Exhibit 99.7
AMENDED AND RESTATED REGISTRATION AGREEMENT
DATED AS OF SEPTEMBER 30, 2003
AMONG
VITALSTREAM HOLDINGS, INC.
AND THE
COMMON STOCKHOLDERS,
PREFERRED STOCKHOLDERS,
CONVERTIBLE NOTEHOLDERS
AND
WARRANT HOLDERS
OF
VITALSTREAM HOLDINGS, INC. REFERRED TO HEREIN
TABLE OF CONTENTS
1. DEFINITIONS........................................................... 2
2. DEMAND REGISTRATIONS.................................................. 3
3. PIGGYBACK REGISTRATIONS............................................... 6
4. HOLDBACK AGREEMENTS................................................... 7
5. REGISTRATION PROCEDURES............................................... 7
6. REGISTRATION EXPENSES................................................. 9
7. INDEMNIFICATION....................................................... 10
8. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS........................... 12
9. MISCELLANEOUS......................................................... 12
AMENDED AND RESTATED REGISTRATION AGREEMENT
This AMENDED AND RESTATED REGISTRATION AGREEMENT, dated as of
September 30, 2003, 2003 (this "Agreement"), by and among VitalStream Holdings,
Inc., a Nevada corporation (the "Company"), the holders of Common Stock listed
on the Schedule of Common Stockholders attached hereto (including such other
holders of Common Stock who may from time to time become parties hereto after
the date hereof and be listed on the Schedule of Common Stockholders) (the
"Common Stockholders"), the holders of Preferred Stock listed on the Schedule of
Preferred Stockholders attached hereto (including such other holders of
Preferred Stock who may from time to time become parties hereto after the date
hereof and be listed on the Schedule of Preferred Stockholders) (the "Preferred
Stockholders"), the holders of Convertible Notes listed on the Schedule of
Convertible Noteholders attached hereto (including such other holders of
Convertible Notes who may from time to time become parties hereto after the date
hereof and be listed on the Schedule of Convertible Noteholders attached hereto)
(the "Convertible Noteholders"), and the holders of Warrants listed on the
Schedule of Warrant Holders attached hereto (including such other holders of
Warrants who may from time to time become parties hereto after the date hereof
and be listed on the Schedule of Warrant Holders attached hereto) (the "Warrant
Holders").
WHEREAS, reference is made to that certain Amended and
Restated Asset Purchase Agreement, dated as of January 15, 2003 (as amended and
modified from time to time, the "Asset Purchase Agreement"), by and among the
Company, VitalStream Broadcasting Corporation (the "Buyer"), Epoch Hosting, Inc.
("Hosting") and Epoch Networks, Inc. ("Networks") pursuant to which the Buyer
acquired substantially all of the assets and assumed certain liabilities used in
the conduct by Hosting and Networks of their Hosting Businesses (as defined in
the Asset Purchase Agreement) in consideration for the issuance of shares of
Common Stock by the Company to Hosting.
WHEREAS, reference is made to that certain Securities Exchange
and Purchase Agreement, dated as of September 30, 2003 (as amended and modified
from time to time, the "Exchange and Purchase Agreement"), by and among the
Company and the purchasers referred to therein pursuant to which the Company
issued to the purchasers Preferred Stock, Convertible Notes and Warrants.
WHEREAS, to induce the parties hereto to consummate the
transactions contemplated by the Exchange and Purchase Agreement, the Company
has agreed to enter into this Agreement for the purposes of providing for
registration rights for Common Stock held by the other parties hereto.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. Except as defined in this Section 1 or
unless otherwise indicated herein, capitalized terms used in this Agreement have
the meanings ascribed to them in the Exchange and Purchase Agreement.
"Asset Purchase Agreement" has the meaning set forth in the
recitals to this Agreement.
"Commitment Fee" means the shares of Common Stock issued as
the "Commitment Fee" pursuant to the Initial Note Purchase Agreement and the
Subsequent Note Purchase Agreement.
"Common Stock" means the Common Stock, par value $0.001 per
share, of the Company as more fully described in the certificate of
incorporation of the Company.
"Convertible Notes" means those certain Amended and Restated
Convertible Promissory Notes of the Company issued pursuant to the Exchange and
Purchase Agreement.
"Dolphin" means Dolphin Fund I and Dolphin Fund II.
"Dolphin Communications" means Dolphin Communications Fund,
L.P.
"Dolphin Communications II" means Dolphin Communications Fund
II, L.P.
