REGISTRATION RIGHTS AGREEMENT
Exhibit
10.3
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is
entered into as of December 21, 2009, by and among Bluefly, Inc., a Delaware
corporation (the “Company”), Quantum
Industrial Partners LDC (“QIP”), SFM Domestic
Investments, LLC (“SFM” and, together
with QIP, “Xxxxx”), Maverick
Fund USA, Ltd. (“Maverick USA”),
Maverick Fund, L.D.C. (“Maverick Fund”),
Maverick Fund II, Ltd. (“Maverick Fund II”
and, together with Maverick USA and Maverick Fund, “Maverick”), Prentice
Capital Partners, LP (“PCP”), Prentice
Capital Partners QP, LP (“PCP QP”), Prentice
Capital Offshore, Ltd. (“PC Offshore”), GPC XL
III, LLC (“GPC”), PEC I, LLC
(“PEC”), and
S.A.C. Capital Associates, LLC (“SAC” and, together
with PCP, PCP QP, PC Offshore, GPC and PEC, “Prentice”; Xxxxx,
Maverick and Prentice are referred to collectively herein as the “Existing Holders”),
and Rho Ventures VI, L.P. (“Rho”; Xxxxx,
Maverick, Prentice and Rho are referred to collectively herein as the “Investors”).
WHEREAS, the Existing Holders
have been granted certain registration rights pursuant to various purchase
agreements, investment agreements and standby commitment agreements
(collectively, the “Prior
Agreements”);
WHEREAS,
the Existing Holders desire to
terminate the registration rights granted pursuant to the Prior Agreements and
to accept the registration rights created pursuant hereto in lieu of the rights
granted to them under the Prior Agreements;
WHEREAS, the Company and Rho have
entered into a Securities Purchase Agreement, dated as of December 21, 2009 (the
“2009
Securities Purchase Agreement”), pursuant to which Rho has agreed to
purchase, and the Company has agreed to sell, an aggregate of 8,823,529 shares
(the “Shares”) of the Company’s common stock, par
value $.01 per share (the “Common
Stock”), upon the terms and
subject to the conditions set forth therein; and
WHEREAS, the Company
desires to grant to Rho the registration rights set forth herein with respect to
the Shares.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS.
1.1 Defined
Terms. The following capitalized terms used herein have the
following meanings:
“2008 Note Purchase
Agreement” means the Note Purchase Agreement, dated as of July 23, 2008,
by and among the Company, Xxxxx and Maverick.
“2008 Standby
Commitment” means the Standby Commitment Agreement, dated as of March 26,
2008, by and among the Company, Xxxxx and Maverick.
“2009 Securities Purchase
Agreement” has the meaning set forth in the recitals to this
Agreement.
“Additional Shelf
Registration Statement” has the meaning set forth in Section
2.2.3.
“Affiliate” means,
with respect to any Person, any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified
Person.
“Agreement” has the
meaning set forth in the preamble to this Agreement.
“Approved Underwriter”
has the meaning set forth in Section 2.5.2.
“Blackout Period” has
the meaning set forth in Section 2.6.
“Board Restructuring”
has the meaning set forth in the Voting Agreement.
“Commission” means the
Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.
“Common Stock” has the
meaning set forth in the recitals to this Agreement.
“Company” has the
meaning set forth in the preamble to this Agreement.
“Company Underwriter”
has the meaning set forth in Section 2.4.1.
“Cut Back Shares” has
the meaning set forth in 2.2.3.
“Deferral Notice” has
the meaning set forth in Section 2.5.5.
“Deferral Period” has
the meaning set forth in Section 2.5.5.
“Demand Registrable
Securities” means, collectively, the Xxxxx Registrable Securities and the
Rho Registrable Securities.
“Demand Registration”
has the meaning set forth in Section 2.5.1.
“Demand Registration
Statement” has the meaning set forth in Section 2.5.1.
“Demanding Holders”
has the meaning set forth in Section 2.5.1.
“Event” has the
meaning set forth in Section 2.2.4.
“Event Date” has the
meaning set forth in Section 2.2.4.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in effect
from time to time.
“Existing Holders” has
the meaning set forth in the preamble to this Agreement.
“Existing Holders
Registration Statement” has the meaning set forth in Section
2.3.
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“Existing Shelf Registrable
Securities” means the shares of Common Stock and the shares of Common
Stock underlying securities exercisable for or convertible into shares of Common
Stock, the resale of which was registered by the Existing Holders Registration
Statement.
“Filing Deadline” has
the meaning set forth in Section 2.2.1.
“FINRA” has the
meaning set forth in Section 3.1.13.
“GPC” has the meaning
set forth in the preamble to this Agreement.
“Holders’ Counsel” has
the meaning set forth in Section 3.1.1.
“Indemnified Party”
has the meaning set forth in Section 4.3.
“Indemnifying Party”
has the meaning set forth in Section 4.3.
“Inspector” has the
meaning set forth in Section 3.1.9.
“Investors” has the
meaning set forth in the preamble to this Agreement.
“Maverick” has the
meaning set forth in the preamble to this Agreement.
“Maverick 2008 Registrable
Securities” means (i) the 19,797.9 shares of Common Stock issuable upon
exercise of warrants issued to Maverick pursuant to the 2008 Standby Commitment
Agreement, (ii) the shares of Common Stock issuable upon conversion of the
convertible notes issued to Maverick pursuant to the 2008 Note Purchase
Agreement and (iii) any shares of Common Stock that may be issued upon any stock
split, dividend or other distribution, recapitalization or similar event with
respect to the Common Stock described in the foregoing clauses (i) and
(ii).
“Maverick Fund” has
the meaning set forth in the preamble to this Agreement.
“Maverick Fund II” has
the meaning set forth in the preamble to this Agreement.
“Maverick Registrable
Securities” means the shares of Common Stock, and the shares of Common
Stock underlying securities exercisable for or convertible into shares of Common
Stock, acquired by Maverick directly from the Company on or prior to the date
hereof.
“Maverick USA” has the
meaning set forth in the preamble to this Agreement.
“No Second Closing Notice
Date” has the meaning set forth in Section 2.2.1.
“PC Offshore” has the
meaning set forth in the preamble to this Agreement.
“PCP” has the meaning
set forth in the preamble to this Agreement.
“PCP QP” has the
meaning set forth in the preamble to this Agreement.
“PEC” has the meaning
set forth in the preamble to this Agreement.
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“Person” means an
individual, partnership, corporation, limited liability company, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity or enterprise of whatever
nature.
“Piggy-Back Registrable
Securities” means, collectively, the Xxxxx Registrable Securities, the
Maverick Registrable Securities, the Prentice Registrable Securities and the Rho
Registrable Securities.
“Piggy-Back
Registration” has the meaning set forth in Section 2.4.1.
“Potential Material
Event” has the meaning set forth in Section 2.6.
“Prentice” has the
meaning set forth in the preamble to this Agreement.
“Prentice Registrable
Securities” means the shares of Common Stock, and the shares of Common
Stock underlying securities exercisable for or convertible into shares of Common
Stock, acquired by Prentice directly from the Company on or prior to the date
hereof.
