Exhibit 10.21
THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE (TOGETHER, THE
"SECURITIES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION UNDER THE ACT OR IN A TRANSACTION WHICH QUALIFIES AS AN EXEMPT
TRANSACTION UNDER THE ACT AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
IN ADDITION, THE SECURITIES ARE SUBJECT TO CERTAIN TRANSFER RESTRICTIONS UNDER
THE CERTIFICATE OF INCORPORATION AND BYLAWS OF THE COMPANY.
Date: May __, 1999
Internet Capital Group, Inc.
Common Stock Purchase Warrant
Internet Capital Group, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for value received, _________________ (the "holder"), or
assigns, is entitled, subject to the terms set forth below, to purchase from the
Company, at any time and from time to time during the period beginning on the
earlier of (a) the effective date of the registration statement for an
underwritten public offering (a "Public Offering") of the Company's common
stock, par value $.001 per share, and (b) the closing date of the next round of
equity financing in the Company raising not less than $50,000,000 from private
investors (the "Next Round Financing") and ending on May , 2002, an
aggregate number of fully paid and non-assessable shares of the common stock,
par value $.001 per share, of the Company at the "Purchase Price" (as
hereinafter defined), subject to the provisions of Paragraph 3 hereof,
determined by a fraction, the numerator of which is two-tenths (.2) multiplied
by _______ [the principal balance of the Convertible Note], and the denominator
of which is the Purchase Price. "Purchase Price" shall mean the price per share
paid for shares of common stock, par value $.001 per share, of the Company in
either of the transactions specified in clauses (a) and (b) above (before
underwriting discounts and commissions). "Common Stock" shall mean, unless the
context otherwise requires, the stock or other securities or property at the
time deliverable upon the exercise of this Warrant. Notwithstanding the
foregoing, the Purchase Price and the number and character of shares issuable
under this Warrant are subject to adjustment as set forth in Paragraph 3. This
Warrant is herein called the "Warrant."
1. EXERCISE OF WARRANT. The purchase rights evidenced by this Warrant
shall be exercised by the holder hereof by surrendering this Warrant, with the
form of subscription at the end hereof duly executed by such holder, to the
Company at its office at 800 The Safeguard Building, 000 Xxxxx Xxxx Xxxxx,
Xxxxx, Xxxxxxxxxxxx 00000, or such other address as the Company may specify by
written notice to the registered holder hereof, accompanied by payment, in cash,
by certified or official bank check or by wire transfer of an amount equal to
the Purchase Price multiplied by the number of shares being purchased pursuant
to such exercise of the Warrant.
1.1. Partial Exercise. This Warrant may be exercised for less than
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the full number of shares of Common Stock, in which case the number of shares
receivable upon the exercise of this Warrant as a whole, and the sum payable
upon the exercise of this Warrant as a whole, shall be proportionately reduced.
Upon any such partial exercise, the Company at its expense will forthwith issue
to the holder hereof a new Warrant or Warrants of like tenor calling for the
number of shares of Common Stock as to which rights have not been exercised,
such Warrant or Warrants to be issued in the name of the holder hereof or his
nominee (upon payment by such holder of any applicable transfer taxes).
1.2. Net Issue Exercise.
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(1) In lieu of exercising this Warrant, holder may elect to
receive shares equal to the value of this Warrant (or the portion thereof being
canceled) by surrender of this Warrant at the principal office of the Company
together with notice of such election in which event the Company shall issue to
holder that number of shares of the Company's Common Stock computed using the
following formula:
Y(A-B)
X=------
A
Where
X. the number of shares of Common Stock to be issued to Holder.
Y. the number of shares of Common Stock purchasable under this
Warrant
A the fair market value of one share of the Company's Common
Stock.
B the Purchase Price (as adjusted to the date of such
calculations).
(2) For purposes of this Section, the fair market value of one
share of the Company's Common Stock shall be based on the average of the closing
bid and asked prices of the Over-the-Counter Market Summary or the closing price
quoted in the Over-The-Counter Market Summary or the closing price quoted on any
exchange on which the Common Stock is listed, whichever is applicable, as
published in the Eastern Edition of The Wall Street Journal for the ten trading
days prior to the date of determination of fair market value. If the Common
Stock is not traded Over-The-Counter or on an exchange, the fair market value of
the Company's Common Stock shall be the price per share which the Company could
obtain from a willing buyer for shares sold by the Company from authorized but
unissued shares, as such price shall be agreed by the Company and the holder.
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable
after the exercise of this Warrant and payment of the Purchase Price, and in any
event within ten (10) days thereafter, the Company, at its expense, will cause
to be issued in the name
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of and delivered to the holder hereof a certificate or certificates for the
number of fully paid and non-assessable shares or other securities or property
to which such holder shall be entitled upon such exercise, plus, in lieu of any
fractional share to which such holder would otherwise be entitled, cash in an
amount determined in accordance with Paragraph 3.9 hereof. The Company agrees
that the shares so purchased shall be deemed to be issued to the holder hereof
as the record owner of such shares as of the close of business on the date on
which this Warrant shall have been surrendered and payment made for such shares
as aforesaid.
3. ANTI-DILUTION PROVISIONS AND OTHER ADJUSTMENTS. In order to prevent
dilution of the right granted hereunder, the Purchase Price shall be subject to
adjustment from time to time in accordance with this Paragraph 3. Upon each
adjustment of the Purchase Price pursuant to this Paragraph 3, the registered
Holder of this Warrant shall thereafter be entitled to acquire upon exercise, at
the Purchase Price resulting from such adjustment, the number of shares of the
Company's Common Stock obtainable by multiplying the Purchase Price in effect
immediately prior to such adjustment by the number of shares of the Company's
Common Stock acquirable immediately prior to such adjustment and dividing the
product thereof by the Purchase Price resulting from such adjustment.
