or issuable to such Non-Exercising Series D
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Investor upon the conversion of the shares of Series D Preferred Stock issued to
such Non-Exercising Series D Investor pursuant to the Series D Purchase
Agreement by (b) the sum of (i) the total number of shares of Common Stock
issued or issuable to all Non-Exercising Series D Investors upon the conversion
of the shares Series D Preferred Stock issued to all such Non-Exercising Series
D Investors pursuant to the Series D Purchase Agreement plus (ii) the total
number of shares of Common Stock included in the Co-Sale Securities or which may
be obtained upon conversion, exchange or exercise of the Co-Sale Securities. To
the extent a Non-Exercising Series D Investor exercises its Co-Sale Right in
accordance with this Article 3, the amount of Co-Sale Securities which the
Offering Investor may sell to such Third Party Purchaser shall be
correspondingly reduced.
3.3 Notice of Intent to Participate. If a Non-Exercising Series D
Investor wishes to participate in any sale pursuant to Section 3.2 hereof, then
such Non-Exercising Series D Investor shall notify the Offering Investor in
writing of such intention as soon as practicable after such Non-Exercising
Series D Investor's receipt of the Co-Sale Notice made pursuant to Section 3.1
hereof, and in any event within ten (10) days after the date of such Co-Sale
Notice has been delivered.
3.4 Sale of Co-Sale Securities. The Offering Investor and each
participating Non-Exercising Series D Investor shall sell to the Third Party
Purchaser all, or, at the option of the Third Party Purchaser, any part, of the
Securities proposed to be sold by them at not less than the price and upon other
terms and conditions, if any, not more favorable to the Third Party Purchaser
than those set forth in the Offer; provided that if the Third Party Purchaser
elects to purchase less than all of such Securities, the total amount of
Securities proposed to be sold by the Offering Investor and each participating
Non-Exercising Series D Investor shall be reduced pro rata based upon the
relative amount of the Securities that the Offering Investor and each such
participating Non-Exercising Series D Investor is otherwise entitled to sell to
the Third Party Purchaser pursuant to Section 3.2 hereof. If the Securities to
be sold in accordance with this Article 3 are sold to any Third Party Purchaser
who is not a party to this Agreement, such Third Party Purchaser must agree in
writing to be bound by the terms and conditions hereof applicable to the
Investors and the Securities so sold shall continue to be subject to the
restrictions imposed by this Agreement.
3.5 Closing. Each Non-Exercising Series D Investor that elects to sell
any Securities pursuant to its Co-Sale Right shall be required to become a party
to any agreement(s) contemplated by and expressly identified in the Offer to be
executed and delivered by the Offering Investor in connection with the sale of
Offered Securities and shall be entitled to receive payment for such Offered
Securities on the terms and at the time contemplated by the Offer. The closing
of the sale of Securities by any Non-Exercising Series D Investor pursuant to
the provisions of this Article 3 shall be made in accordance with the terms and
conditions set forth in the Offer. At the closing, the stock certificate or
certificates or other instruments representing the Securities being sold by any
Non-Exercising Series D Investor shall be delivered to the Third Party
Purchaser, duly endorsed for transfer or with executed stock powers attached,
with any necessary documentary and transfer tax stamps affixed by the seller,
free and clear of all liens, claims and encumbrances except as expressly
provided in the Offer against payment of the purchase price for such Securities
(in the amount stated in the Offer) by delivery
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of a certified check payable to such Non-Exercising Series D Investor or a wire
transfer to an account specified by such Non-Exercising Series D Investor.
ARTICLE 4
DRAG-ALONG
4.1 Post-Closing. Each of the Investors acknowledges and agrees that,
after the Closing but prior to a Subsequent Closing (as such term is defined
under the Series D Purchase Agreement), if any two (2) out of the three (3)
original Series D Investors approve (the "Approving Series D Investors") (i) an
acquisition of the Company by means of any transaction or series of related
transactions (including, without limitation, any share exchange, consolidation,
merger, amalgamation, or similar form of corporate reorganization) in which the
outstanding shares of the Company are exchanged for securities or other
consideration issued, or caused to be issued, by the acquiring entity, its
subsidiary or other entity and pursuant to which the holders of the outstanding
voting securities of the Company immediately prior to such share exchange,
consolidation, merger, amalgamation, or other transaction fail to hold, directly
or indirectly, equity securities representing a majority of the voting power of
the Company or surviving entity or its parent immediately following such
transaction in substantially the same proportions as their ownership of the
voting power of the share capital of the Company immediately prior to such
transaction; or (ii) the sale, lease, exchange, conveyance or other disposition
(including by way of exclusive, perpetual license) of all or substantially all
of the assets of the Company (any such event described in (i) or (ii) above
being referred to herein as a "Sale of the Company"), then each Investor hereby
agrees with respect to all Securities of the Company which it owns or otherwise
exercises voting or dispositive authority over:
(a) in the event that such transaction is to be brought to a vote
at a shareholder meeting, after receiving proper notice of any meeting of
shareholders of the Company, to vote all such Investor's Securities on the
approval of such Sale of the Company:
(i) to be present, in person or by proxy, as a holder of
shares of voting Securities of the Company, at all such meetings and be counted
for the purposes of determining the presence of quorum at such meetings;
(ii) to vote (in person at a regular or special meeting of
shareholders, by proxy or by action of written resolution, as applicable) all
Securities to which it has beneficial ownership in favor of such Sale of the
Company and in opposition to any and all other proposals that could be
reasonably expected to delay or impair the ability of the Company to consummate
such Sale of the Company; and
(iii) to refrain from exercising any dissenters' rights or
rights of appraisal under applicable law at any time with respect to such Sale
of the Company; and
(b) in the event that such Sale of the Company is to be
accomplished by the Transfer of Securities to any Person or group of related
persons:
(i) to sell all but not less than all of its Securities on
the terms agreed upon by the Approving Series D Investors for such Sale of the
Company; and
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(ii) in the case of an Investor holding options, warrants or
other securities convertible or exchangeable into Common Shares which, by their
terms, are convertible or otherwise exercisable prior to or otherwise in
connection with the Sale of the Company (the "Convertible Securities"),
notwithstanding the provision of the Convertible Securities and as requested by
the Company, to take such necessary action as to either (i) exercise such
Convertible Securities and sell the Common Shares in connection with the Sale of
the Company or (ii) sell such Convertible Securities in connection with the Sale
of the Company for a consideration equal to the consideration that would be
received by a holder of such number of Common Shares as is then issuable upon
the exercise of the Convertible Securities less the aggregate exercise price of
such Convertible Securities; provided that if the exercise price of the
Convertible Securities held by a Shareholder exceeds the consideration to paid
to a holder of such number of Common Shares as is then issuable upon the
exercise of such Convertible Securities, then the Shareholder agrees that such
Convertible Securities shall be cancelled and the Investor shall have no further
rights thereunder as of the closing contemplated by the Sale of the Company.