“Prior Agreements” has
the meaning set forth in the recitals to this Agreement.
“QIP” has the meaning
set forth in the preamble to this Agreement.
“Records” has the
meaning set forth in Section 3.1.9.
“Registrable
Securities” means, collectively, the Xxxxx Registrable Securities, the
Maverick Registrable Securities, the Prentice Registrable Securities and the Rho
Registrable Securities.
“Registration
Expenses” has the meaning set forth in Section 3.3.
“Requesting Holders”
has the meaning set forth in Section 2.4.1.
“Required Effectiveness
Deadline” has the meaning set forth in Section 2.2.1.
“Rho” has the meaning
set forth in the preamble to this Agreement.
“Rho Notice” means a
notice, if any, delivered by Rho to the Company stating that the Second Closing
will not occur as a result of the failure to (x) satisfy the Stockholder
Approval Condition, or (y) effect the Board Restructuring.
“Rho Registrable
Securities” means (i) the 8,823,529 shares of Common Stock acquired by
Rho pursuant to the 2009 Stock Purchase Agreement and (ii) any shares of Common
Stock that may be issued upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the Common Stock described in
the foregoing clause (i).
“Rule 144” means Rule
144 promulgated under the Securities Act, as such rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect as such Rule.
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“Rule 415” means Rule
415 promulgated under the Securities Act, as such rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect as such Rule.
“SAC” has the meaning
set forth in the preamble to this Agreement.
“Second Closing” has
the meaning set forth in the 2009 Securities Purchase Agreement.
“Second Closing Date”
has the meaning set forth in the 2009 Securities Purchase
Agreement.
“Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect from time
to time.
“SFM” has the meaning
set forth in the preamble to this Agreement.
“Shares” has the
meaning set forth in the recitals to this Agreement.
“Shelf Holders” means,
collectively, Xxxxx, Maverick and Rho.
“Shelf Registrable
Securities” means, collectively, the Rho Registrable Securities, the
Xxxxx 2008 Registrable Securities and the Maverick 2008 Registrable
Securities.
“Shelf Registration
Statement” has the meaning set forth in Section 2.2.1.
“Xxxxx” has the
meaning set forth in the preamble to this Agreement.
“Xxxxx 2008 Registrable
Securities” means (i) the 32,701 shares of Common Stock issuable upon
exercise of warrants issued to Xxxxx pursuant to the 2008 Standby Commitment
Agreement, (ii) the shares of Common Stock issuable upon conversion of the
convertible notes issued to Xxxxx pursuant to the 2008 Note Purchase Agreement
and (iii) any shares of Common Stock that may be issued upon any stock split,
dividend or other distribution, recapitalization or similar event with respect
to the Common Stock described in the foregoing clauses (i) through
(ii).
“Xxxxx Registrable
Securities” mean the shares of Common Stock, and the shares of Common
Stock underlying securities exercisable for or convertible into shares of Common
Stock, acquired by Xxxxx directly from the Company on or prior to the date
hereof.
“Stockholder Approval
Condition” has the meaning set forth in the 2009 Securities Purchase
Agreement.
“Withdrawal Period”
has the meaning set forth in Section 2.5.5.
1.2 General Interpretive
Principles.
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1.2.1.
All share information in this Agreement reflects the 1 for 10 reverse stock
split effected by the Company on April 3, 2008.
1.2.2.
Whenever used in this Agreement, except as otherwise expressly provided or
unless the context otherwise requires, any noun or pronoun shall be deemed to
include the plural as well as the singular and to cover all
genders. The name assigned to this Agreement and the section captions
used herein are for convenience of reference only and shall not be construed to
affect the meaning, construction or effect hereof. Unless otherwise
specified, the terms “hereof,” “herein,” hereunder” and similar terms refer to
this Agreement as a whole (including exhibits, schedules and disclosure
statements hereto), and references herein to Sections refer to Sections of this
Agreement.
2. REGISTRATION
RIGHTS.
2.1 Termination of Prior
Registration Rights; Securities Subject to this Agreement.
2.1.1.
Termination of Prior
Registration Rights. The Company and the Existing Holders
hereby terminate all registration rights granted to the Existing Holders under
the Prior Agreements. The Existing Holders hereby agree to accept the
registration rights afforded by this Agreement in lieu of the registration
rights granted to them under the Prior Agreement. Following the
execution hereof, this Agreement shall embody all of the registration rights
granted to the Investors.
2.1.2.
Securities Subject to
this Agreement. For the purposes of this Agreement,
Registrable Securities will cease to be Registrable Securities when such
Registrable Securities are sold and otherwise transferred pursuant to Rule 144
under the Securities Act or a registration statement covering such Registrable
Securities has been declared effective under the Securities Act by the
Commission and such Registrable Securities have been disposed of pursuant to
such effective registration statement or such Registrable Securities can be sold
under Rule 144 without volume limitations.
2.2 Shelf
Registration.
2.2.1.
The Company shall use its commercially reasonable best efforts to: (i) prepare
and file with the Commission a registration statement under the Securities Act
(as the same may be amended or supplemented from time to time, the “Shelf Registration
Statement”) with respect to the offer and sale of the Shelf Registrable
Securities within thirty (30) days following the first to occur of (x) the
Second Closing Date or (y) the date of the Company’s receipt of the Rho Notice
(such date of receipt being referred to herein as the “No Second Closing Notice
Date”) (or forty-five (45) days following such date if such thirty (30)
day deadline falls within the period during which the Company is preparing its
audited financial statements) (the first to occur of subsections (x) and (y) of
this Section 2.2.1 shall collectively be referred to as the “Filing Deadline”) and
(ii) cause the Shelf Registration Statement to be declared effective by the
Commission, subject to receipt of necessary information from the Shelf Holders,
within one hundred and eighty (180) days following (x) the Second Closing Date
or (y) the No Second Closing Notice Date, as the case may be (the one hundred
and eightieth (180th) day
following such date being referred to herein as the “Required Effectiveness
Deadline”). The Company shall use commercially reasonable best
efforts to maintain the effectiveness of such Shelf Registration Statement until
the earliest to occur of the following (x) all of the Shelf
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Registrable
Securities have been disposed of by Shelf Holders pursuant to the Shelf
Registration Statement, (y) all of the Shelf Registrable Securities can be
resold, without registration, pursuant to Rule 144 without volume limitations or
(z) the Company is no longer a public company subject to the rules and
regulations of the Exchange Act.
2.2.2.
The Shelf Holders will promptly furnish to the Company in writing all
information reasonably requested by the Company for use in connection with the
preparation of the Shelf Registration Statement and obtaining the effectiveness
thereof. The Shelf Holders hereby severally and not jointly represent
and warrant that all such information furnished by it shall be true, accurate
and complete. In addition, each Investor covenants and agrees that it
will comply with all applicable securities laws when trading the Company’s
Common Stock.
2.2.3.
