EXHIBIT 4.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of June 22
1998, by and among Replicase, Inc., a Delaware corporation (the "Company"), and
the parties listed on Schedule 1 attached hereto.
W I T N E S S E T H:
-------------------
WHEREAS, Xxxx Xxxxxx, a resident of the State of California, Xxxxx Xxx, a
resident of the State of California, Xxxxx Xxxx, a resident of the State of
California and Xxxxx Xxxx, a resident of the State of California (collectively,
the "Series A Stockholders"), hold all of the outstanding Series A Convertible
Preferred Stock, par value $0.0001 per share (the "Series A Stock"), of the
Company;
WHEREAS, by entering into this Agreement, the Company wishes to provide to
the Series A Stockholders certain registration rights with respect to the Series
A Stock;
WHEREAS, the Company intends that such registration rights shall be
subordinate to the registration rights granted to Investors under that certain
Registration Rights Agreement, dated as of the date hereof, by and among the
Company and the Investors ("Investor Rights Agreement");
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Definitions. For purposes of this Agreement:
"Common Shares" means the shares of the common stock, par value
$0.0001 per share, of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Form S-3" means such form under the Securities Act as in effect on
the date hereof or any registration form under the Securities Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
"Holder" means a Series A Stockholder (to the extent that such
stockholder is a holder of Registrable Securities) or any assignee thereof in
accordance with Section 11.
"Investors" means collectively Accel VI, L.P., Accel Internet Fund II,
L.P., Accel Keiretsu VI, L.P., Accel Investors '98 L.P., Softbank Technology
Advisors Fund, L.P., Softbank Technology Ventures IV, Flatiron Partners, WHP
Partners, and Xxxxxx Xxxxxx.
"Investor Rights Agreement" shall have the meaning ascribed thereto in the
recitals hereof.
"Majority in interest of the Holders" means Holders holding a majority of
the Registrable Securities held by all Holders.
"Person" means any individual, partnership, joint venture, corporation,
limited liability company, association, trust or any other entity or
organization.
"Preferred Stock" means the Series A Stock.
"Qualifying Request" means a request from one or more Holders owning in the
aggregate at least ten percent (10%) of the Registrable Securities held by the
Holders.
"register," "registered," and "registration" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.
"Registrable Securities" means (i) any Common Shares issuable (without
regard to any restriction or conversion that may be applicable to any particular
holder of Preferred Stock) or issued upon conversion of the Preferred Stock, and
(ii) any Common Shares issued (or issuable upon conversion or exercise of any
warrant, right or other securities which is issued) as a dividend or other
distribution with respect to, or in exchange for or in replacement of, or upon
conversion of, such Preferred Stock, Common Shares, warrants, rights or other
securities; provided, however, that any shares of Preferred Stock or Common
Shares sold by a Person in a transaction in which such Person's rights under
this Agreement are not assigned pursuant to Section 11 below shall cease to be
Registrable Securities from and after the time of such sale.
The number of shares of "Registrable Securities then outstanding" shall be
determined by the number of Common Shares outstanding, and the number of Common
Shares issuable, which are Registrable Securities.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
-2-
"Series A Stock" has the meaning ascribed thereto in the recitals
above.
"Series A Stockholder" has the meaning ascribed thereto in the
recitals above.
"Stockholders' Rights Agreement" means that certain Stockholders'
Rights Agreement, by and among the Company and each of the Series A
Stockholders, dated June 19, 1998.
"Violation" means any of the following statements, omissions or
violations: (i) any untrue statement or alleged untrue statement of a material
fact contained in a registration statement under this Agreement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto or any documents filed under state securities or "blue
sky" laws in connection therewith, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law.