3.1. Adjustment for Issue or Sale of Common Stock at Less than
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Purchase Price. Except as provided in Paragraph 3.2 or 3.5 below, if and
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whenever on or after the date of issuance hereof the Company shall issue or
sell, or shall in accordance with subparagraphs 3.1(1) to (9), inclusive, be
deemed to have issued or sold, any shares of its Common Stock for a
consideration per share less than the Purchase Price in effect immediately prior
to the time of such issue or sale, then forthwith upon such issue or sale (the
"Triggering Transaction"), the Purchase Price shall, subject to subparagraphs
(1) to (9) of this Paragraph 3.1, be reduced to the Purchase Price (calculated
to the nearest tenth of a cent) determined by dividing:
(i) an amount equal to the sum of (x) the product derived by
multiplying the Number of Common Shares Deemed Outstanding immediately
prior to such Triggering Transaction by the Purchase Price then in effect,
plus (y) the consideration, if any, received by the Company upon
consummation of such Triggering Transaction, by
(ii) an amount equal to the sum of (x) the Number of Common
Shares Deemed Outstanding immediately prior to such Triggering Transaction
plus (y) the number of shares of Common Stock issued (or deemed to be
issued in accordance with subparagraphs 3.1(1) to (9)) in connection with
the Triggering Transaction.
For purposes of this Paragraph 3, the term "Number of Common Shares
Deemed Outstanding" at any given time shall mean the sum of (i) the number of
shares of the Company's Common Stock outstanding at such time, and (ii) the
number of shares of the Company's Common Stock deemed to be outstanding under
subparagraphs 3.1(1) to (9), inclusive, at such time.
For purposes of determining the adjusted Purchase Price under this
Paragraph 3.1,
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the following subsections (1) to (9), inclusive, shall be applicable:
(1) In case the Company at any time shall in any manner grant (whether
directly or by assumption in a merger or otherwise) any rights to subscribe
for or to purchase, or any options for the purchase of, Common Stock or any
stock or other securities convertible into or exchangeable for Common Stock
(such rights or options being herein called "Options" and such convertible
or exchangeable stock or securities being herein called "Convertible
Securities"), whether or not such Options or the right to convert or
exchange any such Convertible Securities are immediately exercisable and
the price per share for which the Common Stock is issuable upon exercise,
conversion or exchange (determined by dividing (x) the total amount, if
any, received or receivable by the Company as consideration for the
granting of such Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of all such Options,
plus, in the case of such Options which relate to Convertible Securities,
the minimum aggregate amount of additional consideration, if any, payable
upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (y) the total maximum number of shares
of Common Stock issuable upon the exercise of such Options or the
conversion or exchange of such Convertible Securities) shall be less than
the Purchase Price in effect immediately prior to the time of the granting
of such Option, then the total maximum amount of Common Stock issuable upon
the exercise of such Options, or, in the case of Options for Convertible
Securities, upon the conversion or exchange of such Convertible Securities,
shall (as of the date of granting of such Options) be deemed to be
outstanding and to have been issued and sold by the Company for such price
per share. No adjustment of the Purchase Price shall be made upon the
actual issue of such shares of Common Stock or such Convertible Securities
upon the exercise of such Options, except as otherwise provided in
subparagraph (3) below.
(2) In case the Company at any time shall in any manner issue (whether
directly or by assumption in a merger or otherwise) or sell any Convertible
Securities, whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for which Common Stock is
issuable upon such conversion or exchange (determined by dividing (x) the
total amount received or receivable by the Company as consideration for the
issue or sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (y) the total maximum number of shares
of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Purchase Price in effect
immediately prior to the time of such issue or sale, then the total maximum
number of shares of Common Stock issuable upon conversion or exchange of
all such Convertible Securities shall (as of the date of the issue or sale
of such Convertible Securities) be deemed to be outstanding and to have
been issued and sold by the Company for such price per share. No adjustment
of the Purchase Price shall be made upon the actual issue of such Common
Stock upon exercise of the rights to exchange or convert under such
Convertible Securities, except as
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otherwise provided in subparagraph (3) below.
(3) If the purchase price provided for in any Options referred to in
subparagraph (1), the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in
subparagraphs (1) or (2), or the rate at which any Convertible Securities
referred to in subparagraph (1) or (2) are convertible into or exchangeable
for Common Stock shall change at any time (other than under or by reason of
provisions designed to protect against dilution of the type set forth in
Paragraph 3.1 or 3.3), the Purchase Price in effect at the time of such
change shall forthwith be readjusted to the Purchase Price which would have
been in effect at such time had such Options or Convertible Securities
still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time initially
granted, issued or sold. If the purchase price provided for in any Option
referred to in subparagraph (1) or the rate at which any Convertible
Securities referred to in subparagraphs (1) or (2) are convertible into or
exchangeable for Common Stock, shall be reduced at any time under or by
reason of provisions with respect thereto designed to protect against
dilution, then in case of the delivery of Common Stock upon the exercise of
any such Option or upon conversion or exchange of any such Convertible
Security, the Purchase Price then in effect hereunder shall forthwith be
adjusted to such respective amount as would have been obtained had such
Option or Convertible Security never been issued as to such Common Stock
and had adjustments been made upon the issuance of the shares of Common
Stock delivered as aforesaid, but only if as a result of such adjustment
the Purchase Price then in effect hereunder is hereby reduced.
(4) On the expiration of any Option or the termination of any right to
convert or exchange any Convertible Securities, the Purchase Price then in
effect hereunder shall forthwith be increased to the Purchase Price which
would have been in effect at the time of such expiration or termination had
such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination, never been issued.
(5) In case any Options shall be issued in connection with the issue
or sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to
such Options by the parties thereto, such Options shall be deemed to have
been issued without consideration.
(6) In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold or deemed to have been issued or sold
for cash, the consideration received therefor shall be deemed to be the
amount received by the Company therefor. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for a
consideration other than cash, the amount of the consideration other than
cash received by the Company shall be the fair value of such consideration
as determined in good faith by the Board of Directors of the Company. In
case any shares of Common Stock, Options or Convertible Securities shall be
issued in connection with any merger in which the Company is the surviving
corporation, the amount of consideration therefor
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shall be deemed to be the fair value of such portion of the net assets and
business of the non-surviving corporation as shall be attributed by the
Board of Directors of the Company in good faith to such Common Stock,
Options or Convertible Securities, as the case may be.