Notwithstanding anything to the contrary herein, if at any time the Commission
takes the position that the offering of some or all of the Shelf Registrable
Securities in the Shelf Registration Statement is not eligible to be made on a
delayed or continuous basis under the provisions of Rule 415 as a result of a
characterization by the Commission of the transaction described by the Shelf
Registration Statement as a primary offering by the Company, the Company shall
use its commercially reasonable best efforts to persuade the Commission that the
offering contemplated by the Registration Statement is a valid secondary
offering and not an offering “by or on behalf of the issuer” as defined in Rule
415. In the event that, despite the Company’s commercially reasonable
best efforts and compliance with the terms of this Section 2.2.3 the Commission
refuses to alter its position, the Company shall (i) remove from the Shelf
Registration Statement such portion of the Shelf Registrable Securities (the
“Cut Back
Shares”) and/or (ii) agree to such restrictions and limitations on the
registration and resale of the Shelf Registrable Securities as the Commission
may require to assure the Company’s compliance with the requirements of Rule
415; provided,
however, that
the Company shall have no liability to any Investor pursuant to Section 2.2.4 or
otherwise as a result of the failure to register any Cut Back Shares as a result
of the Commission’s application of Rule 415 despite the Company's commercially
reasonable best efforts to persuade the Commission that the offering
contemplated by the Shelf Registration Statement is a valid secondary offering
and not an offering “by or on behalf of the issuer” as defined in Rule
415. Any Cut-Back Shares required to be removed from the Shelf
Registration Statement shall be removed (i) first, from the Xxxxx 2008
Registrable Securities and the Maverick 2008 Registrable Securities covered by
such Shelf Registration Statement until all of the Xxxxx 2008 Registrable
Securities and the Maverick 2008 Registrable Securities have been removed (and,
among them, on a pro rata basis based on the number of Xxxxx 2008 Registrable
Securities and Maverick 2008 Registrable Securities outstanding as of the date
of this Agreement) and (ii) second, from the Rho Registrable Securities covered
by such Shelf Registration Statement. As soon as practicable
following such intervening period of time as shall be required by the Commission
or Commission guidance prior to the filing thereof, the Company shall file one
or more additional registration statements covering the resale of as many Cut
Back Shares allowed by the Commission or Commission guidance to be so registered
while maintaining the Company’s compliance with Rule 415 (each, an “Additional Shelf
Registration Statement”). Any such Additional Shelf
Registration Statement shall cover (i) first, the Rho Registrable Securities
until all of the Rho Registrable Securities are covered and (ii) second, the
Xxxxx 2008 Registrable Securities and the Maverick 2008 Registrable Securities
(on a pro rata basis based on the number of Xxxxx 2008 Registrable Securities
and Maverick 2008 Registrable Securities outstanding as of the date of this
Agreement). The Company shall use its commercially reasonable best
efforts to file each Additional Shelf Registration Statement on or
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prior to
10 business days after such day that represents the first opportunity that the
Commission allows the Additional Registration Statement to be filed without the
offering of the shares registered thereunder being deemed a primary offering and
cause each Additional Shelf Registration Statement to be declared effective no
later than, as applicable (a) five business days after the Company receives
notice from the Commission that the Additional Shelf Registration Statement will
not become subject to review or (b) if the Additional Shelf Registration
Statement becomes subject to review by the Commission, 90 days after the filing
thereof. With regard to any such Additional Shelf Registration
Statement, all of the provisions of this Section 2.2.3 shall again be applicable
to the Cut Back Shares. The Company shall give Rho, Xxxxx and
Maverick prompt notice of the amount of Shelf Registrable Securities excluded
from each Additional Shelf Registration Statement. Each Additional
Shelf Registration Statement shall be on Form S-3 (except if the Company is not
then eligible to register for resale the Shares on Form S-3, in which case such
registration shall be on another appropriate form in accordance with the
Securities Act and the Exchange Act).
2.2.4.
If: (i) the Shelf Registration Statement is not filed on or prior to the Filing
Deadline or (ii) the Shelf Registration Statement is not declared effective by
the Commission (or otherwise does not become effective) on or prior to the
Required Effectiveness Deadline (any such failure or breach being referred to as
an “Event,” and
the date on which such Event occurs being referred to as “Event Date”), then,
in addition to any other rights available to Rho: (x) on such Event Date the
Company shall issue to Rho warrants to purchase shares of Common Stock equal to
1% of the fully diluted outstanding shares of Common Stock for each full 30-day
period following the Filing Deadline or the Required Effectiveness Deadline (as
applicable) until such time as the Shelf Registration Statement is filed or
declared effective by the Commission (or otherwise becomes effective), as
applicable; provided
however, that such warrant issuances shall not exceed, in the aggregate,
10% of the fully diluted outstanding shares of Common Stock; provided further, however, if the Stockholder
Approval Condition shall not have been satisfied, in lieu of such warrant
issuances, the Company shall pay to Rho on such Event Date an amount in cash, as
partial liquidated damages and not as a penalty, equal to 1% of the aggregate
amount invested by Rho in the Company on each full 30-day period following the
Filing Deadline or the Required Effectiveness Deadline (as applicable) until
such time as the Shelf Registration Statement is filed or declared effective by
the Commission (or otherwise becomes effective), as applicable, up to a maximum
amount of 10% of such invested amount. If the Company fails to pay
any partial liquidated damages pursuant to this Section 2.2.4 in full within
seven days after the date payable, the Company will pay interest thereon at the
rate of 10% per annum (or such lesser amount that is permitted to be paid by
applicable law) to Rho, accruing daily from the date such partial liquidated
damages are due until such amounts, plus all such interest thereon, are paid in
full. The partial liquidated damages pursuant to the terms hereof
shall apply on a daily pro rata basis prior to
the time such Shelf Registration Statement is declared effective by the
Commission (or otherwise becomes effective).
2.2.5. In
the event that any warrants are issued pursuant to Section 2.2.4, the Company’s
Board of Directors shall adopt a resolution in accordance with the procedures
set forth in Rule 16b-3 promulgated under the Exchange Act so that the
acquisition by Rho and its affiliates (and any directors designated by Rho in
accordance with the terms of Voting Agreement) of the securities pursuant to
this Agreement shall be an exempt transaction for purposes of Section 16 of the
Exchange Act.
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2.3 Maintenance of Effectiveness
of Existing Registration Statement. The Company has on file an
effective registration statement on Form S-3 (File No. 333-136866) registering
the resale of the Existing Shelf Registrable Securities (the “Existing Holders
Registration Statement”). The Company shall use commercially
reasonable best efforts to maintain the effectiveness of the Existing Holders
Registration Statement until the earliest to occur of the following (x) all of
the Existing Shelf Registrable Securities have been disposed of by the Existing
Holders pursuant to the Existing Holder Registration Statement or otherwise, (y)
all of the Existing Holder Registrable Securities can be resold, without
registration, pursuant to Rule 144 without volume limitations or (z) the Company
is no longer a public company subject to the rules and regulations of the
Exchange Act.
2.4 Piggy-Back
Registration.
2.4.1.
