Exhibit 10.4
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WARRANT PURCHASE AGREEMENT
between
NAVISITE, INC.,
SPCP GROUP, L.L.C.
and
SPCP GROUP III LLC
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Dated as of April 11, 2006
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TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS.................................................... 1
1.1 Definitions..................................................... 1
1.2 Rules of Construction........................................... 4
ARTICLE 2 PURCHASE AND SALE OF WARRANTS.................................. 4
2.1 Purchase and Sale of Warrants................................... 5
2.2 Closing; Conditions to Purchase of Warrant...................... 5
ARTICLE 3 REPRESENTATIONS AND WARRANTIES................................. 5
3.1 Representations and Warranties of the Company................... 5
ARTICLE 4 REGISTRATION RIGHTS............................................ 7
4.1 Demand Registration Rights...................................... 7
4.2 Piggyback Registrations......................................... 9
4.3 Registration Procedures......................................... 10
4.4 Registration Expenses........................................... 14
4.5 Indemnification................................................. 15
4.6 Participation in Underwritten Registrations..................... 17
4.7 Listing......................................................... 17
4.8 Rule 144........................................................ 17
4.9 Shareholder Approval............................................ 17
4.10 Lock-Up......................................................... 17
ARTICLE 5 MISCELLANEOUS.................................................. 18
5.1 Survival of Representations and Warranties...................... 18
5.2 Notices......................................................... 18
5.3 Successors and Assigns.......................................... 19
5.4 Amendment and Waiver............................................ 19
5.5 Counterparts.................................................... 19
5.6 Headings; Table of Contents..................................... 19
5.7 Governing Law................................................... 19
5.8 Waiver of Jury Trial............................................ 20
5.9 Severability.................................................... 20
5.10 Entire Agreement................................................ 20
EXHIBITS
A Form of Warrant
B NaviSite Amended and Restated 2003 Stock Incentive Plan, as amended
WARRANT PURCHASE AGREEMENT
WARRANT PURCHASE AGREEMENT, dated as of April 11, 2006 (this
"Agreement"), between NAVISITE, INC., a Delaware corporation (the "Company"),
SPCP GROUP, L.L.C., a Delaware limited liability corporation ("SPCP Group"), and
SPCP GROUP III LLC, a Delaware limited liability corporation ("SPCP Group III",
collectively with SPCP Group, "Silver Point").
WHEREAS, in connection with the execution and delivery of the Credit
and Guaranty Agreement (as defined below), the Company will issue to SPCP Group
and SPCP Group III warrants to purchase an aggregate of 3,514,933 shares of the
common stock, par value $0.01 per share, of the Company (the "Common Stock") at
a purchase price of $0.01 per share, pursuant to the terms and subject to the
conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used in this Agreement the following terms have
the meanings indicated:
"Affiliate" of, or a Person "Affiliated" with, a specified Person
means any other Person directly or indirectly controlling, controlled by, or
under common control with, that Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power (i) to vote 5% or
more of the Securities having ordinary voting power for the election of
directors of such Person, or (ii) to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities or by contract or otherwise. Notwithstanding anything to the contrary
herein, in no event shall any Agent or Lender be considered an "Affiliate" of
any Credit Party.
"Agreement" shall have the meaning assigned to such term in the
preamble.
"Business Day" means any day that is not a Saturday or Sunday or a day
on which banks are required or permitted to be closed in the State of New York.
"Closing" shall have the meaning assigned to such term in Section 2.2.
"Closing Date" shall have the meaning assigned to such term in Section
2.2.
"Company" means NaviSite, Inc., a Delaware corporation, and any
successor corporation.
"Contracts" means all agreements, contracts, leases and subleases,
purchase orders, arrangements, commitments, non-governmental licenses, notes,
bonds, mortgages, indentures or other obligations or other understandings
(whether written or oral) (including amendments and supplements, modifications
and side letters or agreements).