"Dolphin Fund" means Dolphin Communications and Dolphin
Parallel.
"Dolphin Fund II" means Dolphin Communications II and Dolphin
Parallel II.
"Dolphin Holders" means Dolphin and any transferee of Dolphin
or any Affiliate of Dolphin that holds Registrable Securities and is a party to
this Agreement.
"Dolphin Parallel" means Dolphin Communications Parallel Fund,
L.P.
"Dolphin Parallel II" means Dolphin Communications Parallel
Fund II (Netherlands), L.P.
"Initial Note Purchase Agreement" means that certain
Convertible Note and Warrant Purchase Agreement, dated as of November 1, 2002,
by and among the Company and the Purchasers which were party thereto.
"Preferred Stock" means those certain shares of 2003 Series A
Preferred Stock, $.001 par value, of the Company issued or issuable pursuant to
the Exchange and Purchase Agreement and those certain shares of 2003 Series B
Preferred Stock, $.001 par value, of the Company issued or issuable upon
conversion of the Convertible Notes.
"Registrable Securities" means (a) the Common Stock issued as
payment of the Commitment Fee, (b) any Common Stock issued or issuable to
Hosting pursuant to the Asset Purchase Agreement, (c) any Common Stock issued or
issuable, directly or indirectly, upon conversion of the Convertible Notes, (d)
any Common Stock issued or issuable, directly or
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indirectly, upon exercise of the Warrants, (e) any Common Stock issued or
issuable, directly or indirectly, upon conversion of the Preferred Stock, and
(f) any capital stock or other Equity Securities issued or issuable directly or
indirectly with respect to the Common Stock referred to in clauses (a), (b),
(c), (d) or (e) above by way of stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Registrable Securities, such Registrable
Securities shall cease to be Registrable Securities, when (i) they have been
distributed to the public pursuant to an offering registered under the
Securities Act or sold to the public through a broker, dealer or market maker in
compliance with Rule 144 under the Securities Act (or any similar rule then in
force), or (ii) the holder of such Registrable Securities can sell all, but not
less than all, of the Registrable Securities held by such holder to the public
through a broker, dealer or market maker in compliance with Rule 144 under the
Securities Act (or any similar rule then in force) without exceeding such volume
limitations under such rule. For purposes of this Agreement, a Person shall be
deemed to be a holder of Registrable Securities, and such Registrable Securities
shall be deemed to be in existence, whenever such Person has the right to
acquire directly or indirectly such Registrable Securities (upon conversion or
exercise in connection with a transfer of securities or otherwise, but
disregarding any restrictions or limitations upon the exercise of such right),
whether or not such acquisition has actually been effected, and such Person
shall be entitled to exercise the rights of a holder of Registrable Securities
hereunder. In addition, for purposes of this Agreement, any Person who holds
Registrable Securities as a result of a transfer of Registrable Securities
permitted by this Agreement and the Exchange and Purchase Agreement shall be
deemed to be the holder of Registrable Securities.
"Registration Expenses" shall have the meaning set forth in
Section 6(a).
"Subsequent Note Purchase Agreement" means that certain
Amended and Restated Convertible Note and Warrant Purchase Agreement dated
January 15, 2003, by and among the Company and the Purchasers which were party
thereto, which amended and restated the Initial Note Purchase Agreement.
"Warrants" means the Additional Warrants and the Amended and
Restated Warrants issued pursuant to the Exchange and Purchase Agreement.