Participation. If
the Company proposes to file a registration statement under the Securities Act
with respect to an underwritten offering by the Company for its own account or
for the account of any stockholder of any class of the Company’s securities
(other than a registration statement on Form S-4 or S-8 or any successor forms
thereto) (a “Piggy-Back
Registration”), then the Company shall, at such time, give prompt written
notice of such proposed filing to each of the holders of Piggy-Back Registrable
Securities, and such notice shall describe in detail the proposed registration
and distribution and shall offer such holders the opportunity to register the
number of Piggy-Back Registrable
Securities as each such holder may request. The Company shall, and shall use
commercially reasonable
best efforts (within ten (10) days of the notice provided for in the preceding
sentence) to cause the managing underwriter or underwriters of a proposed
underwritten offering (the “Company
Underwriter”) to, permit the holders of
Piggy-Back Registrable
Securities who have requested in writing (within ten (10) days of the giving of
the notice of the proposed filing by the Company) to participate in the
registration for such offering (the “Requesting
Holders”) to include such Piggy-Back
Registrable Securities in
such offering on the same terms and conditions as the securities of the Company
included therein.
2.4.2.
Priority for
Piggy-Back Registration. In connection with any Piggy-Back
Registration by the Company for its own account, the Company shall not be
required to include any Piggy-Back Registrable Securities therein unless the
holders thereof accept the terms of the underwriting as agreed upon between the
Company and the Company Underwriter. If, in the written opinion of
the Company Underwriter, the registration of all, or part, of the Piggy-Back
Registrable Securities which the Requesting Holders have requested to be
included in the Piggy-Back Registration is likely to have a significant adverse
effect on such Piggy-Back Registration, then the Company shall be required to
include in such Piggy-Back Registration only that number of Piggy-Back
Registrable Securities, if any, which the Company Underwriter believes may be
sold without causing such adverse effect, and the amount of securities to be
offered in such Piggy-Back Registration shall be (i) first, 100% of the
securities that the Company proposes to sell (ii) second, and only if all the
securities referred to in clause (i) have been included, the number of
Piggy-Back Registrable Securities that, in the opinion of the Company
Underwriter, can be sold without having such adverse effect, with such number to
be allocated pro rata among the
Requesting Holders based on the relative number of Piggy-Back Registrable
Securities then held by each such Requesting Holder. If any
Requesting Holder would thus be entitled to include more shares than such holder
requested to be registered, the excess shall be allocated among other Requesting
Holders pro
rata based upon
their total ownership of Registrable
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Securities
and such other shares of capital stock. In connection with any Demand
Registration by the Company for the account of any stockholder of any
class of the Company’s securities, the priority of the securities to be
registered for the benefit of any holder exercising its Piggy-Back Registration
rights shall be as set forth in Section 2.5.3.
2.5 Demand
Registration.
2.5.1.
Request for
Registration. At any time after the date hereof, either Rho or
Xxxxx (the “Demanding
Holders”) may make a written demand requiring the Company to effect the
registration under the Securities Act of all or part of its Demand Registrable
Securities in the form of an underwritten offering (a “Demand
Registration”), and, subject to the limitations set forth in Section
2.5.2, the Company shall be required to effect such Demand Registration pursuant
to and subject to the terms herein. Any demand for a Demand
Registration shall specify the number of Demand Registrable Securities proposed
to be sold and the intended methods of disposition thereof. Subject
to the limitations set forth in Section 2.5.2., within forty-five (45) days of a
request for a Demand Registration, the Company shall file a registration
statement relating to such Demand Registration (the “Demand Registration
Statement”), and shall use its commercially reasonable best efforts to
cause such Demand Registration Statement to be declared by the
Commission.
2.5.2.
Limitations on Demand
Registrations. The Company shall not be obligated to (i)
effect more than two (2) Demand Registrations in respect of the Demand
Registrable Securities held by Xxxxx, (ii) effect more than two (2) Demand
Registrations in respect of the Demand Registrable Securities held by Rho, (iii)
effect more than one (1) Demand Registration in any six (6) month period or (iv)
effect any Demand Registration where the aggregate price to the public of the
Demand Registrable Securities proposed to be sold is less than $10
million. The managing underwriter or underwriters of a Demand
Registration shall be a nationally recognized investment banking firm selected
by the Company with the consent of the Demanding Holders, which consent will not
be unreasonably delayed or withheld (the “Approved
Underwriter”). If Xxxxx and/or Rho participates in an offering
pursuant to Section 2.4.1, Xxxxx and/or Rho, as applicable, will be deemed to
have used one (1) of its Demand Registrations to the extent the conditions set
forth in Section 2.5.4 are satisfied and Xxxxx and/or Rho, as applicable, was
permitted by the Company Underwriter, in writing, to include in such offering at
least 50% of the Registrable Securities owned by Xxxxx and/or Rho, as
applicable, as of the date of this Agreement, or such lesser number as was
requested by Xxxxx and/or Rho to be included in such offering.
2.5.3. Priority of Securities
Registered Pursuant to Demand Registrations. If the Approved
Underwriter advises the Company in writing that in its opinion the number of
securities requested to be included in a Demand Registration exceeds the number
which can be sold in such Demand Registration without being likely to have a
significant adverse effect on such Demand Registration, the securities to be
included in such Demand Registration (i) first, shall be allocated pro rata among the
Demanding Holders who have requested to participate in such Demand Registration
based on the relative number of Demand Registrable Securities then held by each
such holder, (ii) second, and only if all the securities referred to in clause
(i) have been included, the number of securities that the Company proposes to
include in such Demand Registration that, in the opinion of the Approved
Underwriter, can be sold without having such adverse effect and (iii) next, and
only if all the securities referred to in clause (ii) have been included, the
number of Piggy-Back Registrable Securities that, in the opinion of the Company
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Underwriter,
can be sold without having such adverse effect, with such number to be allocated
pro rata among the
Requesting Holders based on the relative number of Piggy-Back Registrable
Securities then held by each such Requesting Holder.
2.5.4.