(7) The number of shares of Common Stock outstanding at any given time
shall not include shares owned or held by or for the account of the
Company, and the disposition of any shares so owned or held shall be
considered an issue or sale of Common Stock for the purpose of this
Paragraph 3.1.
(8) In case the Company shall declare a dividend or make any other
distribution upon the stock of the Company payable in Common Stock,
Options, or Convertible Securities, then in such case any Common Stock,
Options or Convertible Securities, as the case may be, issuable in payment
of such dividend or distribution shall be deemed to have been issued or
sold without consideration.
(9) For purposes of this Paragraph 3.1, in case the Company shall take
a record of the holders of its Common Stock for the purpose of entitling
them (x) to receive a dividend or other distribution payable in Common
Stock, Options or in Convertible Securities, or (y) to subscribe for or
purchase Common Stock, Options or Convertible Securities, then such record
date shall be deemed to be the date of the issue or sale of the shares of
Common Stock deemed to have been issued or sold upon the declaration of
such dividend or the making of such other distribution or the date of the
granting of such right or subscription or purchase, as the case may be.
3.2. Dividends Not Paid Out of Earnings or Earned Surplus. In the
----------------------------------------------------
event the Company shall declare a dividend upon the Common Stock (other than a
dividend payable in Common Stock covered by subparagraph 3.1(8)) payable
otherwise than out of earnings or earned surplus, determined in accordance with
generally accepted accounting principles, including the making of appropriate
deductions for minority interests, if any, in subsidiaries (herein referred to
as "Liquidating Dividends"), then, as soon as possible after the exercise of
this Warrant, the Company shall pay to the person exercising such Warrant an
amount equal to the aggregate value at the time of such exercise of all
Liquidating Dividends (including but not limited to the Common Stock which would
have been issued at the time of such earlier exercise and all other securities
which would have been issued with respect to such Common Stock by reason of
stock splits, stock dividends, mergers or reorganizations, or for any other
reason). For the purposes of this Paragraph 3.2, a dividend other than in cash
shall be considered payable out of earnings or earned surplus only to the extent
that such earnings or earned surplus are charged an amount equal to the fair
value of such dividend as determined in good faith by the Board of Directors of
the Company.
3.3. Subdivisions and Combinations. In case the Company shall at any
---- -----------------------------
time subdivide (other than by means of a dividend payable in Common Stock
covered by subparagraph 3.1(8)) its outstanding shares of Common Stock into a
greater number of shares, the Purchase Price in effect immediately prior to such
subdivision shall be proportionately
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reduced, and, conversely, in case the outstanding shares of Common Stock of the
Company shall be combined into a smaller number of shares, the Purchase Price in
effect immediately prior to such combination shall be proportionately increased.
3.4. Reorganization, Reclassification, Consolidation, Merger or Sale
---------------------------------------------------------------
of Assets. If any capital reorganization or reclassification of the capital
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stock of the Company, or consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities, cash or other property with respect to
or in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the holder of this Warrant shall have the right to acquire
and receive upon exercise of this Warrant such shares of stock, securities, cash
or other property issuable or payable (as part of the reorganization,
reclassification, consolidation, merger or sale) with respect to or in exchange
for such number of outstanding shares of the Company's Common Stock as would
have been received upon exercise of this Warrant at the Purchase Price then in
effect. The Company will not effect any such consolidation, merger or sale
unless, prior to the consummation thereof, the successor corporation (if other
than the Company) resulting from such consolidation or merger or the corporation
purchasing such assets shall assume by written instrument mailed or delivered to
the holder of this Warrant at the last address of such holder appearing on the
books of the Company, the obligation to deliver to such holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to purchase. If a purchase, tender or exchange
offer is made to and accepted by the holders of more than 50% of the outstanding
shares of Common Stock of the Company, the Company shall not effect any
consolidation, merger or sale with the person having made such offer or with any
Affiliate of such person, unless prior to the consummation of such
consolidation, merger or sale the holder of this Warrant shall have been given a
reasonable opportunity to then elect to receive upon the exercise of this
Warrant either the stock, securities or assets then issuable with respect to the
Common Stock of the Company or the stock, securities or assets, or the
equivalent, issued to previous holders of the Common Stock in accordance with
such offer. For purposes hereof the term "Affiliate" with respect to any given
person shall mean any person controlling, controlled by or under common control
with the given person.
3.5. No Adjustment for Exercise of Certain Options, Warrants, Etc.
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The provisions of this Section 3 shall not apply to any Common Stock issued,
issuable or deemed outstanding under subparagraphs 3.1(1) to (9) inclusive: (i)
to any person pursuant to any stock option, stock purchase or similar plan or
arrangement for the benefit of employees, consultants or directors of the
Company or its subsidiaries or (ii) pursuant to options, warrants and conversion
rights in existence on the date of issuance hereof.
3.6. Notices of Record Date, Etc. In the event that following a
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Public Offering or Next Round Financing:
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(1) the Company shall declare any cash dividend upon its Common
Stock, or
(2) the Company shall declare any dividend upon its Common Stock
payable in stock or make any special dividend or other distribution to the
holders of its Common Stock, or
(3) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or other
rights, or
(4) there shall be any capital reorganization or reclassification
of the capital stock of the Company, including any subdivision or combination of
its outstanding shares of Common Stock, or consolidation or merger of the
Company with, or sale of all or substantially all of its assets to, another
corporation, or
(5) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in connection with such event, the Company shall give to the holder of
this Warrant:
(i) at least ten (10) days prior written notice of the date on which
the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights to
vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up; and
(ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at
least ten (10) days prior written notice of the date when the same shall
take place. Such notice in accordance with the foregoing clause (i) shall
also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto, and such notice in accordance with this clause (ii) shall
also specify the date on which the holders of Common Stock shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up, as the case may be.
Each such written notice shall be given by first class mail, postage
prepaid, addressed to the holder of this Warrant at the address of such
holder as shown on the books of the Company.