2. Demand Registrations.
(a) Requests for Registration. (i) At any time and from
time to time after the first anniversary of the Closing Date (as defined in the
Exchange and Purchase Agreement), the Dolphin Holders owning a majority of the
Registrable Securities held by all Dolphin Holders may request registration
under the Securities Act of all or any portion of their Registrable Securities
on Form S-1 or any similar long-form registration ("Long-Form Registrations"),
and (ii) at any time and from time to time after the first anniversary of the
Closing Date (as defined in the Exchange and Purchase Agreement), the holders of
a majority of the Registrable Securities held by all Dolphin Holders may request
registration under the Securities Act of all or any portion of their Registrable
Securities on Form S-2 or S-3 or any similar short-form registration
("Short-Form Registrations"), if available; provided, however, that respect to
Section 2(a)(i) and Section 2(a)(ii) above, in the event the Company files with
the Securities and Exchange Commission a registration statement requesting
registration of securities (other than any post-
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effective amendment to any registration statement filed by the Company prior to
the date hereof; provided that such post-effective amendment does not increase
the number of shares of Common Stock registered by such registration statement)
(whether on behalf of itself or any third Person), the limitation on
registration requests until the first anniversary of the Closing Date (as
defined in the Exchange and Purchase Agreement) set forth in Section 2(a)(i) and
Section 2(a)(ii) above shall immediately cease and the Dolphin Holders owning a
majority of the Registrable Securities held by all Dolphin Holders may request
registration under the Securities Act in accordance with the provisions of this
Agreement. All registrations requested pursuant to this Section 2(a) are
referred to herein as "Demand Registrations". Each request for a Demand
Registration shall specify the approximate number of Registrable Securities
requested to be registered (which shall be no fewer than the lesser of (i)
Registrable Securities with a Market Price of $3,000,000, or (ii) 25% of the
outstanding Registrable Securities), the anticipated per share price range for
such offering and the intended method of distribution. Within ten (10) days
after receipt of any such request, the Company shall give written notice of such
requested registration to all other holders of Registrable Securities and,
subject to the terms of Section 2(d) hereof, shall include in such registration
(and in all related registrations and qualifications under state blue sky laws
or in compliance with other registration requirements and in any related
underwriting) all Registrable Securities with respect to which the Company has
received written requests for inclusion therein within fifteen (15) days after
the receipt of the Company's notice.
(b) Long-Form Registrations. The Dolphin Holders shall be
entitled to request two (2) Long-Form Registrations in which the Company shall
pay all Registration Expenses. A registration shall not count as one of the
permitted Long-Form Registrations until it has become effective, and any
Long-Form Registration shall not count as one of the permitted Long-Form
Registrations unless the holders of Registrable Securities are able to register
and sell at least 90% of the Registrable Securities requested to be included in
such registration; provided that in any event the Company shall pay all
Registration Expenses in connection with any registration initiated as a
Long-Form Registration whether or not it has become effective and whether or not
such registration has counted as one of the permitted Long-Form Registrations.
All Long-Form Registrations shall be underwritten registrations.
(c) Short-Form Registrations. In addition to the
Long-Form Registrations provided pursuant to Section 2(b), the Dolphin Holders
shall be entitled to request an unlimited number of Short-Form Registrations in
which the Company shall pay all Registration Expenses. Demand Registrations
shall be Short-Form Registrations whenever the Company is permitted to use any
applicable short form and if the managing underwriters (if any) agree to the use
of a Short-Form Registration. The Company shall use its best efforts to make
Short-Form Registrations on Form S-3 available for the sale of Registrable
Securities.
(d) Priority on Demand Registrations. The Company shall
not include in any Demand Registration any securities which are not Registrable
Securities without the prior written consent of the holders of at least a
majority of the Registrable Securities initially requesting such registration.
If a Demand Registration is an underwritten offering and the managing
underwriters advise the Company in writing that in their opinion the number of
Registrable Securities and, if permitted hereunder, other securities requested
to be included in such offering exceeds the number of Registrable Securities and
other securities, if any, which can be sold in an orderly manner in such
offering within a price range acceptable to the holders of a majority of
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the Registrable Securities initially requesting registration, the Company shall
include in such registration prior to the inclusion of any securities which are
not Registrable Securities, the number of Registrable Securities requested to be
included which in the opinion of such underwriters can be sold in an orderly
manner within the price range of such offering, pro rata among the respective
holders thereof on the basis of the amount of Registrable Securities owned by
each such holder.
(e) Restrictions on Long-Form Registrations. The Company
shall not be obligated to effect any Demand Registration within 180 days after
the effective date of a previous Demand Registration. The Company may postpone
for up to 180 days the filing or the effectiveness of a registration statement
for a Demand Registration if the Company's board of directors determines in its
reasonable good faith judgment that such Demand Registration would reasonably be
expected to have a material adverse effect on any proposal or plan by the
Company or any of its Subsidiaries to engage in any acquisition of assets (other
than in the Ordinary Course of Business) or any merger, consolidation, tender
offer, reorganization or similar transaction; provided that in such event, the
holders of Registrable Securities initially requesting such Demand Registration
shall be entitled to withdraw such request and, if such request is withdrawn,
such Demand Registration shall not count as one of the permitted Demand
Registrations hereunder and the Company shall pay all Registration Expenses in
connection with such registration. The Company may delay a Demand Registration
hereunder only once in any twelve-month period.