4.2 Post-Subsequent Closing. Each of the Investors acknowledges and
agrees that, after any Subsequent Closing, the term "Approving Series D
Investors" shall mean any three (3) out of four (4) Series D Investors who
approve a Sale of the Company, and each Investor further acknowledges and agrees
that the provisions of Section 4.1 shall apply, mutatis mutandis, to any such
Sale of the Company.
4.3 Drag-Along Requirements. Notwithstanding the provisions set forth
in Section 4.1 or 4.2, as the case may be, hereof, the obligation of any
Investor (i) to vote all Securities held by it in favor of such Sale of the
Company under the same terms and conditions as approved by the Approving Series
D Investors; (ii) to sell pursuant to such transaction all Company Securities
held by it subject to compliance by the Company with any applicable liquidation
preferences in the Company's then effective Certificate of Incorporation; and
(iii) to take any such other actions, including the timely delivery of documents
and instruments, as may be required to effect such Sale of the Company as
required by Section 4.1 or 4.2, as the case may be, shall be subject to the
satisfaction of each of the following conditions:
(a) The valuation of the Company in any Sale of the Company must
be at least two times the Purchase Price (as such term is defined under the
Series D Purchase Agreement);
(b) There shall be no joint and several liabilities from the
Series D Investors to any purchaser of the Company;
(c) Subject to Section 4.3(d) below, upon the consummation of a
Sale of the Company, all of the Investors will receive the same form and amount
of consideration per share of Preferred Stock or Common Stock, respectively,
taking into account any liquidation preference (including, but not limited to
the Series D Preferred Stock liquidation preference) to which any of the
Investors may be entitled, or if any holders of the Company's Preferred Stock or
Common Stock are given an option as to the form and amount of consideration to
be received, all Investors will be given the same option;
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(d) The form of consideration in a Sale of the Company shall not
be in a form other than cash or freely-tradable equity securities registered
under the Exchange Act and listed on the New York or American Stock Exchange or
the Nasdaq National Market ("Public Securities").
(e) No Investor shall be obligated to make any out of pocket
expenditure prior to the consummation of the Sale of the Company, (excluding
modest expenditures for postage, copies, etc.), and shall not be obligated to
pay any expenses incurred in connection with a consummated Sale of the Company,
except indirectly to the extent such costs are incurred for the benefit of all
of the Company's stockholders and are paid by the Company or the acquiring
party. Costs incurred by or on behalf of any Investor for its sole benefit will
not be considered costs of the transaction hereunder.
(f) The only representations, warranties or covenants that any
Investor shall be required to make in connection with a Sale of the Company are
representations and warranties with respect to its own ownership of the
Company's securities to be sold by it and its ability to convey title thereto
free and clear of liens, encumbrances or adverse claims and reasonable covenants
regarding confidentiality, publicity and similar matters; the liability of any
Investor with respect to any representation and warranty or covenant made by the
Company in connection with a Sale of the Company shall be several and not joint
with any other person; and such liability shall be limited to a pro rata share
of an escrow covering not to exceed 10% in the aggregate of the consideration
payable to all stockholders of the Company and which Escrow does not exceed a
period of one year (the "Escrow"), and providing further that any claims made by
any purchaser of the Company must exceed 15% of the amount in the Escrow before
any reimbursement may be made to such purchaser of the Company, other than with
respect to the representations, warranties and covenants made by such Investor
in connection with a Sale of the Company with respect to ownership and ability
to convey title.
(g) No Investor shall be required to amend, extend or terminate
any contractual or other relationship with the Company, the acquirer or their
respective affiliates.
(h) No Investor shall be required to agree to any covenant not to
compete or covenant not to solicit customers, employees or suppliers of any
party to the Sale of the Company.
ARTICLE 5
LIQUIDITY
5.1 General. Pursuant to the provisions of Section 5.4 of the Series D
Purchase Agreement, Webb Interactive Services, Inc. ("Webb") has covenanted and
agreed with the Company and each of the other Series D Investors that, from and
after the Closing Date (as such term is defined under the Series D Purchase
Agreement) and until the earlier to occur of (i) a Qualified Public Offering;
(ii) a sale of the entire capital stock of the Company for consideration that is
solely in the form of cash or freely tradable public securities; (iii) a sale of
all or substantially all of the Company's assets for consideration that is
solely in the form of cash or freely tradable public securities; or (iv) the
date on which Webb ceases to be a shareholder of the Company, Webb will not make
any distributions or other transfer of any of its shares in the
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Company to Webb's shareholders which distribution or transfer would have the
result of making the Company a reporting company under the Securities Exchange
Act of 1934, as amended, unless the distribution or transfer has been approved
by Investors holding 66-2/3% of the Shares.
5.2 Right to Purchase Common Shares. If none of the events described
in Section 5.1(i)-(iii) occurs and there has been no liquidation or bankruptcy
(whether voluntary or involuntary) of the Company (any such event, a "Liquidity
Event"), then commencing on January 1, 2005 (and on every annual anniversary
thereafter), Webb shall have the right to buy (the "Call Option") One Million
(1,000,000) shares of France Telecom Technologies Investissements' ("FTTI")
Common Stock in the Company, and FTTI shall have the obligation to sell to Webb
One Million (1,000,000) shares of its Common Stock in the Company, at a price
per share of (i) the Purchase Price plus (ii) fifteen percent (15%) per annum.
For each annual occasion that Webb desires to exercise its option, it shall
provide written notice to FTTI within five (5) business days after January 1st
and shall exercise the option no later than January 31st.
5.3 Limitation on Right. Notwithstanding any other provision to the
contrary, Webb shall not be entitled to exercise the Call Option if, as a result
of such purchase, Webb's ownership of the Company's authorized share capital
(calculated either by ownership percentage or voting power) would be greater
than forty-nine percent (49%)(the "Ownership Threshold"). If, as a result of
this Section 5.3, Webb is unable to exercise its Call Option, then such Call
Option shall be deemed to be temporarily suspended until such time that Webb can
exercise such Call Option either (i) without exceeding the Ownership Threshold
or (ii) immediately prior to the time of any Liquidity Event, at which time the
Ownership Threshold described in the prior sentence shall be deemed waived. For
the avoidance of doubt, all of Webb's ownership of the Company's share capital,
including any shares that may be, or have been, lawfully transferred by Webb to
any third party pursuant to this Agreement, shall be included in the calculation
of Webb's ownership of the Company's share capital. The Call Option may not be
assigned or transferred by Webb to any third party.
ARTICLE 6
MISCELLANEOUS
6.1 Legends on Share Certificates. The following legend shall be
imprinted conspicuously on the face of each certificate representing Securities:
NOTICE IS HEREBY GIVEN THAT THE SALE, ASSIGNMENT, TRANSFER, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO AND RESTRICTED BY THE PROVISIONS OF A
CERTAIN RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT AMONG JABBER,
INC. AND CERTAIN OF THE COMPANY'S STOCKHOLDERS, DATED AS OF MARCH 17,
2003, A COPY OF WHICH AGREEMENT MAY BE INSPECTED AT THE PRINCIPAL
OFFICE OF THE COMPANY, AND ALL OF THE PROVISIONS OF WHICH AGREEMENT
ARE INCORPORATED BY REFERENCE IN THIS CERTIFICATE.