3.7. Grant, Issue or Sale of Options, Convertible Securities, or
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Rights. If at any time or from time to time on or after the date of issuance
------
hereof, the Company shall grant, issue or sell any Options, Convertible
Securities or rights to purchase property (the "Purchase Rights") pro rata to
the record holders of any class of Common Stock of the Company and such grants,
issuances or sales do not result in an adjustment of the Purchase Price under
Paragraph 3.1 hereof, then the holder of this Warrant shall be entitled to
acquire (within thirty (30) days after the later to occur of the initial
exercise date of such Purchase Rights or receipt by such
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holder of the notice concerning Purchase Rights to which such holder shall be
entitled under Paragraph 3.6) and upon the terms applicable to such Purchase
Rights either:
(i) the aggregate Purchase Rights which such holder could have
acquired if it had held the number of shares of Common Stock acquirable
upon exercise of this Warrant immediately before the grant, issuance or
sale of such Purchase Rights; provided that if any Purchase Rights were
distributed to holders of Common Stock without the payment of additional
consideration by such holders, corresponding Purchase Rights shall be
distributed to the exercising holder of this Warrant as soon as possible
after such exercise and it shall not be necessary for the exercising holder
of this Warrant specifically to request delivery of such rights; or
(ii) in the event that any such Purchase Rights shall have
expired or shall expire prior to the end of said thirty (30) day period,
the number of shares of Common Stock or the amount of property which such
holder could have acquired upon such exercise at the time or times at which
the Company granted, issued or sold such expired Purchase Rights.
3.8. Adjustment by Board of Directors. If any event occurs as to
--------------------------------
which, in the opinion of the Board of Directors of the Company, the provisions
of this Section 3 are not strictly applicable or if strictly applicable would
not fairly protect the rights of the holder of this Warrant in accordance with
the essential intent and principles of such provisions, then the Board of
Directors shall make an adjustment in the application of such provisions, in
accordance with such essential intent and principles, so as to protect such
rights as aforesaid, but in no event shall any adjustment have the effect of
increasing the Purchase Price as otherwise determined pursuant to any of the
provisions of this Section 3 except in the case of a combination of shares of a
type contemplated in Paragraph 3.3 and then in no event to an amount larger than
the Purchase Price as adjusted pursuant to Paragraph 3.3.
3.9. Fractional Shares. The Company shall not issue fractions of
-----------------
shares of Common Stock upon exercise, partial exercise pursuant to Section 1.1,
or net issue exercise pursuant to Section 1.2 of this Warrant. If any fraction
of a share of Common Stock would, except for the provisions of this Paragraph
3.9, be issuable upon such exercise of this Warrant, the Company shall in lieu
thereof pay to the person entitled thereto an amount in cash equal to the
current value of such fraction, calculated to the nearest one-hundredth (1/100)
of a share, to be computed (i) if the Common Stock is listed on any national
securities exchange on the basis of the last sales price of the Common Stock on
such exchange (or the quoted closing bid price if there shall have been no
sales) on the date of conversion, or (ii) if the Common Stock shall not be
listed, on the basis of the mean between the closing bid and asked prices for
the Common Stock on the date of conversion as reported by Nasdaq, or its
successor, and if there are not such closing bid and asked prices, on the basis
of the fair market value per share as determined by the Board of Directors of
the Company.
3.10. Officers' Statement as to Adjustments. Whenever the Purchase
-------------------------------------
Price shall be adjusted as provided in Section 3 hereof, the Company shall
forthwith file at each office
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designated for the exercise of this Warrant a statement, signed by the Chairman
of the Board, the President, or any Vice President or Treasurer of the Company,
showing in reasonable detail the facts requiring such adjustment and the
Purchase Price that will be effective after such adjustment. The Company shall
also cause a notice setting forth any such adjustments to be sent by mail, first
class, postage prepaid, to the record holder of this Warrant at its address
appearing on the stock register. If such notice relates to an adjustment
resulting from an event referred to in Paragraph 3.6, such notice shall be
included as part of the notice required to be mailed and published under the
provisions of Paragraph 3.6 hereof.
4. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
charter or through reorganization, consolidation, merger, dissolution, sale of
assets or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
holder hereof against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the par value of any
shares of stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and at all times will take all such action
as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable stock upon the exercise of this
Warrant.
5. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANTS. The Company
shall at all times reserve and keep available out of its authorized but unissued
stock, solely for the issuance and delivery upon the exercise of this Warrant
and other similar Warrants, such number of its duly authorized shares of Common
Stock as from time to time shall be issuable upon the exercise of this Warrant
and all other similar Warrants at the time outstanding. All of the shares of
Common Stock issuable upon exercise of this Warrant, when issued and delivered
in accordance with the terms hereof, will be duly authorized, validly issued,
fully-paid and non-assessable.
6. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to it, or (in the case of mutilation) upon surrender and
cancellation thereof, the Company will issue, in lieu thereof, a new Warrant of
like tenor.
7. REMEDIES. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default by the Company in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate, and that the same may be specifically enforced.
8. REGISTRATION RIGHTS. The shares of Common Stock issuable upon
exercise of this Warrant are subject to the registration rights set forth in
Exhibit A attached hereto.
---------
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9. NEGOTIABILITY. This Warrant is issued upon the following terms, to
all of which each taker or owner hereof consents and agrees:
(a) Except as provided in the Subscription Agreement dated April __,
1999 by and between the Company and the holder hereof, the Certificate of
Incorporation and Bylaws of the Company, to the extent the holder hereof is a
party to the Securities Holders Agreement dated as of February 2, 1999, among
the Company and the investors named therein (the "SHA"), the SHA, and subject to
the legend appearing on the first page hereof, title to this Warrant may be
transferred by endorsement (by the holder hereof executing the form of
assignment at the end hereof including guaranty of signature) and delivery in
the same manner as in the case of a negotiable instrument transferable by
endorsement and delivery. Absent an effective registration statement under the
Securities Act of 1933, as amended (the "Act"), covering the disposition of this
Warrant or the shares of Common Stock issued or issuable upon exercise hereof,
the holder will not sell or transfer any or all of such Warrant or shares, as
the case may be, without first providing the Company with an opinion of counsel
(which may be counsel for the Company) to the effect that such sale or transfer
will be exempt from the registration and prospectus delivery requirements of the
Act. Each certificate representing shares of Common Stock issued pursuant to
this Warrant, unless at the same time of exercise such Warrant shares are
registered under the Act, shall bear a legend in substantially the following
form on the face thereof:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR APPLICABLE STATE SECURITIES LAWS AND MAY BE TRANSFERRED OR
RESOLD ONLY IN COMPLIANCE WITH SUCH SECURITIES LAWS.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a certificate issued upon completion of
a distribution under a registration statement covering the securities
represented) shall also bear such legend unless, in the opinion of counsel to
the Company, the securities represented thereby may be transferred as
contemplated by such holder without violation of the registration requirements
of the Act.