Effective
Registration. A registration will not count as a Demand
Registration until the registration statement filed with the Commission with
respect to such Demand Registration has been declared effective and the Company
has complied with all of its obligations under this Agreement with respect
thereto; provided,
however, that if, after
such registration statement has been declared effective and during the period
such registration statement is effective the offering of Demand Registrable
Securities pursuant to such Demand Registration is interfered with by any stop
order or injunction of the Commission or any other governmental agency or court,
such registration statement with respect to such Demand Registration will be
deemed not to have been declared effective, unless and until, such stop order or
injunction is removed, rescinded or otherwise terminated; provided, further, that the
Company shall not be obligated to file a second registration statement until a
registration statement that has been filed is counted as a Demand Registration
or is terminated
2.5.5. Deferral of
Registration. Notwithstanding the foregoing, if, at any time prior to the
effective date of the registration statement with respect to a Demand
Registration, the Company is (i) pursuing an underwritten offering of shares of
its capital stock for its own account, or engaged in or proposes to engage in
(A) a material financing, (B) an acquisition of the capital stock or
substantially all the assets of any other person (other than in the ordinary
course of business) or (C) any disposition of material assets (other than in the
ordinary course of business), any tender offer or any merger, consolidation,
corporate reorganization or restructuring or other similar transaction; and (ii)
the Board of Directors, using good faith, determines that it would be
detrimental to the Company for a registration statement to be filed at such
time, the Company may defer the filing of a registration statement with respect
to any Demand Registration required by this Section 2.5 until a date not later
than 120 days from the date of the Deferral Notice (as defined below) (the
“Deferral
Period”). If the Board of Directors of the Company makes such
determination, the Company shall give written notice (the “Deferral Notice”) of
such determination to the holders of Registrable Securities; provided, that, the Company
may exercise its right to delay a Demand Registration hereunder only once in any
twelve-month period. The Company shall notify the holders of the
expiration of the Deferral Period and shall cause the registration statement
with respect to the Demand Registration to be filed on the fifth business day
following the expiration of the Deferral Period (the “Withdrawal Period”)
(or, if registration on such date is not practicable, as promptly as possible
thereafter) unless, prior to the expiration of the Withdrawal Period, the
holders holding a majority of Demand Registrable Securities to be included in
any such Demand Registration, by written notice to the Company, withdraw the
request made under this Section 2.5, in which case, such request shall not count
as one of the Demand Registrations permitted hereunder and the Company shall pay
all Registration Expenses in connection with such registration.
2.6 Blackout
Period. If at any time or from time to time after the date of
effectiveness of any registration statement that the Company is required to
effect or maintain pursuant to this Section 2, the Company notifies the holders
of Registrable Securities in writing of the existence of a Potential Material
Event (as defined below), such holders shall not offer or sell any of the
Registrable Securities covered by any such registration statement, or engage in
any other transaction involving or relating to such Registrable Securities, from
the time of the giving of
11
notice
with respect to a Potential Material Event until such holder receives written
notice from the Company that such Potential Material Event either has been
disclosed to the public or no longer constitutes a Potential Material Event
(such period of time hereinafter referred to as a “Blackout
Period”). As used herein, “Potential Material
Event” means any of the following (i) the possession by the Company of
material information not ripe for disclosure in a registration statement, which
shall be evidenced by determinations in good faith by the Board of Directors of
the Company that disclosure of such information in the registration statement
would be detrimental to the business and affairs of the Company or (ii) any
material engagement or activity by the Company which would, in the good faith
determination of the Board of Directors of the Company, be adversely affected by
disclosure in a registration statement at such time, which determination shall
be accompanied by a good faith determination by the Board of Directors of the
Company that the registration statement would be materially misleading absent
the inclusion of such information. No Blackout Period shall exceed
thirty (30) consecutive days, and there shall be no more than sixty (60) days
(which need not be consecutive) during any twelve-month period in which a
Blackout Period is in effect.
3. REGISTRATION
PROCEDURES.
3.1 Obligations of the
Company. Subject to the registration procedures set forth in
Sections 2.2, 2.4 and 2.5, in connection with the Company’s registration
obligations under Section 2, the Company shall use its commercially reasonable
best efforts to effect such registration to permit the sale of such Registrable
Securities in accordance with the intended method or methods of distribution
thereof as expeditiously as reasonably practicable, and in connection therewith
the Company shall:
3.1.1.
prepare and file with the Commission a registration statement, and use its
commercially reasonable best efforts to cause such registration statement to
become effective under the Securities Act; provided, however, that
before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall (A) before the filing of such
registration statement and the prospectus included therein or any amendments or
supplements thereto, provide counsel selected by the holders of a majority of
the Registrable Securities being registered in such registration (“Holders’ Counsel”)
copies of all such documents in substantially the form proposed to be filed, to
enable the Investors and Holders’ Counsel to review such documents prior to the
filing thereof, and the Company shall make such reasonable changes thereto as
may be reasonably requested by the Investors and (B) notify the Holders’ Counsel
and each seller of Registrable Securities of any stop order issued or threatened
by the Commission and take all reasonable action required to prevent the entry
of such stop order or to remove it if entered. Notwithstanding the
foregoing, to the extent Rho Registrable Securities are included on a
registration statement, with respect to such registration statement, Rho’s
counsel shall be promptly notified about any events described, and afforded the
rights set forth, in subsections (A) and (B) hereof;
3.1.2.
prepare and file with the
Commission such amendments, including post-effective amendments, and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective and in
compliance with the provisions of the Securities Act until all Registrable
Securities and other securities covered by such Registration Statement have been
disposed of in accordance with the intended method(s) of distribution set
forth in such registration statement (which period shall not exceed ninety (90)
days (or until such earlier date on which the Company Underwriter shall
12
notify the Company that it is unable to
sell the balance of the Registrable Securities covered by such registration
statement) in the case of a registration statement filed with respect to and
used solely for an underwritten offering, and the applicable period set forth in
this Agreement in any other case;
3.1.3.
furnish to each seller of Registrable Securities, prior to filing a registration
statement, copies of such registration statement as is proposed to be filed, and
thereafter such number of copies of such registration statement, each amendment
and supplement thereto (in each case including all exhibits thereto), the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as each such seller may reasonably request
in order to facilitate the disposition of the Registrable Securities owned by
such seller;
3.1.4. cause
its counsel to issue to the Company’s transfer agent, within two business days
of the effectiveness date of a registration statement with respect to any of the
Registrable Securities, an appropriate opinion or opinions (or a letter from the
Company acceptable to the transfer agent) substantially to the effect that the
Registrable Securities covered by such registration statement are subject to an
effective registration statement and can be reissued free of restrictive legend,
provided that the Company has not advised the transfer agent orally or in
writing that the opinion has been withdrawn;
3.1.5. use
reasonable efforts to register or qualify such Registrable Securities under such
other securities or blue sky laws of such jurisdictions as any seller of
Registrable Securities requests, and to continue such qualification in effect in
such jurisdiction for as long as is permissible pursuant to the laws of such
jurisdiction, or for as long as any such seller requests or until all of such
Registrable Securities are sold, whichever is shortest, and do any and all other
acts and things which may be reasonably necessary or advisable to enable any
such seller to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller; provided, however, that the
Company shall not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3.1.4, (B) subject itself to taxation in any such jurisdiction or (C)
consent to general service of process in any such jurisdiction;
3.1.6. use
reasonable efforts to cause the Registrable Securities covered by such
registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the seller or sellers of
Registrable Securities to consummate the disposition of such Registrable
Securities;
3.1.7. notify
each seller of Registrable Securities at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon discovery
that, or upon the happening of any event as a result of which, the prospectus
included in such registration statement contains an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made, and the Company shall promptly prepare
a supplement or amendment to such prospectus and furnish to each seller a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, after delivery to the purchasers of such
Registrable Securities, such prospectus shall not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
13
or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made;
3.1.8. enter
into and perform customary agreements (including an underwriting agreement in
customary form with the underwriter, if any, selected as provided herein) and
take such other actions as are reasonably required in order to facilitate the
disposition of such Registrable Securities;
3.1.9.