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In order to ensure compliance with the restrictions referred to
herein, each Investor agrees that the Company may issue appropriate "stop
transfer" certificates or instructions and that, if the Company Transfers its
own securities, it may make appropriate notations to the same effect in its
records.
6.2 Termination of Agreement. This Agreement shall terminate upon the
earliest to occur of (i) a Qualified Public Offering or (ii) the dissolution of
the Company.
6.3 Entire Agreement. This Agreement contains the entire agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements among any of them with respect thereto,
including, without limitation, the Prior Agreements, each of which is hereby
terminated in its entirety and which shall henceforth be of no force and effect.
6.4 Amendment; Waiver. Neither this Agreement nor any term hereof may
be amended, waived or discharged other than by a written instrument signed by
the Company and Holders of a majority of the aggregate shares of Series D
Preferred Stock and Common Stock issued upon conversion of the Series D
Preferred Stock. Each Investor acknowledges that purchasers of shares of Series
D Preferred Stock issued pursuant to the Series D Stock Purchase Agreement in
any Subsequent Closing (as such term is defined in the Series D Stock Purchase
Agreement) after the date of this Agreement shall be required to become parties
to this Agreement by executing and delivering a counterpart signature page
hereto and, upon the Company adding the name of any such party to Exhibit A, any
such party shall be a Series D Investor for all purposes hereunder without any
further amendment to this Agreement or any further action on the part of the
Investors. Notwithstanding anything to the contrary contained herein, no
modification, amendment or waiver that would treat any Investor in a
non-ratable, discriminatory manner in comparison to other similarly situated
Investors shall be effective against such Investor without the written consent
of such Investor.
6.5 Nonrecognition of Certain Transfers. The Company will not, nor
will it be compelled to, recognize any Transfer made other than in accordance
with the terms of this Agreement, nor will it issue any warrant or certificate
representing any securities of the Company or pay any dividends to any Person
who has received such securities in a Transfer made other than in accordance
with the terms of this Agreement.
6.6 Specific Performance. Because of the unique character of the
Securities, the Investors and the Company will be irreparably damaged if this
Agreement is not specifically enforced. Should any dispute arise concerning the
sale or disposition of stock, an injunction may be issued restraining any sale
or disposition pending the determination of such controversy. In the event of
any controversy concerning the right or obligation to purchase or sell any such
stock, such right or obligation shall be enforceable in a court of equity by a
decree of specific performance. Such remedy shall, however, be cumulative and
not exclusive, and shall be in addition to any other remedy which the Investors
or the Company may have.
6.7 Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic substantive laws of the State of Delaware,
without giving effect to any choice or conflict of law provision or rule that
would cause the application of the laws of any other jurisdiction.
-12-
6.8 Notices. All notices and other communications given to any party
hereto pursuant to this Agreement shall be in writing and shall be hand
delivered, or sent either by (a) electronic mail, (b) an overnight express
courier service that provides written confirmation of delivery; or (c) facsimile
transmission with written confirmation by the sending machine or with telephone
confirmation of receipt (provided that a confirming copy is sent by overnight
express courier service that provides written confirmation of delivery),
addressed as follows:
(a) If to the Company:
Jabber, Inc.
1899 Wynkoop Street
Denver, CO 80202
Tel: 303-308-3255
Fax: 303-308-3215
E-mail: ghagan@jabber.com
Attention: COO/CFO
with a copy to:
Jabber, Inc.
1899 Wynkoop Street
Denver, CO 80202
Tel: 303-308-3255
Fax: 303-308-3215
E-mail: lbranson@webb.net
Attention: Secretary/General Counsel
(b) If to the Investors:
To the address of each Investor set forth on
Exhibit A hereto
with a copy to:
Gibson Dunn & Crutcher LLP
1530 Page Mill Road
Palo Alto, CA 94304
Tel: (650) 849-5311
Fax: (650) 849-5333
Attention: Greg Davidson, Esq.
and
-13-
Davis Graham & Stubbs LLP
1550 Seventeenth Street
Suite 500
Denver, CO 80202
Tel: (303) 892-9400
Fax: (303) 893-1379
Attention: Chris Richardson, Esq.
and
Robert Attai, Esq.
Any communication given in conformity with this Section 6.8, shall be effective
upon the earlier of actual receipt or deemed delivery. Delivery shall be deemed
to have occurred as follows: if telecopied or sent by electronic mail, upon
written confirmation by the sending machine of effective transmission or upon
telephone confirmation of receipt; and if sent by overnight express courier
service, the next business day. Any party may at any time change its address for
receiving communications pursuant to this Section 6.8 by giving notice of a new
address in the manner provided herein.
6.9 Assignment. Except in connection with a Transfer permitted by and
completed in accordance with Sections 2.2, 2.3, 2.4, 2.6, or 3.4 hereof, as the
case may be, none of the rights and obligations of any Investor set forth in
this Agreement may be transferred or assigned without the prior written consent
of the Company (which consent shall not be unreasonably withheld), and any
purported assignment made without such consent shall be void. None of the rights
and obligations of the Company set forth in this Agreement may be transferred or
assigned without the prior written consent of the Series D Investors holding a
majority of the outstanding Series D Preferred Stock, and any purported
assignment made without such consent shall be void. This Agreement shall be
binding upon, and inure to the benefit of, the parties hereto, all permitted
transferees and assignees of any Investor, and all of the respective heirs,
legatees, personal representatives, successors and assigns of any Investor, to
the extent permitted by this Agreement.
6.10 Invalid Provision. If any term or provision of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable
in any respect, the remainder of the terms and provisions shall be unaffected
and shall remain in full force and effect, and any such invalid, void or
unenforceable term or provision shall be construed by limiting it so as to be
valid and enforceable to the maximum extent compatible with, and possible under,
applicable law.
6.11 Time Periods. In computing the number of days for any purpose of
this Agreement, all days shall be counted including Saturdays, Sundays and
holidays, except that if the last day of any period occurs on a Saturday, Sunday
or holiday, the period will be deemed extended to the end of the next succeeding
day which is not a Saturday, Sunday or holiday. Notwithstanding the foregoing,
and solely for computing the number of days for purposes of Section 3.1 of this
Agreement, Saturdays, Sundays and holidays shall not be counted. A holiday for
purposes of this Agreement shall mean those days on which banks in the State of
Delaware may, or are obligated to, remain closed.
-14-
6.12 Headings. The Table of Contents and the Article, Section and
subsection headings are included solely for convenient reference and shall not
be deemed to provide an accurate description of the content of any Article,
Section or subsection hereof or otherwise affect the meaning or interpretation
of any of the provisions hereof.
6.13 Gender. All pronouns used herein shall include all genders and
the singular and plural as the context requires.
6.14 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 but one and the same instrument.
6.15 Delivery by Facsimile. This Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall re-execute original forms thereof and deliver them to
all other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.