(b) Any person in possession of this Warrant properly endorsed is
authorized to represent itself as absolute owner hereof and is granted power to
transfer absolute title hereto by endorsement and delivery hereof to a bona fide
purchaser hereof for value; each prior taker or owner waives and renounces all
of its equities or rights in this Warrant in favor of every such bona fide
purchaser, and every such bona fide purchaser shall acquire title hereto and to
all rights represented hereby.
(c) Until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder of this Warrant as the absolute owner
hereof for all purposes without being affected by any notice to the contrary.
(d) Prior to the exercise of this Warrant, the holder hereof shall not
be entitled to any rights of a shareholder of the Company with respect to shares
for which this Warrant shall
-11-
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
(e) The Company shall not be required to pay any Federal or state
transfer tax or charge that may be payable in respect of any transfer involved
in the transfer or delivery of this Warrant or the issuance or conversion or
delivery of certificates for Common Stock in a name other than that of the
registered holder of this Warrant or to issue or deliver any certificates for
Common Stock upon the exercise of this Warrant until any and all such taxes and
charges shall have been paid by the holder of this Warrant or until it has been
established to the Company's satisfaction that no such tax or charge is due.
10. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. This Warrant is issued
and delivered by the Company on the basis of the following:
(a) Authorization and Delivery. This Warrant has been duly authorized
--------------------------
and executed by the Company and when delivered will be the valid and binding
obligation of the Company enforceable in accordance with its terms;
(b) Warrant Shares. The shares of Common Stock to be issued pursuant
--------------
to this Warrant have been duly authorized and reserved for issuance by the
Company and, when issued and paid for in accordance with the terms hereof, will
be validly issued, fully paid and nonassessable;
(c) Rights and Privileges. The rights, preferences, privileges and
---------------------
restrictions granted to or imposed upon such shares of Common Stock and the
holders thereof are as set forth herein and in the Company's Articles of
Incorporation, and in the Common Stock and Warrant Purchase Agreement, true and
complete copies of which have been delivered to the original warrant holder; and
(d) No Inconsistency. The execution and delivery of this Warrant are
----------------
not, and the issuance of the shares of Common Stock upon exercise of this
Warrant in accordance with the terms hereof will not be, inconsistent with the
Company's Certificate of Incorporation or by-laws, do not and will not
contravene any law, governmental rule or regulation, judgment or order
applicable to the Company, and do not and will not contravene any provision of,
or constitute a default under, any indenture, mortgage, contract or other
instrument of which the Company is a party or by which it is bound or require
the consent or approval of, the giving of notice to, the registration with the
taking of any action in respect of or by, any Federal, state or local government
authority or agency or other person.
11. REPRESENTATIONS AND WARRANTIES OF HOLDER.
(a) The holder hereby represents and warrants to the Company that it
has substantial knowledge, skill and experience in making investment decisions
of the type represented by this Warrant and the shares issuable upon exercise of
this Warrant, that it is
-12-
capable of evaluating the risk of its investment in this Warrant and the shares
issuable upon exercise of this Warrant and is able to bear the economic risk of
such investment, including the risk of losing the entire investment, that it is
acquiring this Warrant and the shares issuable upon exercise of this Warrant for
its own account, and that this Warrant and the shares issuable upon exercise of
this Warrant are being acquired by it for investment and not with a present view
to any distribution thereof in violation of applicable securities law. If the
holder should in the future decide to dispose of any of this Warrant and the
shares issuable upon exercise of this Warrant, it is understood that it may so
do only in compliance with the Act and applicable state securities laws. The
holder represents and warrants that it is an "Accredited Investor" as defined in
Rule 501(a) under the Act.
(b) The holder understands that (i) this Warrant and the shares
issuable upon exercise of this Warrant have not been registered under the Act by
reason of their issuance in a transaction exempt from the registration
requirements of the Act, (ii) this Warrant and the shares issuable upon exercise
of this Warrant must be held indefinitely unless a subsequent disposition
thereof is registered under the Act and applicable state securities laws or is
exempt from such registration (and, upon request, evidence satisfactory to the
Company is provided by such holder of the availability of such exemptions,
including, upon request, the delivery to the Company of opinions of counsel to
such holder, which opinions and counsel are satisfactory to the Company), and
(iii) this Warrant and the shares issuable upon exercise of this Warrant may
bear a legend to such effect.
12. SUBDIVISION OF RIGHTS. This Warrant (as well as any new warrants
issued pursuant to the provisions of this paragraph) is exchangeable, upon the
surrender hereof by the holder hereof, at the principal office of the Company
for any number of new warrants of like tenor and date representing in the
aggregate the right to subscribe for and purchase the number of shares of Common
Stock of the Company that may be subscribed for and purchased hereunder.
13. MAILING OF NOTICES. All notices and other communications from the
Company to the holder of this Warrant shall be mailed by first-class certified
mail, postage prepaid, to the address furnished to the Company in writing by the
last holder of this Warrant who shall have furnished an address to the Company
in writing.
14. HEADINGS. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect the meaning hereof.
15. CHANGE, WAIVER. Neither this Warrant nor any term hereof may be
changed, waived, discharged or terminated orally but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
16. GOVERNING LAW. This Warrant shall be construed and enforced in
accordance with the laws of the State of Delaware.
-13-
IN WITNESS WHEREOF, the Company, by the undersigned thereunto duly
authorized, has duly executed this Warrant as of the date first written above.