(f) Selection of Underwriters. Within thirty (30) days
following submission of a request for registration pursuant to this Agreement,
the Company shall choose the managing underwriter administering the offering of
any Registrable Securities registered pursuant to this Agreement, which managing
underwriter shall be a nationally recognized or regionally recognized investment
bank. In the event that the Company fails to choose the managing underwriter
within such thirty (30) period, the holders of a majority of the Registrable
Securities initially requesting registration hereunder shall have the right to
select the managing underwriter to administer the offering.
(g) Other Registration Rights. The Company represents and
warrants that, except for the agreements disclosed in Section 7B(ii) of the
Schedules to the Exchange and Purchase Agreement (the "Other Registration Rights
Agreements"), it is not a party to, or otherwise subject to, any other agreement
granting registration rights to any other Person with respect to any securities
of the Company. Except as provided in this Agreement, the Company shall not
grant to any Person the right to request the Company to register any Equity
Securities of the Company, or any securities convertible or exchangeable into or
exercisable for Equity Securities of the Company, without the prior written
consent of the holders of at least a majority of the Registrable Securities held
by all Dolphin Holders; provided that the Company may grant rights to other
Persons to (i) participate in Piggyback Registrations so long as such rights are
subordinate to the rights of the holders of Registrable Securities with respect
to such Piggyback Registrations as set forth in Section 3(c) and Section 3(d)
hereof and (ii) request registrations so long as the holders of Registrable
Securities are entitled to participate in any such registrations with such
Persons pro rata on the basis of the number of shares owned by each such holder.
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3. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to
register any of its securities under the Securities Act (other than pursuant to
a Demand Registration) and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the Company
shall give prompt written notice to all holders of Registrable Securities of its
intention to effect such a registration and, subject to the terms of Section
3(c) and Section 3(d) hereof, shall include in such registration (and in all
related registrations or qualifications under blue sky laws or in compliance
with other registration requirements and in any related underwriting) all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within twenty (20) days after the receipt of the
Company's notice.
(b) Piggyback Expenses. The Registration Expenses of the
holders of Registrable Securities specified in Section 6(a) and the registration
expenses specified in Section 6(b) shall be paid by the Company in all Piggyback
Registrations.
(c) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering without adversely
affecting the marketability of the offering, the Company shall include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, the Registrable Securities requested to be included in such
registration, pro rata among the holders of such Registrable Securities on the
basis of the number of shares owned by each such holder, and (iii) third, other
securities requested to be included in such registration.
(d) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in an orderly manner
in such offering within a price range acceptable to the holders initially
requesting such registration, the Company shall include in such registration (i)
first, the securities requested to be included therein by the holders requesting
such registration and the Registrable Securities requested to be included in
such registration, pro rata among the holders of such securities on the basis of
the number of securities so requested to be included therein, and (ii) second,
other securities requested to be included in such registration.
(e) Selection of Underwriters. If any Piggyback
Registration is an underwritten offering, the selection of investment banker(s)
and manager(s) for the offering must be approved by the holders of a majority of
the Registrable Securities held by all Dolphin Holders included in such
Piggyback Registration. Such approval shall not be unreasonably withheld or
delayed.
(f) Other Registrations. Unless required to do so by the
terms of one or more of the Other Registration Rights Agreements, if the Company
has previously filed a registration statement with respect to Registrable
Securities pursuant to Section 2 or pursuant to this Section
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3, and if such previous registration has not been withdrawn or abandoned, the
Company shall not file or cause to be effected any other registration of any of
its Equity Securities or securities convertible or exchangeable into or
exercisable for its Equity Securities under the Securities Act (except on Form
S-8 or any successor form), whether on its own behalf or at the request of any
holder or holders of such securities, until a period of at least one 180 days
has elapsed from the effective date of such previous registration.
4. Holdback Agreements.
(a) Each holder of Registrable Securities shall not
effect any public sale or distribution (including sales pursuant to Rule 144) of
Equity Securities of the Company during the seven (7) days prior to and the
ninety (90) day period beginning on the effective date of any underwritten
Demand Registration (except as part of such underwritten registration), unless
the underwriters managing the registered public offering otherwise agree.
(b) The Company (i) shall not effect any public sale or
distribution of its Equity Securities, during the seven (7) days prior to and
during the ninety (90) day period beginning on the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration
(except as part of such underwritten registration or pursuant to registrations
on Form S-8 or any successor form), unless the underwriters managing the
registered public offering otherwise agree, and (ii) shall cause each holder of
its Common Stock, or any securities convertible into or exchangeable or
exercisable for Common Stock, purchased from the Company at any time after the
date of this Agreement (other than in a registered public offering or pursuant
to a right to purchase Common Stock existing on the date hereof) to agree not to
effect any public sale or distribution (including sales pursuant to Rule 144) of
any such securities during such period (except as part of such underwritten
registration, if otherwise permitted), unless the underwriters managing the
registered public offering otherwise agree.