6.16 Interpretation of Agreement. The parties hereto acknowledge and
agree that this Agreement has been negotiated at arm's-length and among parties
equally sophisticated and knowledgeable in the matters dealt with in this
Agreement. Accordingly, any rule of law or legal decision that would require
interpretation of any ambiguities in this Agreement against the party that has
drafted it is not applicable and is waived. The provisions of this Agreement
shall be interpreted in a reasonable manner to effect the intent of the parties
as set forth in this Agreement.
[signature pages follow]
-15-
IN WITNESS WHEREOF, the parties hereto have executed this Right of
First Refusal and Co-Sale Agreement as of the day and year first above written.
JABBER, INC.
By: /s/ Gwenael Hagan
---------------------------------------
Name: Gwenael Hagan
Title: COO/CFO
SERIES D INVESTORS:
FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS
By: /s/ Stephane Couvreur
---------------------------------------
Name: Stephane Couvreur
Title: General Manager
INTEL CAPITAL CORPORATION
By: /s/ Ravi Jacob
---------------------------------------
Name: Ravi Jacob
Title: Vice President, Finance &
Enterprise Services Group,
Assistant Treasurer, Strategic
Investments & Acquisitions
WEBB INTERACTIVE SERVICES, INC.
By: /s/ W. R. Cullen
---------------------------------------
Name: W. R. Cullen
Title: President & CEO
SIGNATURE PAGE TO THE RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT AMONG JABBER,
INC. AND THE PARTIES NAMED HEREIN
PRIOR INVESTORS:
FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS
By: /s/ Stephane Couvreur
---------------------------------------
Name: Stephane Couvreur
Title: General Manager
WEBB INTERACTIVE SERVICES, INC.
By: /s/ W. R. Cullen
---------------------------------------
Name: W. R. Cullen
Title: President & CEO
SIGNATURE PAGE TO THE RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT AMONG JABBER,
INC. AND THE PARTIES NAMED HEREIN
EXHIBIT A
SCHEDULE OF INVESTORS
SERIES D INVESTORS
- ------------------
FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS
38-40 rue du Gal Leclerc
92794 Issy les Moulineaux Cedex 9
Paris, France
Fax: 011 33 145 296 560
INTEL CAPITAL CORPORATION
2200 Mission College Blvd.
M/S RN6-46
Santa Clara, CA 95052
Attention: Portfolio Manager
Fax Number: (408) 765-6038
E-mail: portfolio.manager@intel.com
WEBB INTERACTIVE SERVICES, INC.
1899 Wynkoop Street
Suite 600
Denver, CO
80202 Attention: Secretary/General Counsel
Fax: (303) 308-3219
E-Mail: lbranson@webb.net
- ----------------------------
- ----------------------------
PRIOR INVESTORS
FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS
WEBB INTERACTIVE SERVICES, INC.
EXHIBIT D
VOTING AGREEMENT
================================================================================
JABBER, INC.
VOTING AGREEMENT
DATED MARCH 17, 2003
================================================================================
JABBER, INC.
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Agreement") is made effective as of March
17, 2003, by and among Jabber, Inc., a Delaware corporation (the "Company"), and
those parties listed as Investors on Exhibit A attached hereto (hereinafter
sometimes referred to individually as an "Investor" and collectively, as the
"Investors").
BACKGROUND
The Company and the Investors have entered into that certain Series D
Preferred Stock Purchase Agreement dated March 17, 2003 (the "Series D Purchase
Agreement").
As a condition and a material inducement to the obligation of the
Investors to consummate the transactions contemplated by the Series D Purchase
Agreement, the Company and each of the Investors have agreed to enter into this
Agreement to provide for the future voting of shares of the Common Stock and the
Series D Preferred Stock with respect to the election of the Board of Directors.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, and intending to be legally bound hereby, the
Investors and the Company hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Unless the contract otherwise requires, the following
terms shall have the following meanings for purposes of this Agreement:
(a) "Agreement" shall mean this Voting Agreement.
(b) "Board of Directors" shall mean the Board of Directors of the
Company.
(c) "Common Stock" shall mean the Common Stock, par value $0.01
per share, of the Company.
(d) "Company" shall mean Jabber, Inc., a Delaware corporation.
(e) "Company Director" shall mean the Director nominated by the
Company.
(f) "FTTI Directors" shall mean the Directors nominated by France
Telecom Technologies Investissements.
(g) "Independent Directors" shall mean the Directors nominated in
accordance with Section 2.5 hereto.
(h) "Qualified Public Offering" shall mean a firm commitment
underwritten public offering pursuant to a registration statement under the
Securities Act, covering the offer and sale by the Company of Common Stock at a
public offering price per share that is not less than $1.40 per share (as
appropriately adjusted for any stock dividends, splits, combinations, divisions,
recapitalizations or similar transactions affecting the Series D Preferred Stock
after the date of this Agreement) and with a total in gross offering proceeds of
not less than $20,000,000 (prior to deducting underwriter discounts and
commissions and expenses of the offering).
(i) "Restated Certificate" shall have the meaning set forth in
the Background section of this Agreement.
(j) "Series D Preferred Stock" shall mean the Series D Preferred
Stock, par value $0.01 per share, of the Company.
(k) "Series D Purchase Agreement" shall have the meaning set
forth in the Background section of this Agreement.
(l) "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
(m) "Webb Directors" shall mean the Directors nominated by Webb
Interactive Services, Inc.
ARTICLE 2
AGREEMENT TO VOTE FOR DIRECTORS
2.1 Election of Directors--General. Each Investor agrees to hold all
shares of the Common Stock and Series D Preferred Stock owned by such Investor
subject to, and to vote all of such shares of the Common Stock and Series D
Preferred Stock in accordance with, the provisions of this Agreement. As of the
date hereof and prior to any Subsequent Closing (as such term is defined under
the Series D Purchase Agreement), the Board of Directors shall be comprised of
seven (7) directors: two (2) directors who shall be nominated by Webb
Interactive Services, Inc. ("Webb"), two (2) directors who shall be nominated by
France Telecom Technologies Investissements ("FTTI"), one (1) director who shall
be a member of the Company's senior management and two (2) directors who shall
each be qualified and independent, including being independent of all Investors.
In the event of a Subsequent Closing, the Board of Directors shall be comprised
of five (5) directors: one (1) director who shall be nominated by Webb, one (1)
director who shall be nominated by FTTI, one (1) director who shall be a member
of the Company's senior management, one (1) director who shall be nominated by
the subsequent purchaser(s) (but, for the avoidance of doubt, excluding Webb
from the nominating process) participating in the Subsequent Closing and one (1)
director who shall be qualified and independent, including being independent of
all Investors.