INTERNET CAPITAL GROUP, INC.
By:________________________________
Name:
Title:
Dated: May , 1999
Attest:
_________________________
ACCEPTED AS OF THE DATE HEREOF:
By:________________________________
Name:
Title:
-14-
[To be signed only upon exercise of Warrant]
To ___________________:
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, ______ shares of Common Stock of _____________ and herewith
makes payment of $_____ therefor, and requests that the certificates for such
shares be issued in the name of, and be delivered to ____________, whose address
is _____________.
Dated: _____________
____________________________________
By_____________________________________
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant)
Address:
____________________________________
____________________________________
-15-
[To be signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________ the right represented by the within Warrant to purchase the
______ shares of the Common Stock of ____________________ to which the within
Warrant relates, and appoints _____________ attorney to transfer said right on
the books of _____________________ with full power of substitution in the
premises.
Dated:_____________
_______________________________________
By_____________________________________
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant)
Address:
_______________________________________
_______________________________________
In the presence of
________________________
Signature Guarantee
-16-
EXHIBIT A
---------
REGISTRATION RIGHTS
-------------------
1.1 Piggyback Registration.
----------------------
(a) If the Company at any time after the consummation of its
initial public offering proposes for any reason, whether for its own account or
the account of others, to register any of its securities under the Securities
Act, other than pursuant to a Special Registration Statement (as hereinafter
defined), it shall each such time promptly give written notice to the registered
Holders of the Eligible Securities (as defined in Section 1.2(c)) of its
intention to do so, and, upon the written request, given within twenty (20) days
after receipt of any such notice, of a Holder to register any of its Eligible
Securities, the Company shall (subject to Section 1.1(b) hereof) use its best
efforts to cause all Eligible Securities with respect to which Holders shall
have so requested registration to be registered under the Securities Act
promptly upon receipt of the written request of such Holders for such
registration, all to the extent required to permit the sale or other disposition
by the Holders of the Eligible Securities so registered in the manner
contemplated by such registration statement. "Special Registration Statement"
means a registration statement on Forms S-8 or S-4 or any successor form or
other registration statement relating to shares of Common Stock issued in
connection with an acquisition of an entity or business or other business
combination, or shares of Common Stock issued in connection with stock option or
other employee benefit plans.
(b) In connection with any exercise by a Holder of its "piggyback"
registration rights pursuant to this Section 1.1 in connection with any
underwritten offering of securities of the Company, if the Company is advised in
writing (with a copy to the Holders requesting registration) by the lead
underwriter for the offering that, in such firm's opinion, a registration of
Eligible Securities at that time would interfere with the orderly sale and
distribution of the securities being sold by the Company for its own account,
then the number of shares that may be included in the underwriting shall be
allocated, first, to the Company, second, to each of the Holders requesting
inclusion of their Eligible Securities in such registration statement on a pro
rata basis based on the total number of Eligible Securities held by each such
Holder and, third, to any other shareholders requesting registration.
(c) For purposes of this Exhibit A, the following terms shall
have the following meanings: (i) "Common Stock" shall mean the shares of common
stock of Internet Capital or any successor corporation; (ii) "Company" shall
mean and include Internet Capital and any successor corporation; (iii) "Holders"
shall mean each Strategic Partner, as such term is defined in the Securities
Holders Agreement (the "SHA"), dated February 2, 1999 among Internet Capital and
the investors named therein, for so long as (and to the extent that) it owns any
Eligible Securities, each of their respective successors, assigns, and
transferees who become registered owners of Eligible Securities, and the holders
of Eligible Securities pursuant to the Convertible Note (the "Note") dated April
, 1999 and the Common Stock Purchase Warrant (the "Warrant"), dated April _____,
1999 to which this Exhibit A is attached; and (iv) "Internet
---------
-1-
Capital" shall mean Internet Capital Group, Inc., a Delaware corporation.
1.2 Demand Registration.
-------------------
(a) Any Strategic Partner may, at any time after consummation of
the Company's initial public offering of equity securities, request in writing
that the Company cause a registration statement to be filed under the Securities
Act (on any Form then available to the Company) with respect to such of its
Eligible Securities as it shall specify in such request, provided that (i) the
gross proceeds from such offering will be or are reasonably expected to be not
less than $5 million and (ii) such Strategic Partner includes at least 25% of
its Eligible Securities in its request. The Company shall promptly give written
notice of such request to the other Holders of Eligible Securities and afford
them the opportunity of including in the requested registration statement such
of their Eligible Securities as they shall specify in a written notice given to
the Company within thirty (30) days after their receipt of the Company's notice
of the request for the filing of a registration statement. Following receipt of
such notices, the Company shall promptly use its best efforts to cause all
Eligible Securities with respect to which Holders shall have so requested
registration to be registered under the Securities Act, all to the extent
required to permit the sale or other disposition by the Holders of the Eligible
Securities so registered in the manner specified by such Holders in their
notices and pursuant to this Section.
(b) The Company shall not be required to file and cause to become
effective more than two (2) registration statements at the demand of any
Strategic Partner made under this Section 1.2.
(c) The term "Eligible Securities" shall mean, on any date, (i)
all shares of Common Stock or other securities of the Company issued by way of a
stock split, stock dividend, recapitalization, merger or consolidation, (ii)
plus all shares of Common Stock or other securities of the Company issued in
respect of the Note and Warrant, (iii) but exclusive of any securities described
in clauses (i) or (ii) which have been (A) sold in a public offering registered
under Securities Act or (B) subsequently sold pursuant to Rule 144 under the
Securities Act.
(d) If the Holders of the Eligible Securities making such demand
propose to sell their Eligible Securities in a firm commitment underwriting and
the managing underwriter advises such Holders that not all Eligible Securities
of such Holders can be included in such offering, then the requisite number of
Eligible Securities shall be excluded from registration on a basis pro rata
among the Holders of the Eligible Securities requesting such registration on the
basis of the number of Eligible Securities held by each of them. If by virtue
of this Section 1.2(d), more than 50% of the Eligible Securities which a
Strategic Partner has demanded be registered are excluded from the registration
statements then such Strategic Partner shall not be deemed to have exercised a
demand registration right under this Section 1.2.