5. Registration Procedures. Whenever the holders of
Registrable Securities have requested that any Registrable Securities be
registered pursuant to this Agreement, the Company shall use its best efforts to
effect the registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof and pursuant thereto
the Company shall as expeditiously as possible:
(a) prepare and file with the Securities and Exchange
Commission a registration statement, and all amendments and supplements thereto
and related prospectuses as may be necessary to comply with applicable
securities laws, with respect to such Registrable Securities and use its best
efforts to cause such registration statement to become effective (provided that
before filing a registration statement or prospectus or any amendments or
supplements thereto, the Company shall furnish to the counsel selected by the
holders of a majority of the Registrable Securities covered by such registration
statement copies of all such documents proposed to be filed, which documents
shall be subject to the review and comment of such counsel);
(b) notify each holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the Securities and Exchange Commission such amendments and supplements
to such registration statement and the
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prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than 180 days and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
(c) furnish to each seller of Registrable Securities such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (provided that the Company shall not be required
to (i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (ii) subject itself
to taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction);
(e) notify each seller of such Registrable Securities, 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 contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Company are
then listed and, if not so listed, to be listed on the NASD automated quotation
system, the OTC Bulletin Board or any successor to the OTC Bulletin Board;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the holders of a majority of the Registrable Securities held by all Dolphin
Holders being sold or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities (including
effecting a stock split or a combination of shares);
(i) make available for inspection by any seller of
Registrable Securities, any underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant or other
agent retained by any such seller or underwriter, all financial and
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other records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees and independent accountants
to supply all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration statement;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission, and
make available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; and
(k) permit any holder of Registrable Securities which
holder, in its sole and exclusive judgment, might be deemed to be an underwriter
or a controlling person of the Company, to participate in the preparation of
such registration or comparable statement and to require the insertion therein
of material, furnished to the Company in writing, which in the reasonable
judgment of such holder and its counsel should be included;
(l) in the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any common stock included in such registration statement for
sale in any jurisdiction, the Company shall use its best efforts promptly to
obtain the withdrawal of such order; and
(m) use its best efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the sellers thereof to consummate the disposition of such Registrable
Securities;
6. Registration Expenses.
(a) All expenses incident to the Company's performance of
or compliance with this Agreement, including without limitation all
registration, qualification and filing fees, fees and expenses of compliance
with securities or blue sky laws, printing expenses, messenger and delivery
expenses, fees and disbursements of custodians, and fees and disbursements of
counsel for the Company and all independent certified public accountants and
other Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), shall be borne as provided in this Agreement, except
that the Company shall, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit or
quarterly review, the expense of any liability insurance and the expenses and
fees for listing the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed or on the NASD
automated quotation system, the OTC Bulletin Board or any successor to the OTC
Bulletin Board, and the underwriting expenses (including discounts and
commissions of the Company but excluding discounts and commissions of any other
Person) with respect to Piggy Back Registrations in which the Company has
elected to engage an underwriter.
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(b) In connection with each Demand Registration and each
Piggyback Registration, the Company shall reimburse the holders of Registrable
Securities included in such registration for the reasonable fees and
disbursements of one counsel chosen by the holders of a majority of the
Registrable Securities held by all Dolphin Holders initially requesting such
registration (the "Dolphin Counsel") and for the reasonable fees and
disbursements of each additional counsel retained by any holder of Registrable
Securities for the purpose of rendering a legal opinion on behalf of such holder
in connection with any underwritten Demand Registration or Piggyback
Registration, provided, however, that the Company shall not be obligated to
reimburse (i) the holders with respect to the Dolphin Counsel for more than
$25,000 (and the counsels of all other holders for more than $10,000 in the
aggregate) in connection with any Demand Registration or Piggyback Registration
on Form S-1 or any similar long-form registration and (ii) the holders with
respect to the Dolphin Counsel for more than $13,000 (and the counsels of all
other holders for more than $5,000) in connection with any Demand Registration
or Piggyback Registration on Form S-2 or S-3 or any similar short-form
registration (provided that such Demand Registration or Piggyback Registration
on Form S-2 or S-3 does not involve the preparation of any registration
statement, prospectus or similar disclosure document containing substantially
the information generally set forth in a registration statement on Form S-1).