"Conversion Cap" shall have the meaning assigned to such term in
Section 4.13 of the Warrant.
"Credit Agreement" means that certain Credit and Guaranty Agreement,
dated as of the date hereof, as amended, modified, supplemented or restated from
time to time, by and among the Company, the Guarantors party thereto, the
Lenders from time to time party thereto, and Silver Point, as Administrative
Agent for the Lenders.
"Demanding Holder" shall have the meaning assigned to such term in
Section 4.1(b).
"Demand Registration" shall have the meaning assigned to such term in
Section 4.1(b).
"Dollar", "Dollars" and the symbol "$" shall mean lawful money of the
United States of America.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Governmental Entity" means any federal, state, municipal, national or
other government, governmental department, commission, board, bureau, court,
agency or instrumentality or political subdivision thereof or any entity or
officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a state of the United States, the United
States, or a foreign entity or government.
"Holder" means with respect to any Warrant or share of Warrant Stock,
the Person in whose name the Warrant or Warrant Stock is registered on the books
of the Company maintained for such purpose.
"Lien" means (i) any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement, and
any lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing, and (ii) in the
case of Securities, any purchase option, call or similar right of a third party
with respect to such Securities.
"Material Adverse Effect" means any material adverse effect on (i) the
Securities, (ii) the ability of the Company or Silver Point to perform their
respective obligations under any Transaction Agreement, or (iii) the business
operations, properties, assets, condition (financial or otherwise) or prospects
of Company and its Subsidiaries taken as a whole
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"Maximum Number of Shares" shall have the meaning assigned to such
term in Section 4.1(e).
"Original Warrants" means the Warrants originally issued by the
Company pursuant to this Agreement.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Entities.
"Piggyback Registration" shall have the meaning assigned to such term
in Section 4.2(a).
"Prospectus" means the prospectus or prospectuses included in any
Registration Statement, as amended or supplemented by any prospectus supplement
with respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and by all other amendments
and supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus or prospectuses.
"Registrable Securities" means the Common Stock of the Company owned
by the Holders, whether owned on the date hereof or acquired hereafter pursuant
to the exercise of this Warrant; provided, however, Registrable Securities shall
not include any securities sold by a Person to the public either pursuant to an
effective Registration Statement or Rule 144.
"Registration Expenses" shall have the meaning assigned to such term
in Section 4.4(a).
"Registration Statement" means any registration statement of the
Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all materials incorporated by reference in such Registration
Statement.
"Requesting Holder" shall have the meaning assigned to such term in
Section 4.1(a).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder, all as the same shall be in effect
at the time.
"Shareholder Approval" means the approval by the shareholders of the
Company of the issuance of the Warrant for the purpose of terminating the
Conversion Cap.
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"Shelf Registration Statement" shall have the meaning assigned to such
term in Section 4.1(a).
"Suspension Notice" shall have the meaning assigned to such term in
Section 4.3(f).
"Transaction Agreements" means collectively, this Agreement and the
Warrant.
"underwritten registration" or "underwritten offering" means a
registration in which securities of the Company are sold to underwriters for
reoffering to the public.
"Warrant" means the Original Warrants and all Warrants issued upon
transfer, division or combination of, or in substitution for, the Original
Warrants, or any other Warrant subsequently issued to the Holder. All Warrants
shall at all times be identical as to terms and conditions, except as to the
number of shares of Warrant Stock for which they may be exercised and their date
of issuance.
"Warrant Stock" means the shares of Common Stock issued, issuable or
both (as the context may require) upon the exercise of Warrants.
1.2 Rules of Construction.
(a) Unless otherwise specified, references in this Agreement (or
any of its Exhibits, Annexes, Appendices or Schedules) to a Section, subsection
or clause refer to such Section, subsection or clause as contained in this
Agreement. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole, including all Exhibits,
Annexes, Appendices and Schedules, as the same may from time to time be amended,
restated, modified or supplemented, and not to any particular section,
subsection or clause contained in this Agreement or any such Exhibit, Annex,
Appendix or Schedule. Unless set forth specifically otherwise, all amounts
referenced in the Transaction Agreements are in Dollars.