-3-
2. Request for Registration.
(a) If at any time more than one hundred eighty (180) days after
the initial public offering of the Company's securities, the Company shall
receive a written Qualifying Request that the Company file a registration
statement under the Securities Act, then the Company shall, within ten (10) days
of the receipt thereof, give written notice of such request to all Holders and
shall, subject to the limitations of Section 2(b) below, effect as soon as
practicable, and in any event within sixty (60) days of the receipt of such
request, the registration under the Securities Act of all Registrable Securities
which the Holders request to be registered within twenty (20) days of the
mailing of such notice by the Company in accordance with Section 19 below;
provided, however, that (i) Registrable Securities having at least a proposed
aggregate offering price of $3,000,000 are to be registered, and (ii) the
Company shall be obligated to effect only two (2) registrations pursuant to this
Section 2(b); provided, further, that such notice shall be provided to all
Investors holding registrable securities under the Investor Rights Agreement in
accordance with the notice provisions of the Investor Rights Agreement who shall
have participation rights in such registration under this section 2(a) equal to
the Holders; provided, further, that in the event that a written qualifying
request (as that term is defined in the Investor Rights Agreement) is made by
Investors prior to the Company filing a registration statement in accordance
with a Qualifying Request made under this Section 2(a), such Qualifying Request
will be deemed withdrawn and shall not be consummated. Expect as otherwise
provided in Section 6 hereof, registrations which are not consummated shall not
be counted for this purpose.
(b) If Holders intend to distribute the Registrable Securities
covered by their request by means of an underwriting, they shall so advise the
Company and the Company shall include such information in the written notice
referred to in Section 2(a). In such event, the right of any Holder to include
such Holder's Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed between the Holders making the Qualifying Request and such Holder) to the
extent provided herein; provided, however, that each Investor holding registered
securities shall be eligible to participate in such underwriting and the
Holders' rights to participate in such underwriting will be subordinate in all
respects to Investor's rights to participate in such underwriting. A majority
in interest of the Holders and Investors participating in the underwriting
shall, after consultation with the Board of Directors of the Company, select the
managing underwriter or underwriters in such underwriting, such underwriter(s)
to be reasonably satisfactory to the Company. All Holders and Investors
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in Section 4(f)) enter into an
underwriting agreement in customary form with the underwriter or underwriters so
selected or such underwriting; provided, however, that no such Holder or
Investor shall be required to make any representations or warranties except as
they relate to such Holder's or Investor's ownership of shares and
-4-
authority to enter into the underwriting agreement and to such Holder's or
Investor's intended method of distribution, and the liability of such Holder or
Investor shall be limited to an amount equal to the net proceeds from the
offering received by such Holder or Investor. Notwithstanding any other
provision of this Section 2, if the underwriter advises the Holders and
Investors in writing that marketing factors require a limitation of the number
of shares to be underwritten, then the Holders and Investors shall so advise the
Company and the Company shall so advise all Holders or Investors of Registrable
Securities which would otherwise be underwritten pursuant hereto, and the number
of shares of Registrable Securities that may be included in the underwriting
shall be allocated (i) first to the Investors, (ii) then to the Holders making
the Qualifying Request, and (iii) thereafter among all other Holders thereof, in
proportion (as nearly as practicable) to the amount of Registrable Securities of
the Company owned by each such other Holder.
(c) In addition to any other rights to demand registration
pursuant to this Section 2, Holders shall have the right to demand on an
unlimited basis that the Company, at the Company's expense, include any or all
of their Registrable Securities, in a registration statement on Form S-3 under
the 1933 Act for the purpose of attempting to effect the public sale of such
shares; provided, however, that (i) such Holders making such a demand under this
Section 2(c) own in the aggregate at least five percent (5%) of the Registrable
Securities; (ii) Registrable Securities having at least a proposed aggregate
offering price of $1,000,000 are to be registered; (iii) Form S-3 is available
with respect to the Registrable Securities; and (iv) the Company shall not be
required to prepare and file a registration statement on Form S-3 for the
purpose of attempting to effect the public sale of shares as provided for in
this Section 2(c) more than once in any six (6) month period. The other terms
and conditions relating to a demand registration referred to in this Section 2,
including, without limitation, any subordination to the rights of Investors
shall be applicable to a demand registration referred to in this Section 2(c),
as the same may be applicable.