-2-
2.2 Election of Directors--FTTI Directors
(a) As of the date hereof and prior to any Subsequent Closing, at
each annual meeting of the stockholders of the Company, or at any meeting of the
stockholders of the Company at which members of the Board of Directors are to be
elected, or whenever members of the Board of Directors are to be elected by
written consent, the Investors agree to vote their shares of Common Stock and
Series D Preferred Stock (or execute a written consent with respect thereto) so
as to elect as the FTTI Directors, two (2) nominees for election to the Board of
Directors designated by FTTI. In the event of a Subsequent Closing, immediately
after such Subsequent Closing, FTTI acknowledges and agrees that it will take
any and all actions necessary to remove one of the FTTI Directors from the Board
of Directors. After removal of such FTTI Director, at each annual meeting of the
stockholders of the Company, or at any meeting of the stockholders of the
Company at which members of the Board of Directors are to be elected, or
whenever members of the Board of Directors are to be elected by written consent,
the Investors agree to vote their shares of Common Stock and Series D Preferred
Stock (or execute a written consent with respect thereto) so as to elect as the
FTTI Director, one (1) nominee for election to the Board of Directors designated
by FTTI.
(b) It is agreed that as of the date of this Agreement, the
initial nominees of FTTI shall be Claude Pedrillat and Stephane Couvreur.
(c) In the event of a vacancy in one or more of the seats on the
Board of Directors held by a FTTI Director, whether as a result of the
resignation, death, removal or disqualification of a FTTI Director or for any
other reason whatsoever (but, for the avoidance of doubt, excluding any vacancy
which shall arise solely as a result of a reduction in the number of FTTI
Directors after a Subsequent Closing), FTTI shall have the right to designate a
successor to fill the vacancy created thereby, and, after written notice of such
successor has been given to the Investors, the Investors agree to vote their
shares of Common Stock and Series D Preferred Stock (or execute a written
consent with respect thereto) so as to elect such successor designated by FTTI
to serve on the Board of Directors as one of the FTTI Directors.
(d) FTTI shall have the right to remove any individual serving as
a FTTI Director at any time and from time to time, with or without cause, in its
sole discretion, and, after written notice of its intention to remove any such
FTTI Director has been given by the Investors, the Investors agree to vote their
shares of Common Stock and Series D Preferred Stock (or execute a written
consent with respect thereto) so as to remove such FTTI Director and to take the
action to fill the vacancy created by such removal as is contemplated pursuant
to Section 2.2(c) above.
2.3 Election of Directors--Webb Directors
(a) As of the date hereof and prior to any Subsequent Closing, at
each annual meeting of the stockholders of the Company, or at any meeting of the
stockholders of the Company at which members of the Board of Directors are to be
elected, or whenever members of the Board of Directors are to be elected by
written consent, the Investors agree to vote their shares of Common Stock and
Series D Preferred Stock (or execute a written consent with respect thereto) so
as to elect as the Webb Directors, two (2) nominees for election to the Board of
-3-
Directors designated by Webb. In the event of a Subsequent Closing, immediately
after such Subsequent Closing, Webb acknowledges and agrees that it will take
any and all actions necessary to remove one of the Webb Directors from the Board
of Directors. After removal of such Webb Director, then at each annual meeting
of the stockholders of the Company, or at any meeting of the stockholders of the
Company at which members of the Board of Directors are to be elected, or
whenever members of the Board of Directors are to be elected by written consent,
the Investors agree to vote their shares of Common Stock and Series D Preferred
Stock (or execute a written consent with respect thereto) so as to elect as the
Webb Director, one (1) nominee for election to the Board of Directors designated
by Webb.
(b) It is agreed that as of the date of this Agreement, the
initial nominees of Webb shall be Bill Cullen and Rick Jennewine.
(c) In the event of a vacancy in one or more of the seats on the
Board of Directors held by a Webb Director, whether as a result of the
resignation, death, removal or disqualification of a Webb Director or for any
other reason whatsoever (but, for the avoidance of doubt, excluding any vacancy
which shall arise solely as a result of a reduction in the number of Webb
Directors after a Subsequent Closing), Webb shall have the right to designate a
successor to fill the vacancy created thereby, and, after written notice of such
successor has been given to the Investors, the Investors agree to vote their
shares of Common Stock and Series D Preferred Stock (or execute a written
consent with respect thereto) so as to elect such successor designated by Webb
to serve on the Board of Directors as one of the Webb Directors.
(d) Webb shall have the right to remove any individual serving as
a Webb Director at any time and from time to time, with or without cause, in its
sole discretion, and, after written notice of its intention to remove any such
Webb Director has been given by the Investors, the Investors agree to vote their
shares of Common Stock and Series D Preferred Stock (or execute a written
consent with respect thereto) so as to remove such Webb Director and to take the
action to fill the vacancy created by such removal as is contemplated pursuant
to Section 2.3(c) above.
2.4 Election of Directors--Company Director
(a) At each annual meeting of the stockholders of the Company, or
at any meeting of the stockholders of the Company at which members of the Board
of Directors are to be elected, or whenever members of the Board of Directors
are to be elected by written consent, the Investors agree to vote their shares
of Common Stock and Series D Preferred Stock (or execute a written consent with
respect thereto) so as to elect as a nominee who is a member of the Company's
senior management (the "Company Director") to the Board of Directors.
(b) It is agreed that as of the date of this Agreement, the
Company Director shall be Robert Balgley.
(c) In the event of a vacancy in the seat on the Board of
Directors held by the Company Director, whether as a result of the resignation,
death, removal or disqualification of the Company Director or for any other
reason whatsoever, a majority of Series D Preferred Stock shall have the right
to designate a successor to fill the vacancy created thereby, and, after
-4-
written notice of such successor has been given to the Investors, the Investors
agree to vote their shares of Common Stock and Series D Preferred Stock (or
execute a written consent with respect thereto) so as to elect such successor
des to serve on the Board of Directors as the Company Director.
(d) A majority of Series D Preferred Stock, shall have the right
to remove any individual serving as the Company Director at any time and from
time to time, with or without cause, and, after written notice of its intention
to remove any such Company Director has been given by the Investors, the
Investors agree to vote their shares of Common Stock and Series D Preferred
Stock (or execute a written consent with respect thereto) so as to remove such
Company Director and to take the action to fill the vacancy created by such
removal as is contemplated pursuant to Section 2.4(c) above.
2.5 Election of Directors--Independent Directors
(a) As of the date hereof and prior to any Subsequent Closing, at
each annual meeting of the stockholders of the Company, or at any meeting of the
stockholders of the Company at which members of the Board of Directors are to be
elected, or whenever members of the Board of Directors are to be elected by
written consent, the Investors agree to vote their shares of Common Stock and
Series D Preferred Stock (or execute a written consent with respect thereto) so
as to elect as the Independent Directors, two (2) nominees, which nominees shall
be qualified to serve on the Board of Directors and shall be independent,
including being independent of all Investors (each an "Independent Director" and
collectively the "Independent Directors"). In the event of a Subsequent Closing,
then at each annual meeting of the stockholders of the Company, or at any
meeting of the stockholders of the Company at which members of the Board of
Directors are to be elected, or whenever members of the Board of Directors are
to be elected by written consent, the Investors agree to vote their shares of
Common Stock and Series D Preferred Stock (or execute a written consent with
respect thereto) so as to elect as the Independent Director one (1) nominee
mutually agreed upon between Webb, FTTI and Intel Capital Corporation ("Intel")
to the Board of Directors. Immediately after such Subsequent Closing, each of
Webb, FTTI and Intel acknowledges and agrees that it will take any and all
actions necessary to remove one of the Independent Directors from the Board of
Directors.