(b) Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter genders. The words "including",
"includes" and "include" shall be deemed to be followed by the words "without
limitation"; the word "or" is not exclusive; references to Persons include their
respective successors and assigns (to the extent and only to the extent
permitted by the Transaction Agreements) or, in the case of governmental
Persons, Persons succeeding to the relevant functions of such Persons; and all
references to statutes and related regulations shall include any amendments of
the same and any successor statutes and regulations.
ARTICLE 2
PURCHASE AND SALE OF WARRANTS
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2.1 Purchase and Sale of Warrants. Subject to the terms and conditions
herein set forth, the Company agrees that it will issue to Silver Point, and
Silver Point agrees that it will accept from the Company, on the Closing Date
(as defined in the Credit Agreement), in consideration of the foregoing and the
mutual agreements contained herein and in the Credit Agreement, the Warrants to
purchase shares of the Common Stock, with the Warrants being substantially in
the form attached hereto as Exhibit A, appropriately completed in conformity
herewith. SPCP Group will be issued a Warrant to purchase 2,636,200 shares of
Common Stock (subject to adjustment) and SPCP Group III will be issued a Warrant
to purchase 878,733 shares of Common Stock (subject to adjustment).
2.2 Closing; Conditions to Purchase of Warrant. The closing (the
"Closing") of this Agreement shall be held at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, 00000 on
the Closing Date. The Closing shall occur in accordance with the provisions of
the Credit Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. The Company hereby
represents and warrants to Silver Point as follows:
(a) The Company is duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation or organization and has
all requisite corporate or similar power and authority to own and operate its
properties and assets and to carry on its business as presently conducted.
(b) The Company has all requisite power and authority and has
taken all action necessary in order to execute, deliver and perform its
obligations under the Transaction Agreements. Each of the Transaction Agreements
has been duly executed and delivered by the Company and each of the Transaction
Agreements (assuming due and valid authorization, execution and delivery hereof
and thereof by the counterparties hereto and thereto) constitutes the valid and
binding obligation of the Company and is enforceable against the Company, in
accordance with its respective terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(c) The authorized capital stock of the Company consists of
395,000,000 shares of common stock, par value $0.01 per share (the "Common
Stock"), and 5,000,000 shares of preferred stock, par value $0.01 per share (the
"Preferred Stock"). There are no shares of any other class or series of stock
authorized by the Company's Certificate of Incorporation, as amended. As of the
date hereof, there are 28,640,547 shares of Common Stock issued and outstanding,
no shares of Preferred Stock issued or outstanding and no class or series of
Preferred Stock has been designated. The Company has issued options and warrants
to purchase approximately 6,905,395 shares of Common Stock to employees,
directors,
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financing sources and sellers of previously acquired businesses. Prior to
issuance of this Warrant, the Company has satisfied all its obligations under
the convertible notes payable to Waythere, Inc. and no shares of Common Stock
were issued pursuant to the convertible notes. The authorization, execution and
delivery of the Transaction Agreements, and the performance by the Company of
its obligations under each Transaction Agreement, including the issuance of the
Warrant or the issuance of Common Stock upon exercise of the Warrant, will not
result in or trigger any adjustment or modification of the rights of any holder
of outstanding options, rights, warrants, convertible securities or any other
similar security, including without limitation any anti-dilution provisions
relating to such securities. All of the outstanding shares of Company Stock are
duly authorized, validly issued in compliance with all applicable federal and
state securities Laws, fully paid and non-assessable. All Warrant Shares, when
issued, will be duly authorized, validly issued in compliance with all
applicable federal and state securities Laws, fully paid and non-assessable.