make available for inspection by any seller of Registrable Securities, any
managing underwriter participating in any disposition pursuant to such
registration statement, Holders’ Counsel and any attorney, accountant or other
agent retained by any such seller or any managing underwriter (each, an “Inspector” and
collectively, the “Inspectors”), during
regular business hours and upon reasonable advance notice, all financial and
other records, pertinent corporate documents and properties of the Company
(collectively, the “Records”) as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees, and
the independent public accountants of the Company, to supply all information
reasonably requested by any such Inspector in connection with such registration
statement;
3.1.10.
if such sale is pursuant to an underwritten offering, obtain a “cold comfort”
letter from the Company’s independent public accountants in customary form and
covering such matters of the type customarily covered by “cold comfort” letters
as Holders’ Counsel or the managing underwriter reasonably
requests;
3.1.11.
furnish, at the request of any seller of Registrable Securities on the date such
securities are delivered to the underwriters for sale pursuant to such
registration or, if such securities are not being sold through underwriters, on
the date the registration statement with respect to such securities becomes
effective, an opinion, dated such date, of counsel representing the Company for
the purposes of such registration, addressed to the underwriters, if any, and to
the seller making such request, covering such legal matters with respect to the
registration in respect of which such opinion is being given as such seller may
reasonably request and are customarily included in such opinions;
3.1.12.
cause all such Registrable Securities to be listed on each securities exchange
on which similar securities issued by the Company are then listed, provided,
that the applicable listing requirements are satisfied;
3.1.13.
cooperate with each seller of Registrable Securities and each underwriter
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
Financial Industry Regulatory
Authority (“FINRA”);
3.1.14.
promptly notify each Investor whose shares of Common Stock are covered by such
registration statement, and promptly confirm such notice in writing, if such
notice was verbally given, (A) when the registration statement covering the
Registrable Securities has become effective and when any post effective
amendments thereto have become effective, (B) of the receipt of any comments
from the Commission with respect to any such document or a document incorporated
by reference therein, and (C) of any request by the Commission or any other
federal or state securities authority for amendments or supplements to the
registration
14
statement
or a prospectus or for additional information after the registration statement
has become effective, and
3.1.15.
use reasonable efforts to take all other steps necessary to effect the
registration of the Registrable Securities contemplated hereby.
3.2 Notice to
Discontinue. Each holder of Registrable Securities agrees that, upon
receipt of any written notice from the Company of the happening of any event of
the kind described in Section 3.1.7, such holder shall forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such holder’s receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3.1.7 and, if
so directed by the Company, such holder shall deliver to the Company (at the
Company’s expense) all copies, other than permanent file copies then in such
holder’s possession, of the prospectus covering such Registrable Securities
which is current at the time of receipt of such notice. If the Company shall
give any such notice, the Company shall extend the period during which such
registration statement shall be maintained effective pursuant to this Agreement
(including without limitation the period referred to in Section 3.1.2) by the
number of days during the period from and including the date of the giving of
such notice pursuant to Section 3.1.7 to and including the date when the holder
shall have received the copies of the supplemented or amended prospectus
contemplated by and meeting the requirements of Section 3.1.7.
3.3 Registration
Expenses. The Company shall pay all expenses (other than underwriting
discounts and commissions) arising from or incident to the Company’s performance
of, or compliance with, this Agreement, including without limitation, (i)
Commission, stock exchange, NASDAQ and FINRA registration and filing fees, (ii)
all fees and expenses incurred by Company in complying with securities or blue
sky laws (including reasonable fees, charges and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities), (iii)
all printing, messenger and delivery expenses, and (iv) the fees, charges and
disbursements of counsel to the Company and of its independent public
accountants and any other accounting and legal fees, charges and expenses
incurred by the Company (including without limitation any expenses arising from
any special audits incident to or required by any registration or qualification)
in connection with any Demand Registration pursuant to the terms of this
Agreement, regardless of whether such registration statement is declared
effective. All of the expenses described in this Section 3.3 are referred to
herein as “Registration
Expenses.”
4. INDEMNIFICATION AND
CONTRIBUTION.
4.1 Indemnification by the
Company. To the fullest extent permitted by law, the Company
will indemnify each holder of Registrable Securities, each of its officers,
directors, agents, partners, members, stockholders and employees of each such
Person, and each Person, if any, who controls such holder within the meaning of
the Securities Act or Exchange Act, with respect to each registration which has
been effected pursuant to this Agreement against all claims, losses, damages and
liabilities, including, without limitation, fees and other expenses reasonably
incurred in connection with any investigation relating to, or defending, any
such claims, losses, damages and liabilities (or actions in respect thereof),
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any registration statement filed with the
Commission in connection with such registration, including any
15
preliminary
prospectus or final prospectus contained therein, any amendments or supplements
thereto or any “issuer free writing prospectus” (as defined in Rule 433 under
the Securities Act) related thereto, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission based solely upon written information regarding such
holder furnished to the Company by such holder expressly for use in such
registration statement.
4.2 Indemnification by the
Investors. To the fullest extent permitted by law, each of the
holders of Registrable Securities will, if Registrable Securities held by it are
included in the securities as to which any registration pursuant to this
Agreement is being effected, severally and not jointly indemnify the Company,
each of its directors and officers, each Person who controls the Company within
the meaning of the Securities Act or the Exchange Act, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement filed in connection with such
registration, including any preliminary prospectus or final prospectus contained
therein, any amendments or supplements thereto or any “issuer free writing
prospectus” related thereto, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements by such holder therein not misleading, and will reimburse the
Company, its directors and officers and Persons who control the company for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is actually made in such
registration statement, including any preliminary or final prospectus contained
therein, any amendments or supplements thereto or any “issuer free writing
prospectus” related thereto, in reliance upon and in conformity with written
information regarding such holder furnished to the Company by such holder
expressly for use in such registration statement. Notwithstanding the
provisions of this Section 4.2, the liability of each Investor (including any
transferee of the registration rights) under this Section 4.2 shall not exceed
the net proceeds actually received by such Investor in connection with any sale
of the Registrable Securities.