(b) It is agreed that as of the date of this Agreement, one of
the Independent Directors shall be Perry Evans.
(c) It is agreed that as of the date of this Agreement, the
second Independent Director shall be a nominee mutually agreed upon between
Webb, FTTI and Intel.
(d) In the event of a vacancy in one or more of the seats on the
Board of Directors held by an Independent Director, whether as a result of the
resignation, death, removal or disqualification of a Independent Director or for
any other reason whatsoever (but, for the avoidance of doubt, excluding any
vacancy which shall arise solely as a result of a reduction in the number of
Independent Directors after a Subsequent Closing),Webb, FTTI and Intel shall
mutually agree upon the designation of a successor to fill the vacancy created
thereby, and, after written notice of such successor has been given to the
Investors, the Investors agree to vote their
-5-
shares of Common Stock and Series D Preferred Stock (or execute a written
consent with respect thereto) so as to elect such successor mutually designated
by Webb, FTTI and Intel to serve on the Board of Directors as one of the
Independent Directors.
Notwithstanding any other provision to the contrary, 66-2/3% of the Series D
Preferred Stock shall have the right to remove any individual serving as an
Independent Director at any time and from time to time, with or without cause.
Upon the removal of any Independent Director pursuant to this Section 2.4(e),
the Investors agree to vote their shares of Common Stock and Series D Preferred
Stock (or execute a written consent with respect thereto) so as to fill the
vacancy created by such removal as is contemplated pursuant to Section 2.4(d)
above.
ARTICLE 3
MISCELLANEOUS
3.1 Legends on Share Certificates. The following legend shall be
imprinted conspicuously on the face of each certificate representing shares of
Series D Preferred Stock:
NOTICE IS HEREBY GIVEN THAT THE SALE, ASSIGNMENT, TRANSFER, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO AND RESTRICTED BY THE PROVISIONS OF A
CERTAIN VOTING AGREEMENT AMONG JABBER, INC. AND CERTAIN OF THE
COMPANY'S STOCKHOLDERS, DATED AS OF MARCH 17, 2003, A COPY OF WHICH
AGREEMENT MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE COMPANY, AND
ALL OF THE PROVISIONS OF WHICH AGREEMENT ARE INCORPORATED BY REFERENCE
IN THIS CERTIFICATE.
3.2 Transfer of Series D Preferred Stock. If and whenever shares of
Series D Preferred Stock are sold or transferred by any Investor, pursuant to
the provisions of that certain Right of First Refusal and Co-Sale Agreement
dated as of March 17, 2003, the selling Investor shall do all things and execute
and deliver all documents, and cause any transferee of the Series D Preferred
Stock to do all things and execute and deliver all documents, as may be
necessary to cause the transferee to be bound by the terms and conditions of
this Agreement applicable to the Investors, and any such shares so sold shall
continue to be subject to the obligations imposed on the holder of such shares
by this Agreement.
3.3 Termination of Agreement. This Agreement shall terminate upon the
earliest to occur of (i) a Qualified Public Offering, (ii) written agreement of
the Company and the Investors holding a majority of the then outstanding shares
of Series D Preferred Stock and (iii) the dissolution of the Company.
3.4 Entire Agreement. This Agreement contains the entire agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements among any of them with respect thereto.
-6-
3.5 Amendment; Waiver. Neither this Agreement nor any term hereof may
be amended, waived or discharged other than by written instrument signed by the
Company and the holders of a majority of the outstanding shares of Series D
Preferred Stock then owned by the Investors.
Each Investor acknowledges that by the operation of this Section 3.5,
third parties have the right and power to diminish or eliminate all rights of
such Investor under this Agreement. Each Investor also acknowledges that
purchasers of shares of Series D Preferred Stock issued pursuant to the Series D
Stock Purchase Agreement in any Subsequent Closing (as such term is defined in
the Series D Stock Purchase Agreement) after the date of this Agreement shall be
required to become parties to this Agreement by executing and delivering a
counterpart signature page hereto and, upon the Company adding the name of any
such party to Exhibit A, any such party shall be an Investor for all purposes
hereunder without any further amendment to this Agreement or any further action
on the part of the Investors. Notwithstanding anything to the contrary contained
herein, no modification, amendment or waiver that would treat any Investor in a
non-ratable, discriminatory manner in comparison to other similarly situated
Investors shall be effective against such Investor without the written consent
of such Investor.
3.6 Specific Performance. Because of the unique character of the
rights granted pursuant to this Agreement, the Investors and the Company will be
irreparably damaged if this Agreement is not specifically enforced. Should any
dispute arise concerning the voting of stock, an injunction may be issued
restraining any such voting pending the determination of such controversy. In
the event of any controversy concerning the right or obligation to vote any such
stock, such right or obligation shall be enforceable in a court of equity by a
decree of specific performance. Such remedy shall, however, be cumulative and
not exclusive, and shall be in addition to any other remedy which the Investors
or the Company may have.
3.7 Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic substantive laws of the State of Delaware,
without giving effect to any choice or conflict of law provision or rule that
would cause the application of the laws of any other jurisdiction.
3.8 Notices. All notices and other communications given to any party
hereto pursuant to this Agreement shall be in writing and shall be hand
delivered, or sent either by (a) certified mail, postage prepaid, return receipt
requested; (b) electronic mail, (c) an overnight express courier service that
provides written confirmation of delivery; or (d) facsimile transmission with
written confirmation by the sending machine or with telephone confirmation of
receipt (provided that a confirming copy is sent by overnight express courier
service that provides written confirmation of delivery), addressed as follows:
-7-
(a) If to the Company:
Jabber, Inc.
1899 Wynkoop Street
Denver, CO 80202
Tel: 303-308-3255
Fax: 303-308-3215
E-mail: ghagan@jabber.com
Attention: COO/CFO
with a copy to:
Jabber, Inc.
1899 Wynkoop Street
Denver, CO 80202
Tel: 303-308-3224
Fax: 303-308-3215
E-mail: lbranson@webb.net
Attention: Secretary/General Counsel
(b) If to the Investors:
To the address of each Investor set forth on
the signature page hereto
with a copy to:
Gibson Dunn & Crutcher LLP
1530 Page Mill Road
Palo Alto, CA 94304
Tel: (650) 849-5311
Fax: (650) 849-5333
Attention: Greg Davidson, Esq.
and
Davis Graham & Stubbs LLP
1550 Seventeenth Street
Suite 500
Denver, CO 80202
Tel: (303) 892-9400
Fax: (303) 893-1379
Attention: Chris Richardson, Esq.
and
Robert Attai, Esq.
-8-
Any communication given in conformity with this Section 3.8, shall be effective
upon the earlier of actual receipt or deemed delivery. Delivery shall be deemed
to have occurred as follows: if hand delivered on the day so delivered; if
telecopied or sent by electronic mail, upon written confirmation by the sending
machine of effective transmission or upon telephone confirmation of receipt; and
if sent by overnight express courier service, the next business day. Any party
may at any time change its address for receiving communications pursuant to this
Section 3.8 by giving notice of a new address in the manner provided herein.