(c) To the extent Registration Expenses are not required
to be paid by the Company, each holder of securities included in any
registration hereunder shall pay those Registration Expenses allocable to the
registration of such holder's securities so included, and any Registration
Expenses not so allocable shall be borne by all sellers of securities included
in such registration in proportion to the aggregate selling price of the
securities to be so registered.
7. Indemnification.
(a) The Company agrees to indemnify, to the extent
permitted by law, each holder of Registrable Securities, its officers and
directors and each Person who controls such holder (within the meaning of the
Securities Act) against all losses, claims, actions, damages, liabilities and
expenses caused by (i) any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) any violation by the Company of any
rule or regulation promulgated under the Securities Act applicable to the
Company and relating to action or inaction required of the Company in connection
with any such registration, qualification or compliance, and to pay to each
holder of Registrable Securities, its officers and directors and each Person who
controls such holder (within the meaning of the Securities Act), as incurred,
any legal and any other expenses reasonably incurred in connection with
investigating, preparing or defending any such claim, loss, damage, liability or
action, except insofar as the same are caused by or contained in any information
furnished in writing to the Company by such holder expressly for use therein or
by such holder's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished such holder with a sufficient number of copies of the same. In
connection with an underwritten offering, the Company shall indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the
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Securities Act) to the same extent as provided above with respect to the
indemnification of the holders of Registrable Securities.
(b) In connection with any registration statement in
which a holder of Registrable Securities is participating, each such holder
shall furnish to the Company in writing such information and affidavits as the
Company reasonably requests for use in connection with any such registration
statement or prospectus and, to the extent permitted by law, shall indemnify the
Company, its directors and officers and each Person who controls the Company
(within the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses resulting from any untrue or alleged untrue statement
of material fact contained in the registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is contained in any information or
affidavit so furnished in writing by such holder; provided that the obligation
to indemnify shall be individual, not joint and several, for each holder and
shall be limited to the net amount of proceeds received by such holder from the
sale of Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder
shall (i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the failure to give
prompt notice shall not impair any Person's right to indemnification hereunder
to the extent such failure has not prejudiced the indemnifying party) and (ii)
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist with respect to such
claim, permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party shall not be subject to any liability for any
settlement made by the indemnified party without its consent (but such consent
shall not be unreasonably withheld). An indemnifying party who is not entitled
to, or elects not to, assume the defense of a claim shall not be obligated to
pay the fees and expenses of more than one counsel for all parties indemnified
by such indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim. In such instance, the conflicting indemnified parties shall have a right
to retain one separate counsel, chosen by the holders of a majority of the
Registrable Securities included in the registration, at the expense of the
indemnifying party. No indemnifying party, in the defense of such claim or
litigation, shall, except with the consent of each indemnified party, consent to
the entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
(d) The indemnification provided for under this Agreement
shall remain in full force and effect regardless of any investigation made by or
on behalf of the indemnified party or any officer, director or controlling
Person of such indemnified party and shall survive the transfer of securities.
The Company also agrees to make such provisions, as are reasonably requested by
any indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
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8. Participation in Underwritten Registrations. No
Person may participate in any registration hereunder which is underwritten
unless such Person (a) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Person or Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
9. Miscellaneous.
(a) No Inconsistent Agreements; Entire Agreement. The
Company shall not hereafter enter into any agreement with respect to its
securities which is inconsistent with or violates the rights granted to the
holders of Registrable Securities in this Agreement. Except as otherwise
expressly set forth herein, this Agreement embodies the complete agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
(b) Adjustments Affecting Registrable Securities. The
Company shall not take any action, or permit any change to occur, with respect
to its securities which would adversely affect the ability of the holders of
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement or which would adversely affect the
marketability of such Registrable Securities in any such registration
(including, without limitation, effecting a stock split or a combination of
shares); provided, however, notwithstanding anything to the contrary in this
Section 9(b), this Section 9(b) shall not prohibit the Company from effecting a
stock split or a reverse stock split at any time other than during the period
beginning on the date of filing of any registration statement required to be
filed by this Agreement and ending on the date that is 180 days after the
effectiveness of such registration statement.
(c) Remedies. Any Person having rights under any
provision of this Agreement shall be entitled to enforce such rights
specifically to recover damages caused by reason of any breach of any provision
of this Agreement and to exercise all other rights granted by law. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that, in addition to any
other rights and remedies existing in its favor, any party shall be entitled to
specific performance and/or other injunctive relief from any court of law or
equity of competent jurisdiction (without posting any bond or other security) in
order to enforce or prevent violation of the provisions of this Agreement.