4.3 Conduct of Indemnification
Proceedings. Any Person entitled to indemnification hereunder
(the “Indemnified
Party”) agrees to give prompt written notice to the indemnifying party
(the “Indemnifying
Party”) after the receipt by the Indemnified Party of any written notice
of the commencement of any action, suit, proceeding or investigation or threat
thereof made in writing for which the Indemnified Party intends to claim
indemnification or contribution pursuant to this Agreement; provided, that the
failure so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of any liability that it may have to the Indemnified Party hereunder
unless, and only to the extent that, such failure results in the Indemnifying
Party’s forfeiture of substantial rights or defenses. If notice of commencement
of any such action is given to the Indemnifying Party as above provided, the
Indemnifying Party shall be entitled, after written notice to the Indemnified
Party, to participate in and, to the extent it may wish, jointly with any other
Indemnifying Party similarly notified, to assume the defense of such action at
its own expense, with counsel chosen by it and reasonably satisfactory to such
Indemnified Party. The Indemnified Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel (other than
16
reasonable
costs of investigation) shall be paid by the Indemnified Party unless
(i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party
fails to assume the defense of such action within a reasonable period of time
and with counsel satisfactory to the Indemnified Party in its reasonable
judgment, (iii) the Indemnified Party to any such action (including any
impleaded parties) have been advised by such counsel that either (A)
representation of such Indemnified Party and the Indemnifying Party by the same
counsel would be inappropriate under applicable standards of professional
conduct or (B) there may be one or more legal defenses available to the
Indemnified Party which are different from or additional to those available to
the Indemnifying Party. No Indemnifying Party shall, without the
prior written consent of each Indemnified Party, settle, compromise or consent
to the entry of any judgment unless such settlement, compromise or consent
includes an unconditional release of the Indemnified Party from all liability
relating thereto. All fees and expenses required to be paid to the
Indemnified Party pursuant to this Section 4.3 shall be advanced periodically
during the course of the Indemnified Party’s investigation or defense; provided, however, that the
obligations of any Indemnified Party to advance fees and expenses to an
Indemnified Party shall be subject to the receipt by such Indemnified Party of
an undertaking by or on behalf of the Indemnified Party to repay the amounts so
advanced if (and to the extent) it is subsequently determined that the
Indemnified Party is not entitled to indemnification with respect to such
investigation or defense. In either of such cases the Indemnifying
Party shall not have the right to assume the defense of such action on behalf of
such Indemnified Party. No Indemnifying Party shall be liable for any
settlement entered into without its written consent, which consent shall not be
unreasonably withheld, conditioned or delayed.
4.4 Contribution. If the
indemnification provided for in this Section 4 from the Indemnifying Party is
applicable by its terms but unavailable to an Indemnified Party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall severally and not jointly contribute to the amount paid
or payable by such Indemnified Party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
faults of such Indemnifying Party and Indemnified Party shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Party, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Sections 4.1, 4.2,
4.3, any legal or other fees, charges or expenses reasonably incurred by such
party in connection with any investigation or proceeding. The parties
hereto agree that it would not be just and equitable if contribution pursuant to
this Section 4.4 were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. Notwithstanding
the provisions of this Section 4, no Investor (including any transferee of the
registration rights) shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the net proceeds actually received by
such Investor from the sale of the Registrable Securities subject to the claim,
loss, damage, liability or action exceeds the amount of any damages that such
Investor has otherwise been
17
required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person.
5. UNDERWRITING AND
DISTRIBUTION.
5.1 Rule
144. The Company covenants that for so long as it is a public
company subject to the rules and regulations of the Exchange Act, it shall take
such action as each holder of Registrable Securities may reasonably request
(including providing any information necessary to comply with Rules 144 under
the Securities Act), all to the extent required from time to time to enable such
holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such rules may be amended from time to time, or (b) any
similar rules or regulations hereafter adopted by the Commission. The
Company shall, upon the request of any holder of Registrable Securities, deliver
to such holder a written statement as to whether the Company has complied with
such requirements.
5.2 Holdback
Agreements.
5.2.1.
Restrictions on Public
Sale by Holders of Registrable Securities. To the extent not inconsistent
with applicable law, and provided that all of the Company’s executive officers,
directors and, to the extent they are parties to this Agreement, holders of five
percent or more of the outstanding capital stock of the Company enter into
substantially similar agreements, the Investors agree that, in connection with a
registered public offering of the Company’s equity securities, they will not
effect any public sale or distribution of any Registrable Securities or of any
securities convertible into or exchangeable or exercisable for such Registrable
Securities, including a sale pursuant to Rule 144 under the Securities Act,
during the 90 days beginning on, the effective date of the Company’s
registration statement (except as part of such registration), if and to the
extent reasonably requested by the Company in writing in the case of a
non-underwritten public offering or to the extent reasonably requested by the
Company Underwriter or Approved Underwriter in writing in the case of an
underwritten public offering.
5.2.2.
Restrictions on Public
Sale by the Company. The Company agrees not to effect any public sale or
distribution of any of its equity securities, or any securities convertible into
or exchangeable or exercisable for such equity securities (except pursuant to
registrations on Forms S-4 or S-8 of the Securities Act or any successor or
other forms not available for registering equity securities for sale to the
public) during the ten business days prior to, and during the 30 day period
beginning on the effective date of any registration statement in which the
holders of Registrable Securities are participating unless such registration
statement also relates to securities being offered by the Company. In
addition, the Company agrees not to file, without the consent of Rho, any
registration statement for an underwritten offering of its securities until a
Shelf Registration Statement or one or more Additional Shelf Registration
Statements covering all of the Rho Registrable Securities has been declared
effective by the SEC.
6. MISCELLANEOUS.
6.1 Term. This
Agreement shall terminate with respect to each Investor on the date such
Investor no longer owns any Registrable Securities. For the avoidance
of doubt, this
18
Agreement
shall continue to remain in effect with respect to any other Investor that
continues to own Registrable Securities. The provisions of Section 4
and Section 5.1 shall survive any termination.
6.2 Assignment; Binding
Effect. This Agreement and the rights, duties and obligations
of each Investor hereunder may be assigned (in whole or in part) by such
Investor to transferees or assignees of all or any portion of its Registrable
Securities, but only if (i) the such Investor (or subsequent transferor) agrees
in writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment, (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being transferred or assigned, (iii) at or before the
time the Company received the written notice contemplated by clause (ii) of this
sentence, the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained in this Agreement, (iv) the transferee
is an “accredited investor” as that term is defined in Rule 501 of Regulation D
and (v) insofar as any assignment covers the Demand Registration Rights, the
transferee or assignee is acquiring at least 50% of the Registrable Securities
owned by such Investor and its Affiliates immediately prior to such transfer and
such Investor and its transferee or assignee allocate the Demand Registration
Rights between them so as not to increase the number of unused Demand
Registrations available to such Investor and its Affiliates in effect
immediately prior to such transfer. This Agreement and the provisions
hereof shall be binding upon and shall inure to the benefit of each of the
parties and their respective successors.
6.3 Notices. All
notices and other communications required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given (a) on
the date of delivery, if delivered personally or by facsimile, upon confirmation
of receipt, (b) on the first business day following the date of dispatch if
delivered by a recognized next-day courier services, or (c) on the third
business day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid, to the parties to
this Agreement at the following address or to such other address either party to
this Agreement shall specify by notice to the other party:
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If
to the Company:
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Bluefly,
Inc.