(d) Notwithstanding the foregoing, if the Company shall furnish
to Holders requesting a registration statement pursuant to this Section 2, a
certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its shareholders for such registration statement
to be filed by reason of a material pending transaction and it is therefore
essential to defer the filing of such registration statement, the Company shall
have the right to defer such filing for a period of not more than ninety (90)
days after receipt of the request of such Holders; provided, however, that the
Company may not utilize this right more than once in any twelve (12) month
period.
3. Company Registration. If (but without any obligation to do so)
the Company proposes to register (including for this purpose a registration
effected by the Company for holders of the Company's equity securities other
than the Holders) any of its securities under the Securities Act in connection
with the public offering of such securities solely for cash (other than a
registration on Form S-8 relating solely to the sale of securities to
participants in a Company stock plan or to other compensatory arrangements to
the extent
-5-
includable on Form S-8, or a registration on Form S-4), the Company shall, at
such time, promptly give each Holder written notice of such registration. Upon
the written request of each Holder given within twenty (20) days after mailing
of such notice by the Company in accordance with Section 19, the Company shall,
subject to the provisions of Section 8, cause to be registered under the
Securities Act all of the Registrable Securities that each such Holder has
requested to be registered. The Company shall have no obligation under this
Section 3 to make any offering of its securities, or to complete an offering of
its securities that it proposes to make, and shall incur no liability to any
Holder for its failure to do so.
4. Obligations of the Company. Whenever required under this
Agreement to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities being registered thereunder, keep
such registration statement effective for up to one hundred twenty (120) days or
until the Holders have completed the distribution referred to in such
registration statement, whichever occurs first (but in any event for at least
any period required under the Securities Act); provided, however, that before
filing such registration statement or any amendments thereto, the Company will
furnish to the Holders copies of all such documents proposed to be filed.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holders such number of copies of such
registration statement and of each amendment and supplement thereto (in each
case including all exhibits), such number of copies of the prospectus contained
in such registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities Act, and
such other documents as Holders may reasonably request in order to facilitate
the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or "blue sky"
laws of such states or jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto (i) to qualify to do business in any state or
jurisdiction where it would not otherwise be required to qualify but for the
requirements of this clause (d), or (ii) to file a general consent to service of
process in any such state or jurisdiction.
-6-
(e) Use its best efforts to cause all 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
Company's business or operations to enable the seller or sellers thereof to
consummate the disposition of such Registrable Securities.
(f) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering.
(g) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
(h) Notify each Holder of Registrable Securities covered by such
registration statement and such Holder's underwriters, if any, and confirm such
advice in writing: (i) when the registration statement has become effective,
(ii) when any post-effective amendment to the registration statement becomes
effective and (iii) of any request by the SEC for any amendment or supplement to
the registration statement or prospectus or for additional information.
(i) Notify each Holder of Registrable Securities if at any time
the SEC should institute or threaten to institute any proceedings for the
purpose of issuing, or should issue, a stop order suspending the effectiveness
of the registration statement. Upon the occurrence of any of the events
mentioned in the preceding sentence, the Company will use its best efforts to
prevent the issuance of any such stop order or to obtain the withdrawal thereof
as soon as possible. The Company will advise each Holder of Registrable
Securities promptly of any order or communication of any public board or body
addressed to the Company suspending or threatening to suspend the qualification
of any Registrable Securities for sale in any jurisdiction.
(j) Furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Agreement, (i) on the
date that such Registrable Securities are delivered to the underwriters for sale
in connection with a registration pursuant to this Agreement, if such securities
are being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and
-7-
(ii) on the date that the registration statement with respect to such securities
becomes effective, a "comfort" letter dated such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities, and, if such
securities are being sold through underwriters, a reaffirmation of such letter
on the date that such Registrable Securities are delivered to the underwriters
for sale.
(k) As soon as practicable after the effective date of the
registration statement, and in any event within sixteen (16) months thereafter,
make "generally available to its security holders" (within the meaning of Rule
158 under the Securities Act) an earning statement (which need not be audited)
covering a period of at least twelve (12) months beginning after the effective
date of the registration statement and otherwise complying with Section 11(a) of
the Securities Act.
5. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities. If any registration statement or comparable statement under the
Securities Act refers to a Holder or any of its affiliates, by name or
otherwise, as the holder of any securities of the Company then, unless counsel
to the Company advises the Company that the Securities Act requires that such
reference be included in any such statement, each such Holder shall have the
right to require the deletion of such reference to itself and its affiliates.
6. Expenses of Demand Registration. All expenses, other than
underwriting discounts and commissions relating to Registrable Securities,
incurred in connection with registrations, filing or qualifications pursuant to
Section 2, including, without limitation, all registration, filing and
qualification fees, printers' and accounting fees, fees and disbursements of
counsel for the Company, and the reasonable fees and disbursements of one
counsel (selected by the Holders holding a majority of the Registrable
Securities being registered) for the selling Holders shall be borne by the
Company; provided, however, that the Company shall not be required to pay the
fees and disbursements of counsel for the Holders in connection with any
registration begun pursuant to Section 2 if the registration request
subsequently is withdrawn at the request of the Holders of Registrable
Securities to be registered (in which case all participating Holders shall bear
such expenses pro rata), unless the Holders holding a majority of Registrable
Securities then outstanding agree to forfeit one (1) demand registration
pursuant to Section 2; provided further, however, that if at the time of such
withdrawal, (a) the Holders have learned of a material adverse change in the
condition (financial or otherwise), business or prospects of the Company from
that known to the Holders at the time of their request or (b) there has occurred
a material adverse change in marketing factors related to the sale of
Registrable
-8-
Securities to the public from those existing at the time of the Holders'
request, then the Holders shall not forfeit any demand registration rights and
shall retain their rights pursuant to Section 2.
7. Expenses of Company Registration. The Company shall bear and pay
all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 3 for each Holder, including without limitation all
registration, filing and qualification fees, printers' and accounting fees
relating or apportionable thereto and the fees and disbursements of one counsel
for the selling Holders (selected by the Holders of a majority of the
Registrable Securities being registered), but excluding underwriting discounts
and commissions relating to Registrable Securities.
8. Underwriting Requirements. In connection with any offering
involving an underwriting of shares being issued by the Company, the Company
shall not be required under Section 3 to include any of the Holders' securities
in such underwriting unless they accept the terms of the underwriting as agreed
upon between the Company and the underwriters selected by it; provided, however,
that no Holder participating in such underwriting shall be required to make any
representations or warranties except as they relate to such Holder's ownership
of shares and authority to enter into the underwriting agreement and to such
Holder's intended method of distribution, and the liability of such Holder
shall be limited to an amount equal to the net proceeds from the offering
received by such Holder. If the total amount of securities, including
Registrable Securities, requested by shareholders to be included in such
offering exceeds the amount of securities to be sold (other than by the Company)
that the underwriters reasonably believe compatible with the success of the
offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, which the
underwriters believe will not jeopardize the success of the offering; provided,
that, the number of remaining shares to be included in the underwriting shall
be allocated (i) first to the Investors participating in such underwriting, (ii)
then to Holders of Registrable Securities, and (ii) thereafter among all other
remaining selling shareholders.