(d) Successors and Assigns. All covenants and agreements
in this Agreement by or on behalf of any of the holders of Registrable
Securities may be transferred or assigned (but only with all related
obligations) by a holder of Registrable Securities to a transferee or assignee
of such Registrable Securities, provided: (i) such transferee or assignee shall
agree in writing to be bound by and subject to the terms and conditions of this
Agreement and (ii) such transfer or assignment shall be effective only upon the
receipt by the Company of written notice of such transfer or assignment.
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(e) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
shall constitute one and the same Agreement.
(f) Descriptive Headings; Interpretation. Section
headings used herein are for convenience only and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement. The use of the word "including" or any variation or derivative
thereof in this Agreement is by way of example rather than by limitation.
(g) Notices; Business Days. All notices, demands or other
communications to be given or delivered under or by reason of the provisions of
this Agreement shall be in writing and shall be deemed to have been given when
delivered personally to the recipient or when sent by facsimile followed by
delivery by reputable overnight courier service (charges prepaid), one day after
being sent to the recipient by reputable overnight courier service (charges
prepaid) or five days after being mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid. Any notice,
demand or other communication hereunder may be given by any other means
(including telecopy or electronic mail), but shall not be deemed to have been
duly given unless and until it is actually received by the intended recipient.
Such notices, demands and other communications shall be sent to (i) a
Convertible Noteholder at the address indicated on the Schedule of Convertible
Noteholders, (ii) a Warrant Holder at the address indicated on the Schedule of
Warrant Holders, (iii) a Common Stockholder at the address indicated on the
Schedule of Common Stockholders, (iv) a Preferred Stockholder at the address
indicated on the Schedule of Preferred Stockholders and (v) the Company at the
address indicated below:
Xxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Chief Operating Officer
and
Xxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy (which shall not constitute notice to the
Company) to:
Stoel Rives LLP
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
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or to such other address or to the attention of such other Person as the
recipient party has specified by prior written notice to the sending party. If
any time period for giving notice or taking action hereunder expires on a day
which is a Saturday, Sunday or legal holiday in the state in which the Company's
chief-executive office is located, the time period shall automatically be
extended to the business day immediately following such Saturday, Sunday or
legal holiday.
(h) Amendments and Waivers; Effectiveness and Binding
Nature of this Agreement. Except as otherwise provided herein, the provisions of
this Agreement may be amended or waived only upon the prior written consent of
(i) the Company and (ii) the Dolphin Holders owning a majority of the
Registrable Securities held by all Dolphin Holders. Notwithstanding the
foregoing, without the consent of any other Person, the Company may restate any
schedule hereto to (A) add additional Persons who become holders of Common
Stock, Preferred Stock, Convertible Notes or Warrants and execute and deliver a
counterpart to this Agreement or (B) change the address for notice to any Person
at such Person's request. The failure of any party to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms.
(i) Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
(j) No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
(k) GOVERNING LAW. THE CORPORATE LAW OF THE STATE OF
NEVADA HALL GOVERN ALL ISSUES AND QUESTIONS CONCERNING THE RELATIVE RIGHTS OF
THE COMPANY AND ITS SECURITYHOLDERS. ALL OTHER ISSUES AND QUESTIONS CONCERNING
THE CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR
PROVISIONS (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF NEW YORK. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF
NEW YORK SHALL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT,
EVEN THOUGH UNDER THAT JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS,
THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.
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(l) WAIVER OF RIGHT TO JURY TRIAL. THE COMPANY AND EACH
HOLDER OF REGISTRABLE SECURITIES HEREBY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY in any litigation in any court with respect to, in
connection with, or arising out of this Agreement or the validity, protection,
interpretation, collection or enforcement hereof; AND THE COMPANY AND EACH
HOLDER OF REGISTRABLE SECURITIES HEREBY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE RIGHT TO INTERPOSE ANY SETOFF OR COUNTERCLAIM OR CROSS-CLAIM
in connection with any such litigation, irrespective of the nature of such
setoff, counterclaim or cross-claim except to the extent that the failure so to
assert any such setoff, counterclaim or cross-claim would permanently preclude
the prosecution of or recovery upon same. THE COMPANY AGREES THAT THIS SECTION
9(l) IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND ACKNOWLEDGES THAT
THE HOLDERS OF REGISTRABLE SECURITIES WOULD NOT HAVE ENTERED INTO THIS AGREEMENT
IF THIS SECTION 9(l) WERE NOT PART OF THIS AGREEMENT.