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00
Xxxx 00xx Xxxxxx
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Xxx Xxxx, Xxx Xxxx
00000
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Telephone
No.: (000) 000-0000
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Facsimile
No.: (000) 000-0000
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Attention: Chief
Financial Officer
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With a
copy to (which shall not constitute notice):
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Dechert
LLP
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0000
Xxxxxx xx xxx Xxxxxxxx
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Xxx
Xxxx, XX 00000
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Telephone
No.: (000) 000 0000
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Facsimile
No.: (212 698 3599
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Attention: Xxxxxxx
X. Xxxxxxxx, Esq.
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19
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If
to Xxxxx:
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Quantum
Industrial Partners LDC
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SFM
Domestic Investments LLC
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c/x
Xxxxx Fund Management LLC
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000
Xxxxxxx Xxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Telephone
No.: (000) 000-0000
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Facsimile
No.: (000) 000-0000
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|
Attention: Xxx
Xxxxxxxxxxxx
|
|
|
If
to Maverick:
|
Maverick
Fund USA, Ltd.
|
|
|
Maverick
Fund, L.D.C.
|
|
|
Maverick
Fund II, Ltd.
|
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|
c/o
Maverick Capital, Ltd.
|
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000
Xxxxxxxx Xxxxx, 00xx Xxxxx
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Xxxxxx,
Xxxxx 00000
|
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|
Telephone
No.: (000) 000-0000
|
|
|
Facsimile
No.: (000) 000-0000
|
|
|
Attention: General
Counsel
|
|
|
With
a copy to (which shall not constitute
notice):
|
|
|
Shearman
& Sterling, LLP
|
|
|
000
Xxxxxxxxx Xxxxxx
|
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|
Xxx
Xxxx, Xxx Xxxx 00000
|
|
|
Telephone
No.: (000) 000-0000
|
|
|
Facsimile
No.: (000) 000-0000
|
|
|
Attention: Xxxxxxx
X. Xxxxx
|
|
|
If
to Prentice:
|
Prentice
Capital Management, L.P.
|
|
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000
Xxxxx Xxxxxx, 00xx Xxxxx
|
|
|
Xxx Xxxx, XX
00000
|
|
|
Facsimile
No.: (000) 000-0000
|
|
|
Attention: Xxxxxxx
Xxxxxxxxx
|
|
|
With
a copy to (which shall not constitute
notice):
|
|
|
Xxxxxxxxxx
Xxxxxxx PC
|
|
|
0000
Xxxxxx xx xxx Xxxxxxxx
|
|
|
Xxx
Xxxx, XX 00000
|
|
|
Facsimile
No.: (000) 000-0000
|
|
|
Attention: Xxxxxxx
X. Xxxxxxx
|
|
|
If
to Rho:
|
Rho
Ventures VI, X.X.
|
Xxxxxxxx
Hall Tower
000 Xxxx
00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
20
Telephone
No.: (000)
000-0000
Facsimile
No.: (212.751.3613
Attention: Xxxxxxx
X. Xxxxxx, Esq.
|
|
With
a copy to (which shall not constitute
notice):
|
|
|
Xxxxxxx
Procter LLP
|
|
|
The
New York Times Building
|
|
|
000
Xxxxxx Xxxxxx
|
|
|
Xxx
Xxxx, Xxx Xxxx
|
|
|
Telephone
No.: (000) 000-0000
|
|
|
Facsimile
No.: (000) 000-0000
|
|
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Attention: Xxxxxxx
X. Xxxxx, Esq.
|
6.4 Severability. If
one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be deemed to be excluded from this
Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforced in accordance with its terms to
the maximum extent permitted by applicable law.
6.5 Counterparts. This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, and all of which taken together shall constitute one and the
same instrument.
6.6 Entire
Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings, both oral and written,
between the parties and/or their affiliates with respect to the subject matter
of this Agreement.
6.7 Modifications and
Amendments. Any provision of this Agreement may be amended or
modified if, but only if, such amendment or modification is in writing and is
duly executed and delivered by the Company and the Investors.
6.8 Titles and
Headings. Titles and headings of sections of this Agreement
are for convenience only and shall not affect the construction of any provision
of this Agreement.
6.9 Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. The parties hereto
agree that any suit, action or proceeding seeking to enforce any provision of,
or based on any matter arising out of or in connection with, this Agreement or
the transactions contemplated hereby may only be brought in the United States
District Court for the Southern District of New York or any New York State court
sitting in the Borough of Manhattan in New York City, and each of the parties
hereby consents to the jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding and
irrevocably waives, to the fullest extent permitted by Law (as defined in the
Investment Agreement), any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient forum. Process in any such suit,
action or
21
proceeding
may be served on any party anywhere in the world, whether within or without the
jurisdiction of any such court.
6.10Waiver of Trial by
Jury. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
22
IN
WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to
be executed and delivered by their duly authorized representatives as of the
date first written above.
|
BLUEFLY,
INC.
By: /s/ Xxxx X.
Xxxxx
Name: Xxxx
X. Xxxxx
Title: Chief
Financial Officer
QUANTUM
INDUSTRIAL PARTNERS LDC
By: /s/ Xxx X.
Xxxxxxxxxxxx
Name: Xxx
X. Xxxxxxxxxxxx
Title: Attorney-in-fact
SFM
DOMESTIC INVESTMENTS LLC
By: /s/ Xxx X.
Xxxxxxxxxxxx
Name: Xxx
X. Xxxxxxxxxxxx
Title: Attorney-in-fact
|
|
|
MAVERICK
FUND USA, LTD
By:
MAVERICK CAPITAL, LTD.,
as
its Investment Manager
By: /s/ Xxxx X.
XxXxxxxxxx
Name: Xxxx
X. XxXxxxxxxx
Title: Limited
Partner and General Counsel
MAVERICK
FUND L.D.C.
By:
MAVERICK CAPITAL, LTD.,
as
its Investment Manager
By: /s/ Xxxx X.
XxXxxxxxxx
Name: Xxxx
X. XxXxxxxxxx
Title: Limited
Partner and General Counsel
MAVERICK
FUND II, LTD
By:
MAVERICK CAPITAL, LTD.,
as
its Investment Manager
By: /s/ Xxxx X.
XxXxxxxxxx
Name: Xxxx
X. XxXxxxxxxx
Title: Limited
Partner and General Counsel
|
|
|
PRENTICE
CAPITAL PARTNERS, LP
By:
Prentice Capital GP, LLC
By: /s/ Xxxxxxx
Xxxxxxx
Name:
Xxxxxxx Xxxxxxx
Title:
PRENTICE
CAPITAL PARTNERS QP, LP
By:
Prentice Capital GP, LLC
By: /s/ Xxxxxxx
Xxxxxxx
Name:
Xxxxxxx Xxxxxxx
Title:
PRENTICE
CAPITAL OFFSHORE, LTD.
By:
Prentice Capital Management, LP
By: /s/ Xxxxxxx
Xxxxxxx
Name:
Xxxxxxx Xxxxxxx
Title:
GPC
XLIII, LLC
By:
Prentice Capital Management, LP
By: /s/ Xxxxxxx
Xxxxxxx
Name:
Xxxxxxx Xxxxxxx
Title:
PEC
I, LLC
By:
Prentice Capital Management, LP
By: /s/ Xxxxxxx
Xxxxxxx
Name:
Xxxxxxx Xxxxxxx
Title:
|
|
|
S.A.C.
CAPITAL ASSOCIATES, LLC
By:
S.A.C. Capital Advisors, LLC
By: /s/ Xxxxx X.
Xxxxxxxx
Name: Xxxxx
X. Xxxxxxxx
Title: General
Counsel
RHO
VENTURES VI, L.P.
By: /s/ Xxxxx
Xxxxxxx
Name: Xxxxx
Xxxxxxx
Title: Managing
Member
|
|