(e) Provided the Company has honored its obligations under Section
1.1, no demand registration right granted in this Section may be exercised by
any Strategic Partner during any period of time beginning on the date the
Company (i) files a registration statement with
-2-
the Securities and Exchange Commission registering any of its securities for
sale to the public or (ii) files a registration statement upon the demand of any
other Strategic Partner pursuant to this Section 1.2, and ending on the earlier
to occur of (A) 90 days after the date on which such registration statement is
declared effective by the Securities and Exchange Commission or otherwise
becomes effective, and (B) the 180th day after the date of such filing.
(f) The demand registration rights granted in this Section 1.2
shall expire, if not exercised prior thereto, on the date on which more than 90%
of the Eligible Securities (as of the date of this Agreement) shall have been
publicly sold by the Holders thereof in a public offering registered under the
Securities Act of 1933 or pursuant to Rule 144 thereunder.
1.3 Form S-3 Registrations. In addition to the rights provided the
----------------------
Holders of registrable securities in Sections 1.1 and 1.2 above, if the
registration of Eligible Securities under the Securities Act can be effected on
Form S-3 (or any similar form promulgated by the Commission), then upon the
written request of one or more Holders of Eligible Securities, the Company will
so notify each Holder of Eligible Securities, including each Holder who has a
right to acquire Eligible Securities, and then will, as expeditiously as
possible, use its best efforts to effect qualification and registration under
the Securities Act on Form S-3 of all or such portion of the Eligible Securities
as the Holder or Holders shall specify pursuant to this Section 1.3, provided
that the Company shall have no obligation to file a registration statement under
this Section 1.3 unless the gross proceeds from the offering will be or are
reasonably expected to be not less than $500,000.
1.4 Registration Procedures. If and whenever the Company is under an
-----------------------
obligation pursuant to the provisions of this Exhibit A to use its best efforts
to effect the registration of any Eligible Securities the Company shall, as
expeditiously as practicable:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Eligible Securities and use its best
efforts to cause such registration statement to become effective;
(b) prepare and file with the Securities and Exchange 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 under the Securities Act until the earlier of
such time as all securities covered thereby have been sold or one hundred and
eighty (180) days after such registration statement becomes effective, as such
period may be extended pursuant to Section 1.5, and to comply with the
provisions of the Securities Act with respect to the sale or other disposition
of all Eligible Securities covered by such registration statement for such
period;
(c) furnish to each selling stockholder such numbers of copies of
each prospectus (including each preliminary prospectus) in conformity with the
requirements of the Securities Act, and such other documents as such seller may
reasonably request in order to facilitate the public sale or other disposition
of such Eligible Securities;
-3-
(d) use its best efforts to register or qualify the Eligible
Securities covered by such registration statement under the securities or blue
sky laws of such jurisdictions as the managing underwriter, if any, or if there
is no managing underwriter, the Holders of at least 25% of the Eligible
Securities, shall request, (provided that the Company shall not be required to
consent to general service of process for all purposes in any jurisdiction where
it is not then qualified) and do any and all other acts or things which may be
reasonably necessary or advisable to enable such seller to consummate the public
sale or other disposition in such jurisdictions of such Eligible Securities;
(e) notify each seller of the Eligible Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act within the appropriate period
mentioned in clause (b) of this Section 1.4, 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 such seller prepare and furnish to such seller a reasonable
number of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Eligible
Securities, such prospectus shall not include an untrue statement of a 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; and
(f) furnish on the date that such Eligible Securities are
delivered to the underwriters for sale pursuant to such registration or, if such
Eligible Securities are not being sold through underwriters, on the date that
the registration statement with respect to such Eligible Securities becomes
effective, (i) an opinion, dated such date, of the independent counsel
representing the Company for the purposes of such registration, addressed to the
underwriters, if any, and at the request of any Holder or Holders of Eligible
Securities requesting registration pursuant to this Exhibit A, to the Holder or
Holders making such request, stating that such registration statement has become
effective under the Securities Act and that (1) no stop order suspending the
effectiveness thereof has been issued and, to the best knowledge of such
counsel, no proceedings for that purpose have been instituted or are pending or
contemplated under the Securities Act; (2) the registration statement, the
related prospectus, and each amendment or supplement thereto, comply as to form
in all material respects with the requirements of the Securities Act and the
applicable rules and regulations of the Securities and Exchange Commission
thereunder (except that such counsel need express no opinion as to financial
statements contained therein); (3) such counsel has no reason to believe that
either the registration statement or the prospectus, or any amendment or
supplement thereto, contains any 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 (except that such counsel need express no
opinion as to financial statements contained therein); (4) the description in
the registration statement or the prospectus, or any amendment or supplement
thereto, of all legal and governmental matters and all contracts and other legal
documents or instruments are accurate and fairly present the information
required to be shown; (5) such counsel does not know of any legal or
governmental proceedings, pending or contemplated, required to be described in
the registration
-4-
statement or prospectus, or any amendment or supplement thereto, which are not
described as required, nor of any contracts or documents or instruments of a
character required to be described in the registration statement or prospectus,
or any amendment or supplement thereto, or to be filed as exhibits to the
registration statement which are not described and filed as required, and (6)
such other legal matters with respect to such registration as the underwriters,
if any, and any such Holder or Holders requesting such opinion may reasonably
request; and (ii) in the case of an underwritten offering, a comfort letter,
dated such date, from the independent certified public accountants of the
Company, addressed to the underwriters and the Company's Board of Directors in
the customary form.