9. Indemnification. In the event any Registrable Securities are
included in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, its heirs, personal representatives and assigns,
each of such Holder's partners and members, and each of such Holder's partners'
and members' officers, directors, employees and affiliates, any underwriter (as
defined in the Securities Act) for such Holder and each Person, if any, who
controls such Holder or underwriter within the meaning of the Securities Act or
the Exchange Act against any losses, claims, damages or liabilities (joint or
several) to which they may become subject under the Securities Act, the Exchange
Act or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon a
Violation (provided,
-9-
however, that the Company will not be required to indemnify any of the foregoing
Persons on account of any losses, claims, damages or liabilities arising from a
Violation if and to the extent that such Violation was made in a preliminary
prospectus and was corrected in a subsequent prospectus that was required by law
to be delivered to the Person making the claim with respect to which
indemnification is sought hereunder (and such subsequent prospectus was made
available by the Company to permit delivery of such prospectus in a timely
manner), and such subsequent prospectus was not so delivered to such Person);
and the Company will pay to each such indemnified party, as incurred, any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this Section 9(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case to a particular indemnified party for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by or on behalf of such indemnified party.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each Person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter,
any other Holder selling securities in such registration statement and any
controlling Person of any such underwriter or other Holder, against any losses,
claims damages or liabilities (joint or several) to which any of the foregoing
Persons may become subject, under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon Violation, in each
case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by or on
behalf of such Holder expressly for use in connection with such registration;
and each such Holder will pay, as incurred, any legal or other expenses
reasonably incurred by any Person intended to be indemnified pursuant to this
Section 9(b), in connection with investigating or defending any such loss,
claim, damage, liability, or action; provided, however, that the indemnity
agreement contained in this Section 9(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder, which consent shall
not be unreasonably withheld; and provided further, that, in no event shall the
liability of any Holder under this Section 9(b) exceed the net proceeds from the
offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under the Section 9, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in,
-10-
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the fees
and expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the indemnifying party
under this Section 9 except if, and only to the extent that, the indemnifying
party is actually prejudiced thereby; and such failure to deliver written notice
to the indemnifying party will not relieve it of any liability that it may have
to any indemnified party otherwise than under this Section 9.
(d) The obligations of the Company and Holders under this
Section 9 shall survive the completion of any offering of Registrable Securities
in a registration statement under this Agreement and otherwise.
(e) Any indemnity agreements contained herein shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any investigation made or
omitted by or on behalf of any indemnified party.
(f) If for any reason the foregoing indemnity is unavailable,
then the indemnifying party shall contribute to the amount paid or payable by
the indemnified party as a result of such losses, claims, damages, liabilities
or expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and the
indemnified party on the other or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law or provides a lesser sum to the
indemnified party than the amount hereinafter calculated, in such proportion as
is appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other but
also the relative fault of the indemnifying party and the indemnified party as
well as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by or on behalf of the
indemnifying party or the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or 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 who was not guilty of such fraudulent
misrepresentation. Notwithstanding anything to the contrary in this Section 9,
no Holder shall be required, pursuant to this Section 9, to contribute any
amount in excess of the net proceeds received by such indemnifying party from
the sale of Registrable Securities in the offering to which the losses, claims,
damages,
-11-
liabilities or expenses of the indemnified party relate.
10. Reports Under the Exchange Act. With a view to making available
to the Holders the benefits of Rule 144 under the Securities Act and any other
rule or regulation of the SEC that may at any time permit a Holder to sell
securities of the Company to the public without registration or pursuant to a
registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date of the first registration statement filed by the
Company for the offering of its securities to the general public.
(b) uses its commercially reasonable efforts to take such action
as is necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities;
(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144 under
the Securities Act (at any time after the effective date of the first
registration statement filed by the Company), the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), or that it qualifies as a registrant whose securities may be
resold pursuant to Form S-3 (at any time it so qualifies), (ii) a copy of the
most recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested in availing any Holder of any rule or regulation of the SEC
which permits the selling of any such securities without registration or
pursuant to such form.
11. Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Agreement may be
assigned in whole or in part by a Holder, provided that such assignee delivers
to the Company a written instrument by which such assignee agrees to be bound by
the obligations imposed on Holders under (i) this Agreement to the same extent
as if such assignee was a party hereto, and (ii) the Stockholders Rights
Agreement to the same extent as if such transferee or assignee was a party
thereto.
12. Limitations on Subsequent Registration Rights. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of the Holders owning in the aggregate at least a majority of the Registrable
Securities enter into any agreement with any holder or prospective holder of any
securities of the Company
-12-
which would allow such holder or prospective holder (a) to include such
securities in any registration filed under this Agreement, unless under the
terms of such agreement, such holder or prospective holder may include such
securities in any such registration only to the extent that the inclusion of
such Holder's securities will not reduce the amount of the Registrable
Securities of the Holders which is included or (b) to request a registration.