Except as set forth in this Section or in Schedule 3.1(c), there are no existing
(i) securities, options, warrants, calls, subscriptions or other rights,
convertible securities, agreements, arrangements or commitments of any character
obligating the Company to issue, transfer or sell any shares of capital stock or
other equity interest in, the Company or securities convertible into or
exchangeable for such shares or equity interests; (ii) contractual obligations
of the Company to repurchase, redeem or otherwise acquire any capital stock of
the Company; or (iii) stockholder agreements, registration rights agreements,
stock transfer restriction agreements, voting trusts or similar agreements to
which the Company or, to the knowledge of the Company, any other person is a
party with respect to Company's Common Stock.
(d) Except as set forth in Schedule 3.1(d), neither the
execution, delivery or performance of any Transaction Agreement by the Company,
nor the consummation by it of the obligations and transactions contemplated
hereby or thereby (including, without limitation, the issuance, the reservation
for issuance and the delivery of the Warrant Stock) requires any consent of,
authorization by, exemption from, filing with or notice to any governmental
authority or any other Person, including without limitation, any stock exchange
or quotation system on which the Common Stock is listed or traded.
(e) The execution, delivery and performance of each Transaction
Agreement and the consummation of the transactions contemplated hereby and
thereby (including, without limitation, the issuance and reservation for
issuance, as applicable, of the Warrant Stock) will not (a) result in a
violation of the certificate of incorporation or bylaws of the Company, in each
case as amended, (b) conflict with or result in the breach of the terms,
conditions or provisions of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give rise to
any right of termination, acceleration or cancellation under, any agreement,
lease, mortgage, license, indenture, instrument or other contract to which the
Company or any Subsidiary is a party, (c) result in a violation of any law,
rule, regulation, order, judgment or decree (including, without limitation, U.S.
federal and state securities laws and regulations) applicable to the Company or
any Subsidiary or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (d) result in the creation of any Lien upon
any of their assets.
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(f) Neither the Company nor any Subsidiary has received
notification from any Governmental Entity (a) asserting a violation of any law,
statute, ordinance or regulation or the terms of any judgments, orders, decrees,
injunctions or writs applicable to the conduct of its business, (b) threatening
to revoke any license, franchise, permit or government authorization, or (c)
restricting or in any way limiting its operations as currently conducted or
proposed to be conducted.
ARTICLE 4
REGISTRATION RIGHTS
4.1 Demand Registration Rights.
(a) Shelf Registration. At any time and from time to time before
the Expiration Date, a Holder (the "Requesting Holder") may make a written
request that the Company file a shelf registration statement (a "Shelf
Registration Statement") pursuant to Rule 415 promulgated under the Securities
Act providing for the sale by the Requesting Holder of all or part of the shares
of Common Stock owned or to be acquired by the Requesting Holder. The Requesting
Holder may, at its option, request that the Company file the Shelf Registration
Statement using Form S-3, if such form is available for use by the Company. The
Company shall use its best efforts to file such Shelf Registration Statement at
the earliest practicable date, but in any event not later than 90 days after
such request is received by the Requesting Holder, and use its best efforts to
have such Shelf Registration Statement thereafter declared effective by the SEC
at the earliest practicable date. The Company agrees to use its best efforts to
keep the Shelf Registration Statement continuously effective for the period
beginning on the date on which the Shelf Registration Statement is declared
effective until the earlier to occur of (i) three years after the date such
Shelf Registration Statement initially is declared effective by the SEC, (ii)
the day after the date on which all of the Common Stock covered by the Shelf
Registration Statement has been sold pursuant to the Shelf Registration
Statement, or (iii) the first date on which there shall cease to be any Common
Stock covered by such Shelf Registration Statement. The Company further agrees,
if necessary, to supplement or amend the Shelf Registration Statement, if
required by the rules, regulations or instructions applicable to the
registration form used by the Company or by the Securities Act or by any other
rules and regulations thereunder for shelf registration, and the Company agrees
to furnish to the Requesting Holders whose Common Stock is included in such
Shelf Registration Statement copies of any such supplement or amendment promptly
after its being issued or filed with the SEC.