(m) Termination of Prior Agreement. The Company, the
Common Stockholders, the Convertible Noteholders and certain of the Warrant
Holders entered into a Registration Agreement dated November 26, 2002 (the
"Prior Registration Agreement"). Upon the execution of this Agreement by each of
the parties to the Prior Registration Agreement, the Prior Registration
Agreement shall immediately and automatically terminate.
* * * * *
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IN WITNESS WHEREOF, the parties have executed this
Registration Agreement as of the date first written above.
VITALSTREAM HOLDINGS, INC.
By: ____________________________________
Name: Xxxx X. Xxxxxxx
Title: President
COMMON STOCKHOLDERS
DOLPHIN COMMUNICATIONS FUND II, L.P.
By: Dolphin Communications II, L.P.,
Its General Partner
By: Dolphin Communications, L.L.C.,
Its General Partner
By: _______________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
DOLPHIN COMMUNICATIONS PARALLEL FUND II
(NETHERLANDS), L.P.
By: Dolphin Communications II, L.P.,
Its General Partner
By: Dolphin Communications, L.L.C.,
Its General Partner
By: _______________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
COMMON STOCKHOLDERS (CONTINUED)
EPOCH HOSTING INC.
By: ____________________________________
Name:
Title:
[SIGNATURE PAGE TO REGISTRATION AGREEMENT]
CONVERTIBLE NOTEHOLDERS
(EACH OF WHICH IS ALSO A WARRANT HOLDER)
DOLPHIN COMMUNICATIONS FUND II, L.P.
By: Dolphin Communications II, L.P.,
Its General Partner
By: Dolphin Communications, L.L.C.,
Its General Partner
By: ________________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
DOLPHIN COMMUNICATIONS PARALLEL FUND II
(NETHERLANDS), L.P.
By: Dolphin Communications II, L.P.,
Its General Partner
By: Dolphin Communications, L.L.C.,
Its General Partner
By: ________________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
[SIGNATURE PAGE TO REGISTRATION AGREEMENT]
PREFERRED STOCKHOLDERS
(EACH OF WHICH IS ALSO A WARRANT HOLDER)
DOLPHIN COMMUNICATIONS FUND II, L.P.
By: Dolphin Communications II, L.P.,
Its General Partner
By: Dolphin Communications, L.L.C.,
Its General Partner
By: ________________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
DOLPHIN COMMUNICATIONS PARALLEL FUND II
(NETHERLANDS), L.P.
By: Dolphin Communications II, L.P.,
Its General Partner
By: Dolphin Communications, L.L.C.,
Its General Partner
By: ________________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
_________________________________________
Xxxxxx X. Xxxxxx, an individual
_________________________________________
Xxxxx X. Xxxxxx, an individual
_________________________________________
Xxxxxxx X. Xxxxx, an individual
[SIGNATURE PAGE TO REGISTRATION AGREEMENT]
_________________________________________
Xxxxx Xxxxx, an individual
_________________________________________
Xxxxxx Xxxx, an individual
SCHEDULE OF COMMON STOCKHOLDERS
Dolphin Communications Fund II, L.P.
Dolphin Communications Parallel Fund II (Netherlands), L.P.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice to the Dolphin) to:
Xxxxxxxx & Xxxxx
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
Epoch Hosting, Inc.
c/o Dolphin Equity Partners, L.P.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
SCHEDULE OF CONVERTIBLE NOTEHOLDERS
Dolphin Communications Fund II, L.P.
Dolphin Communications Parallel Fund II (Netherlands), L.P.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice to the Dolphin) to:
Xxxxxxxx & Xxxxx
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
SCHEDULE OF PREFERRED STOCKHOLDERS AND WARRANTHOLDERS
Dolphin Communications Fund II, L.P.
Dolphin Communications Parallel Fund II (Netherlands), L.P.
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice to the Dolphin) to:
Xxxxxxxx & Xxxxx
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
Xxxxxx X. Xxxxxx
0 Xxxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Xxxxx Xxxxx
0000 X. Xxxxxx Xxxxxx
Xxxxx Xxx, XX 00000
Telephone: (000) 000-0000
Xxxxx Xxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Xxxxxxx X. Xxxxx
0 Xxxxxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Xxxxxx Xxxx
00000 Xxxxx Xxxxx Xxxx
Xxxxxx Xxxxx Xxxxxx, XX 00000
Telephone: (000) 000-0000