3.9 Assignment. This Agreement shall be binding upon, and inure to the
benefit of, the parties hereto, all permitted transferees and assignees of any
Investor, and all of the respective heirs, legatees, personal representatives,
successors and assigns of any Investor, to the extent permitted by this
Agreement.
3.10 Invalid Provision. If any term or provision of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable
in any respect, the remainder of the terms and provisions shall be unaffected
and shall remain in full force and effect, and any such invalid, void or
unenforceable term or provision shall be construed by limiting it so as to be
valid and enforceable to the maximum extent compatible with, and possible under,
applicable law.
3.11 Time Periods. In computing the number of days for any purpose of
this Agreement, all days shall be counted including Saturdays, Sundays and
holidays, except that if the last day of any period occurs on a Saturday, Sunday
or holiday, the period will be deemed extended to the end of the next succeeding
day which is not a Saturday, Sunday or holiday. A holiday for purposes of this
Agreement shall mean those days on which banks in the State of Delaware may, or
are obligated to, remain closed.
3.12 Gender. All pronouns used herein shall include all genders and
the singular and plural as the context requires.
3.13 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 but one and the same instrument.
3.14 Delivery by Facsimile. This Agreement, the agreements referred to
herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall re-execute original forms thereof and deliver them to
all other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.
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3.15 Interpretation of Agreement. The parties hereto acknowledge and
agree that this Agreement has been negotiated at arm's-length and among parties
equally sophisticated and knowledgeable in the matters dealt with in this
Agreement. Accordingly, any rule of law or legal decision that would require
interpretation of any ambiguities in this Agreement against the party that has
drafted it is not applicable and is waived. The provisions of this Agreement
shall be interpreted in a reasonable manner to effect the intent of the parties
as set forth in this Agreement.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Voting
Agreement as of the day and year first above written.
JABBER, INC.
By: /s/ Gwenael Hagan
---------------------------------------
Name: Gwenael Hagan
Title: COO/CFO
INVESTORS:
FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS
By: /s/ Stephane Couvreur
---------------------------------------
Name: Stephane Couvreur
Title: General Manager
Address: 38-40 rue du General Leclerc
92794 Issy les Moulineaux Cedex 9
France
Fax #: +33 145296560
E-mail: stephane.couvreur@francetelecom.com
INTEL CAPITAL CORPORATION
By: /s/ Ravi Jacob
---------------------------------------
Name: Ravi Jacob
Title: Vice President, Finance &
Enterprise Services Group; Asst.
Treasurer, Strategic Investments &
Acquisitions
Address: 2200 Mission College Blvd.
M/S RN6-46
Santa Clara, CA 95052
Attention: Portfolio Manager
Fax Number: (408) 765-6038
SIGNATURE PAGE TO THE VOTING AGREEMENT AMONG JABBER, INC. AND THE INVESTORS
NAMED HEREIN
WEBB INTERACTIVE SERVICES, INC.
By: /s/ W. R. Cullen
---------------------------------------
Name: W. R. Cullen
Title: President & CEO
Address: 1899 Wynkoop, Suite 600
Denver, Colorado 80202
Fax #: 303-308-3215
E-mail: bcullen@webb.net
SIGNATURE PAGE TO THE VOTING AGREEMENT AMONG JABBER, INC. AND THE INVESTORS
NAMED HEREIN
EXHIBIT A
SCHEDULE OF INVESTORS
INVESTORS
FRANCE TELECOM TECHNOLOGIES INVESTISSEMENTS
INTEL CAPITAL CORPORATION
2200 Mission College Blvd.
M/S RN6-46
Santa Clara, CA 95052
Attention: Portfolio Manager
Fax Number: (408) 765-6038
E-mail: portfolio.manager@intel.com
WEBB INTERACTIVE SERVICES, INC.
1899 Wynkoop Street
Suite 600
Denver, CO
80202
Attention: Secretary/General Counsel
Fax: (303) 308-3219
E-Mail: lbranson@webb.net
- -----------------------
- -----------------------
EXHIBIT E
RESTATED CERTIFICATE
RESTATED CERTIFICATE OF INCORPORATION
OF
JABBER, INC.
* * * * * *
Jabber, Inc., a corporation organized and existing under the laws of the
State of Delaware, hereby certifies as follows:
1. The name of the corporation is Jabber, Inc. The date of filing of its
original Certificate of Incorporation with the Secretary of State was February
15, 2000.
2. This Restated Certificate of Incorporation restates and integrates and
further amends the Certificate of Incorporation of this corporation by amending
the fourth Article to: (a) increase the number of authorized shares of Common
Stock and the number of authorized shares of Preferred Stock; (b) automatically
convert to shares of Common Stock all issued and outstanding shares of Series B
Convertible Preferred Stock and Series C Convertible Preferred Stock; and (c)
eliminate the Series B Convertible Preferred Stock and Series C Convertible
Preferred Stock.
3. The text of the Certificate of Incorporation as amended or supplemented
heretofore is further amended hereby to read as herein set forth in full:
ARTICLE I
The name of this corporation is Jabber, Inc. (the "Corporation").
ARTICLE II: REGISTERED OFFICE & AGENT
The address of this Corporation's registered office in the State of
Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle.
The name of this Corporation's registered agent at such address is The
Corporation Trust Company.
ARTICLE III: PURPOSE
The nature of the business purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.
ARTICLE IV: AUTHORIZED SHARES
The Corporation is authorized to issue two classes of shares of stock to be
designated, respectively, Common Stock, $0.01 par value, and Preferred Stock,
$0.01 par value. The total number of shares that the Corporation is authorized
to issue is 175,000,000 shares. The number of shares of Common Stock authorized
is 100,000,000. The number of shares of Preferred Stock authorized is
75,000,000; including an aggregate of 8,824,000 shares of Preferred Stock
previously designated by the Board of Directors as Series A Convertible
Preferred Stock, Series B Convertible Preferred Stock and Series C Convertible
Preferred Stock and described in designations filed with the Secretary of State
of the State of Delaware. Such designations,
including all amendments thereto, are incorporated by reference herein. The
Series A Convertible Preferred Stock designation authorized 8,800,000 shares;
all of which were issued and subsequently converted to shares of Common Stock.