(b) Non-Shelf Registration. At any time and from time to time
before the Expiration Date, a Holder may make a written demand for registration
under the Securities Act of all or part of their Registrable Securities (a
"Demand Registration"). Any demand for a Demand Registration shall specify the
number of shares of Registrable Securities proposed to be sold and the intended
method(s) of distribution thereof. The Company shall give prompt written notice
to all holders of Registrable Securities of the demand, and each
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holder of Registrable Securities who wishes to include all or a portion of such
holder's Registrable Securities in the Demand Registration (each such holder
including shares of Registrable Securities in such registration, a "Demanding
Holder") shall so notify the Company within fifteen (15) days after the receipt
by the holder of the notice from the Company. Upon any such request, the
Demanding Holders shall be entitled to have their Registrable Securities
included in the Demand Registration. The Company shall not be obligated to
effect more than an aggregate of three (3) Demand Registrations under this
section in respect of Registrable Securities.
(c) Effective Registration. A registration will not count as a
Demand Registration until the Registration Statement filed with the Commission
with respect to such Demand Registration has been declared effective and the
Company has complied with all of its obligations under this Agreement with
respect thereto, including, but not limited to, the registration procedures
outlined in Sections 4.3 and 4.4; provided, however, that if, after such
Registration Statement has been declared effective, the offering of Registrable
Securities pursuant to a Demand Registration is interfered with by any stop
order or injunction of the Commission or any other governmental agency or court,
the Registration Statement with respect to such Demand Registration will be
deemed not to have been declared effective, unless and until, (a) such stop
order or injunction is removed, rescinded or otherwise terminated, and (b) a
majority-in-interest of the Demanding Holders thereafter elect to continue the
offering; provided, further, that the Company shall not be obligated to file a
second Registration Statement until a Registration Statement that has been filed
is counted as a Demand Registration or is terminated.
(d) Underwritten Offering. If the Holders so advise the Company
as part of their written demand for a Demand Registration, the offering of such
Registrable Securities pursuant to such Demand Registration shall be in the form
of an underwritten offering. If any Demand Registration is an underwritten
offering, the Demanding Holder shall have the right to select the managing
underwriter or underwriters to administer any such offering.
(e) Priority of Offering. If the managing underwriter or
underwriters for a Demand Registration that is to be an underwritten offering
advises the Company and the Demanding Holders in writing that the dollar amount
or number of shares of Registrable Securities that the Demanding Holders desire
to sell, taken together with all other shares of Common Stock or other
securities which the Company desires to sell and the shares of Common Stock, if
any, as to which registration has been requested pursuant to written contractual
piggyback registration rights held by other stockholders of the Company who
desire to sell, exceeds the maximum dollar amount or maximum number of shares
that can be sold in such offering without adversely affecting the proposed
offering price, the timing, the distribution method, or the probability of
success of such offering (such maximum dollar amount or maximum number of
shares, as applicable, the "Maximum Number of Shares"), then the Company shall
include in such registration: (a) first, the Registrable Securities as to which
Demand Registration has been requested by the Demanding Holders (pro rata in
accordance with the number of shares of Registrable Securities which such
Demanding Holder has requested be included in such registration, regardless of
the number of shares of Registrable
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Securities held by each Demanding Holder) that can be sold without exceeding the
Maximum Number of Shares, (b) second, to the extent that the Maximum Number of
Shares has not been reached under the foregoing clause (a), the shares of Common
Stock or other securities that the Company desires to sell that can be sold
without exceeding the Maximum Number of Shares, and (c) third, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clauses (a) and (b), the shares of Common Stock or other securities for the
account of other persons that the Company is obligated to register pursuant to
written contractual piggyback registration rights with such persons and that can
be sold without exceeding the Maximum Number of Shares.