1.5 Delay in Registration. Notwithstanding anything contained in
---------------------
this Agreement to the contrary, the Company reserves the right to delay any such
registration pursuant to this Exhibit A for a period of not more than one
hundred and twenty (120) days, or to withhold efforts to cause such registration
statement to become effective for a period of not more than one hundred twenty
(120) days, if the Board of Directors of the Company determines in good faith
that such registration might (A) interfere with or affect the negotiation or
completion of any material transaction that is being contemplated by the
Company, or (B) involve initial or continuing disclosure obligations materially
adverse to the best interests of the Company's shareholders. If, after a
registration statement becomes effective, the Company advises the Holders of the
registrable securities covered by such registration statement that the Company
considers it appropriate for the registration statement to be amended, the
Holders of such shares shall suspend any further sales of their registered
shares until the Company advises them that the registration statement has been
amended. The time periods referred to this Exhibit A shall be extended for an
additional number of business days during which the rights to sell shares was
suspended.
1.6 Information to be Furnished by Holders of Eligible Securities.
-------------------------------------------------------------
Each prospective seller of Eligible Securities, registered or to be registered
under any registration statement shall furnish to the Company such information
and execute such documents regarding the Eligible Securities held by such seller
and the intended method of disposition thereof as the Company shall reasonably
request in connection with the action to be taken by the Company.
1.7 Expenses of Registration.
------------------------
(a) All expenses incurred by the Company in complying with this
Exhibit A (other than the underwriting discounts and commissions), including,
without limitation: (i) all registration and filing fees (including all expenses
incident to filing with the National Association of Securities Dealers, Inc.);
(ii) the fees and expenses of complying with securities and blue sky laws; (iii)
expense allowances of the underwriters; (iv) printing expenses; (v) fees and
disbursements of Company counsel and of one counsel for the participating
Holders together, which counsel is reasonably acceptable to the Holders; and
(vi) the fees and expenses of the independent public accountants (including the
expense of any special audits in connection with any such registration), are
hereinafter called "Registration Expenses." All underwriting discounts and
commissions applicable to the Eligible Securities covered by any such
registration, are herein called "Selling Expenses."
-5-
(b) The Company shall pay all Registration Expenses in connection
with all piggyback registrations under Section 1.1 and all demand registrations
under Section 1.2 plus up to one (1) S-3 registration per year pursuant to
Section 1.3. All Selling Expenses in connection with each registration pursuant
to this Exhibit A and any legal fees and expenses of additional special counsel
for the sellers shall be borne by the seller or sellers therein in proportion to
the number of Eligible Securities included by each in such registration, or in
such other proportions as they may agree upon.
1.8 Indemnification.
---------------
(a) The Company shall indemnify and hold harmless each Holder of
Eligible Securities, its executive officers, directors and controlling persons
(within the meaning of the Securities Act) and each person who participates as
an underwriter or controlling person of an underwriter (within the meaning of
the Securities Act) with respect to a registration statement pursuant to this
Exhibit A against any loss, claims, damages or liabilities to which any of them
may become subject under the Securities Act or otherwise insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement of any material fact contained in a
registration statement including Eligible Securities owned by such Holder, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, or arise out of or are based upon the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse any of them for any legal
or other expenses reasonably incurred by any of them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable hereunder to a
particular Holder in any such case if any such loss, claim, damage, or liability
arises out of or is based upon any untrue statement or omission made in such
registration statement, prospectus or amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company for such purpose by such Holder or by its representative or by any
underwriter on behalf of such Holder or if the untrue statement or omission is
corrected in a supplement or amendment to the prospectus provided by the Company
to such Holder in a timely fashion in accordance with this Exhibit A which was
not used by such Holder.
(b) Each Holder of Eligible Securities joining in any registration
statement of the Company pursuant to this Exhibit A shall indemnify and hold
harmless the Company, its executive officers, directors, and controlling persons
(within the meaning of the Securities Act) and each person who participates as
an underwriter or controlling person of an underwriter (within the meaning of
the Securities Act) with respect to a registration statement pursuant to Exhibit
A against any losses, claims, damages, or liabilities to which any of them may
become subject under the Securities Act or otherwise insofar as such losses,
claims, damages, or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement of any material fact contained in such
registration statement, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise out of or are based
upon the omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, made in reliance
upon and in conformity with written information furnished to the Company by such
Holder or by its representative or by any
-6-
underwriter on behalf of such Holder for such purpose, and will reimburse any of
them 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 total amount payable by a Holder under this
-------- -------
Section 1.8(b) shall not exceed the net proceeds received by such Holder in such
registered offering.
(c) Promptly after receipt by an indemnified party under this
Section 1.8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party,
notify the indemnifying party in writing of the commencement thereof and the
indemnifying party shall have the right to assume the defense thereof with
counsel mutually satisfactory to the parties. The failure to notify an
indemnifying party promptly of the commencement of any such action, if
prejudicial to the ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.8, but the omission so to notify the indemnifying party will not relieve such
party of any liability that such party may have to any indemnified party other
than under this Section 1.8.
(d) If the indemnification provided for in this Section 1.8 is
unavailable to or insufficient to hold harmless an amount in excess of the
proceeds received by such Holder in the offering.
1.9 Underwriting Agreement. If Eligible Securities are sold pursuant
----------------------
to a registration statement in an underwritten offering pursuant to this Exhibit
A, the Company and the Holders participating therein agree to enter into an
underwriting agreement containing customary representations and warranties with
respect to the business and operations of an issuer of, or, as the case may be,
the seller of the securities being registered and customary covenants and
agreements to be performed by such issuer or seller, including, without limiting
the generality of the foregoing, customary provisions with respect to
indemnification by the Company of the underwriter(s) of such offering.
1.10 "Market Stand-Off" Agreement. Each Holder hereby agrees that it
----------------------------
shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell or otherwise transfer or dispose of any Eligible
Securities for up to that period of time following the effective date of a
registration statement of the Company filed under the Securities Act as is
requested by the managing underwriters of such offering, not to exceed one
hundred and eighty (180) days.
1.11 Subsequent Registration Rights. The Company shall not grant any
------------------------------
registration rights to any other person that are more favorable to such person
than the registration rights granted to the Holders hereunder without the prior
written consent of the Holders of at least a majority of the Eligible
Securities.
-7-
1.12 Assignment. The registration rights granted hereunder may be
----------
assigned by a Holder to any person who acquires such Holder's Eligible
Securities in accordance with the SHA and the Amended and Restated Certificate
of Incorporation and Bylaws of the Company..
-8-