The Series A Convertible Preferred Stock has ceased to exist and the board of
Directors has no authority to issue additional shares of Series A Convertible
Preferred Stock. The Series B Convertible Preferred Stock designation authorized
12,000 shares; of which 4,881 shares were issued, with all but 100 of the issued
shares subsequently converted to shares of Common Stock. The 100 remaining
issued shares of the Series B Convertible Preferred Stock shall be automatically
converted into shares of Common Stock effective upon the filing of this Restated
Certificate of Incorporation with the Secretary of State of the State of
Delaware. Upon the conversion of the 100 shares of Series B Convertible
Preferred Stock, the Series B Convertible Preferred Stock will be deemed to
cease to exist and the Board of Directors will have no authority to issue
additional shares of Series B Convertible Preferred Stock. The Series C
Convertible Preferred Stock designation authorized 12,000 shares; of which 7,871
shares were issued, with all but 125 of the issued shares subsequently converted
to shares of Common Stock. The 125 remaining issued shares of the Series C
Convertible Preferred Stock shall be automatically converted into shares of
Common Stock effective upon the filing of this Restated Certificate of
Incorporation with the Secretary of State of the State of Delaware. Upon the
conversion of the 125 shares of Series C Convertible Preferred Stock, the Series
C Convertible Preferred Stock will be deemed to cease to exist and the Board of
Directors will have no authority to issue additional shares of Series C
Convertible Preferred Stock. Additional Preferred Stock may be issued from time
to time in one or more other series pursuant to a resolution or resolutions
providing for such issue duly adopted by the Board of Directors (authority to do
so being hereby expressly vested in the Board). The Board of Directors is
further authorized to determine the rights, preferences, privileges and
restrictions granted to or imposed upon any wholly unissued series of Preferred
Stock and to fix the number of shares of any series of Preferred Stock and the
designation of any such series of Preferred Stock. The authority of the Board of
Directors with respect to each such class or series shall include, without
limitation of the foregoing, the right to determine and fix: (a) the distinctive
designation of such class or series and the number of shares to constitute such
class or series; (b) the rate at which dividends, if any, on the shares of such
class or series shall be declared and paid, or set aside for payment, whether
dividends at the rate so determined shall be cumulative or accruing, and whether
the shares of such class or series shall be entitled to any participating or
other dividends in addition to dividends at the rate so determined, and if so,
on what terms; (c) the right or obligation, if any, of the corporation to redeem
shares of the particular class or series of Preferred Stock and, if redeemable,
the price, terms and manner of such redemption; (d) the special and relative
rights and preferences, if any, and the amount or amounts per share, which the
shares of such class or series of Preferred Stock shall be entitled to receive
upon any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation; (e) the terms and conditions, if any, upon which shares of such
class or series shall be convertible into, or exchangeable for, shares of
capital stock of any other class or series, including the price or prices or the
rate or rates of conversion or exchange and the terms of adjustment, if any; (f)
the obligation, if any, of the corporation to retire, redeem or purchase shares
of such class or series pursuant to a sinking fund or fund of a similar nature
or otherwise, and the terms and conditions of such obligation; (g) voting
rights, if any, on the issuance of additional shares of such class or series or
any shares of any other class or series of Preferred Stock; (h) limitations, if
any, on the issuance of additional shares of such class or series or any shares
of any other class or series of
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Preferred Stock; and (i) such other preferences, powers, qualifications, special
or relative rights and privileges thereof as the Board of Directors of the
Corporation, acting in accordance with this Restated Certificate of
Incorporation, may deem advisable and are not inconsistent with law and the
provisions of this Restated Certificate of Incorporation.
ARTICLE V: CUMULATIVE VOTING PROHIBITION
Holders of stock of any class or series of this Corporation shall not be
entitled to cumulate their votes for the election of directors or any other
matter submitted to a vote of the stockholders.
ARTICLE VI: NO PREEMPTIVE RIGHTS
Stockholders shall have no rights, preemptive or otherwise, to acquire any
part of any unissued shares or other securities of this Corporation or of any
rights to purchase shares or other securities of this Corporation before the
Corporation may offer them to other persons.
ARTICLE VII: NUMBER OF DIRECTORS
The number of directors of the Corporation shall be fixed from time to time
by resolution of the Board of Directors or by the stockholders at the annual
meeting of stockholders. Elections of directors need not be by written ballot
unless the Bylaws of the Corporation so provide.
ARTICLE VIII: AMENDMENT OF BYLAWS
Except as otherwise provided by this Certificate of Incorporation, in
furtherance and not in limitation of the powers conferred by statute, the Board
of Directors is expressly authorized to make, repeal, alter, amend and rescind
any and all of the Bylaws of the Corporation.
ARTICLE IX: REMOVAL OF DIRECTOR
Any director may be removed from office either with or without cause at any
time by the affirmative vote of stockholders of record holding a majority of the
outstanding shares of the stock of this Corporation entitled to vote, given at a
meeting of the stockholders called for that purpose.
ARTICLE X: LIMITATION OF LIABILITY
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for (i) liability based on a breach of the duty of
loyalty to the Corporation or the stockholders; (ii) liability for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law; (iii) liability based on the payment of an improper dividend
or an improper repurchase of the Corporation's stock under Section 174 of the
Delaware General Corporation Law; or (iv) liability for any transaction from
which the director derived an improper personal benefit. If the Delaware General
Corporation Law is amended after approval by the stockholders of this Article X
to authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be
-3-
eliminated or limited to the fullest extent permitted by the Delaware General
Corporation Law as so amended.
Any repeal or modification of the foregoing provisions of this Article X by
the stockholders of the Corporation is prospective only and shall not adversely
affect any right or protection of a director of the Corporation existing at the
time, or increase the liability of any director or former director of this
Corporation with respect to any acts or omissions of such director occurring
prior to, such repeal or modification.
ARTICLE XI: INDEMNIFICATION
To the fullest extent permitted by applicable law, this Corporation is also
authorized to provide indemnification of (and advancement of expenses to) such
agents (and any other persons to which Delaware law permits this Corporation to
provide indemnification) through Bylaw provisions, agreements with such agents
or other persons, vote of stockholders or disinterested directors or otherwise,
in excess of the indemnification and advancement otherwise permitted by Section
145 of the General Corporation Law of the State of Delaware, subject only to
limits created by applicable Delaware law (statutory or non-statutory) with
respect to actions for breach of duty to this Corporation, its stockholders, and
others.
Any repeal or modification of any of the foregoing provisions of this
Article XI shall not adversely affect any right or protection of a director,
officer, agent or other person existing at the time of, or increase the
liability of any director or former director of this Corporation with respect to
any acts or omissions of such director, officer or agent occurring prior to such
repeal or modification.
ARTICLE XII: STOCKHOLDER MEETINGS
Meeting of the stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.
ARTICLE XIII: AMENDMENT OF CERTIFICATE
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
ARTICLE XIV: ACTION IN WRITING
Any action required to be taken, or which may be taken, at any annual or
special meeting of stockholders of the Corporation, may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, is signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted. Prompt notice of the taking of the corporate
action without a meeting by less
-4-
than unanimous written consent must be given to those stockholders who have not
consented in writing.
4. This Restated Certificate of Incorporation was duly adopted by vote of
the stockholders in accordance with Section 242 and 245 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said corporation has caused this Certificate to be
signed by Lindley S. Branson, its Secretary, this 17th day of March, 2003.
Jabber, Inc.
By /s/ Lindley S. Branson
-----------------------------
Lindley S. Branson, Secretary
-5-
EXHIBIT F
JONA SIDE LETTER
Not included.
EXHIBIT G
WEBB-FTTI LETTER
Not included.
EXHIBIT H
COMPANY FINANCIAL STATEMENTS
Not included.
EXHIBIT I
LEGAL OPINION
Not included.