(f) Withdrawal. If the Demanding Holders disapprove of the terms
of any underwriting or are not entitled to include all of their Registrable
Securities in any offering, any Demanding Holder may elect to withdraw from such
offering by giving written notice to the Company and the underwriter or
underwriters of their request to withdraw prior to the effectiveness of the
Registration Statement filed with the Commission with respect to such Demand
Registration. If the majority-in-interest of the Demanding Holders withdraws
from a proposed offering relating to a Demand Registration, then such
registration shall not count as a Demand Registration.
4.2 Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register
any of its common equity securities under the Securities Act (other than a
registration statement on Form S-8 or on Form S-4 or any similar successor forms
thereto), whether for its own account or for the account of one or more security
holders of the Company, and the registration form to be used may be used for any
registration of Registrable Securities (a "Piggyback Registration"), the Company
shall give prompt written notice (in any event within 10 days after its receipt
of notice of any exercise of other demand registration rights) to all Holders of
its intention to effect such a registration and, subject to Sections 4.2(b) and
4.2(c), shall include in such registration all Registrable Securities with
respect to which the Company has received written requests for inclusion therein
within 15 days after the receipt of the Company's notice. The Company may
postpone or withdraw the filing or the effectiveness of a Piggyback Registration
at any time in its sole discretion. The Company shall not grant Piggyback
Registration rights with equal or higher priority than the rights granted in
this Section 4.2.
(b) 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 and/or that the number of
securities proposed to be included in any such registration would adversely
affect the price per share of the Company's equity securities to be sold in such
offering, the Company shall include in such registration (i) first, the
securities the Company proposes to sell, (ii) second, other securities,
including Registrable Securities, requested to be included in such registration
pro rata among (A) the holders of such securities who have been granted
registration rights similar to the Holders prior to the date hereof and (B) the
Holders,
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collectively, on the basis of the number of securities requested to be
registered by such holders, including the Holders, or as such holders, including
the Holders, may otherwise agree, and (iii) third, other securities requested to
be included in such registration.
(c) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of a holder of
the Company's securities other than Registrable Securities pursuant to demand
registration rights, 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 and/or that
the number of shares of Registrable Securities proposed to be included in any
such registration would adversely affect the price per share of the Company's
equity securities to be sold in such offering, the Company shall include in such
registration (i) first, the securities requested to be included therein by the
holders requesting such registration, pro rata among the holders of such
securities on the basis of the number of securities requested to be registered
by such holders, and (ii) second, other securities, including Registrable
Securities, requested to be included in such registration pro rata among (A) the
holders of such securities who have been granted registration rights similar to
the Holders prior to the date hereof and (B) the Holders collectively, on the
basis of the number of securities requested to be registered by such holders,
including the Holders, or as such holders, including the Holders, may otherwise
agree, and (iii) third, other securities requested to be included in such
registration.
(d) Selection of Underwriters. If any Piggyback Registration is
an underwritten primary offering, the Company shall have the right to select the
managing underwriter or underwriters to administer any such offering.