13. "Market Stand-Off" Agreement". Each Holder hereby agrees that,
during the period of ninety (90) days following the effective date of a
registration statement of the Company filed under the Securities Act in
connection with an underwritten offering, it shall not, to the extent requested
by the Company and such underwriter, sell or otherwise transfer or dispose of
(other than to donees or partners who agree to be similarly bound) any
Registrable Securities held by it except Registrable Securities included in such
registration; provided, however, that:
(a) such agreement shall be applicable only to a registration
statement initiated by the Company which covers shares of Common Shares or other
securities of the Company to be sold on its behalf to the public in an
underwritten offering; and
(b) all officers and directors of the Company and all other
Persons with registration rights (whether or not pursuant to this Agreement)
enter into similar agreements.
14. Amendment; Waiver. In connection with the granting of
registration rights to any other Person as contemplated under Section 12 hence,
any provision of this Agreement may be amended in connection therewith only with
the written consent of the Company and the Holders of a majority of the
Registrable Securities then outstanding. In all other instances, any provision
of this Agreement may be amended only with the written consent of the Holders
owning in the aggregate at least a majority of the Registrable Securities held
by all Holders. The observance of any provision of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the party to be charged. Any
amendment or waiver effected in accordance with this Section 14 shall be binding
upon each holder of Registrable Securities at the time outstanding, each future
holder of all such securities, and the Company.
15. Changes in Registrable Securities. If, and as often as, there are
any changes in the Registrable Securities by way of stock split, stock divided,
combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions of this Agreement, as may be
required, so that the rights and privileges granted hereby shall continue with
respect to the Registrable Securities as so changed. Without limiting the
generality of the foregoing, the Company will require any successor by merger or
consolidation to assume and agree to be bound by the terms of this Agreement, as
a condition to any such merger or
-13-
consolidation.
16. Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the subject matter
hereof. Nothing in this Agreement, express or implied, is intended to confer
upon any Person, other than the parties hereto and their respective successors
and assign, any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, except as expressly provided herein.
17. Governing Law. This Agreement shall be governed in all respects
by the laws of the State of Delaware, without regard to the conflicts of laws
provisions thereof.
18. Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
19. Notices. All notices under this Agreement shall be in writing and
shall be deemed to have been delivered personally, or, if sent by an overnight
delivery service maintaining records of receipt or by telecopier or other
electronic means of written communication, on the first business day after it is
sent. Notices shall be addressed as follows or to such other address as the
parties shall specify by written notice:
If to the Company:
Replicase, Inc.
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxxxx & Xxxxxxx
X.X. Xxx 0000
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 20044-7566
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to a Holder, to the address set forth on Schedule 1 attached
hereto.
-14-
20. Severability. Any invalidity, illegality or limitation on the
enforceability of this Agreement or any part thereof, by any party whether
arising by reason of the law of the respective party's domicile or otherwise,
shall in no way affect or impair the validity, legality or enforceability of
this Agreement with respect to other parties. If any provision of this
Agreement shall be judicially determined to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
21. Title and Subtitles. The titles of the Sections of this
Agreement are for convenience of reference only and are not be considered in
construing this Agreement.
22. Delays or Omissions; Remedies Cumulative. It is agreed that no
delay or omission to exercise any right, power or remedy accruing to the
parties, upon any breach or default of the Company under this Agreement, shall
impair any such right, power or remedy, nor shall it be construed to be a waiver
of any such breach or default, or any acquiescence therein, or of any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. It is further agreed that any waiver, permit, consent
or approval of any kind or character by a party of any breach or default under
this Agreement, or any waiver by a party of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in writing and that all remedies, either under this
Agreement, or by law or otherwise afforded to a party, shall be cumulative and
not alternative.
23. Attorneys' Fees. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
24. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
-15-
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date and year first above written.
REPLICASE, INC.
By: /s/ Xxxx Xxxxxx
---------------------------------
Xxxx Xxxxxx
President & CEO
PURCHASERS
-------------------------------------
Name
-16-