4.3 Registration Procedures.
(a) Whenever the Holders request 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 methods of disposition thereof, and pursuant
thereto the Company shall as expeditiously as possible:
(i) 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 as soon as practicable
thereafter; and before filing a Registration Statement or Prospectus or any
amendments or supplements thereto, furnish to the Holders of Registrable
Securities covered by such Registration Statement and the underwriter or
underwriters, if any, copies of all such documents proposed to be filed,
including documents incorporated by reference in the Prospectus and, if
requested by such Holders, the exhibits incorporated by reference, and such
Holders shall have the opportunity to object to any information pertaining to
such Holders that is contained therein and the Company will make the corrections
reasonably requested by such Holders with respect to such information prior to
filing any Registration Statement or amendment thereto or any Prospectus or any
supplement thereto;
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(ii) prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective for
a period as is necessary to complete the distribution of the securities covered
by such Registration Statement 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;
(iii) 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;
(iv) 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 will 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 (iv), (ii) subject
itself to taxation in any such jurisdiction, or (iii) consent to general service
of process in any such jurisdiction);
(v) 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 occurrence 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
material fact necessary to make the statements therein not misleading;
(vi) in the case of an underwritten offering, enter into
such customary agreements (including underwriting agreements in customary form)
and take all such other actions as the Holders of a majority of number of shares
of the Registrable Securities being sold or the underwriters reasonably request
in order to expedite or facilitate the disposition of such Registrable
Securities (including, without limitation, effecting a stock split or a
combination of shares and making members of senior management of the Company
available to participate in, and cause them to cooperate with the underwriters
in connection with, "road-show" and other customary marketing activities
(including one-on-one meetings with prospective purchasers of the Registrable
Securities)) and cause to be delivered to the underwriters and the sellers, if
any, opinions of counsel to the Company in customary form, covering such matters
as are customarily covered by opinions for an underwritten public offering as
the underwriters may request and addressed to the underwriters and the sellers;
11
(vii) 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 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;
(viii) use its best efforts to cause all such Registrable
Securities to be listed on each securities exchange on which securities of the
same class issued by the Company are then listed or, if no such similar
securities are then listed, on The Nasdaq National Market System or a national
securities exchange selected by the Company;
(ix) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such Registration
Statement;
(x) if requested, cause to be delivered, immediately prior
to the effectiveness of the Registration Statement (and, in the case of an
underwritten offering, at the time of delivery of any Registrable Securities
sold pursuant thereto), letters from the Company's independent certified public
accountants addressed to each selling Holder (unless such selling Holder does
not provide to such accountants the appropriate representation letter required
by rules governing the accounting profession) and each underwriter, if any,
stating that such accountants are independent public accountants within the
meaning of the Securities Act and the applicable rules and regulations adopted
by the SEC thereunder, and otherwise in customary form and covering such
financial and accounting matters as are customarily covered by letters of the
independent certified public accountants delivered in connection with primary or
secondary underwritten public offerings, as the case may be;
(xi) make generally available to its stockholders a
consolidated earnings statement (which need not be audited) for the 12 months
beginning after the effective date of a Registration Statement as soon as
reasonably practicable after the end of such period, which earnings statement
shall satisfy the requirements of an earning statement under Section 11(a) of
the Securities Act; and
(xii) promptly notify each seller of Registrable Securities
and the underwriter or underwriters, if any:
(1) when the Registration Statement, any pre-effective
amendment, the Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement has
been filed and, with respect to the Registration Statement
or any post-effective amendment, when the same has become
effective;
(2) of any written request by the SEC for amendments or
supplements to the Registration Statement or Prospectus;
12
(3) of the notification to the Company by the SEC of its
initiation of any proceeding with respect to the issuance by
the SEC of any stop order suspending the effectiveness of
the Registration Statement; and
(4) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any
Registrable Securities for sale under the applicable
securities or blue sky laws of any jurisdiction.
(b) No Registration Statement (including any amendments or
supplements thereto and Prospectuses contained therein) shall contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein not misleading
(except, with respect to any Holder, for an untrue statement or alleged untrue
statement of a material fact or omission or alleged omission of a material fact
made in reliance on and in conformity with written information furnished to the
Company by or on behalf of such Holder specifically for use therein).
(c) The Company shall make available to each Holder whose
Registrable Securities is included in a Registration Statement (i) promptly
after the same is prepared and publicly distributed, filed with the SEC, or
received by the Company, one copy of each Registration Statement and any
amendment thereto, each preliminary Prospectus and Prospectus and each amendment
or supplement thereto, each letter written by or on behalf of the Company to the
SEC or the staff of the SEC (or other governmental agency or self-regulatory
body or other body having jurisdiction, including any domestic or foreign
securities exchange), and each item of correspondence from the SEC or the staff
of the SEC (or other governmental agency or self-regulatory body or other body
having jurisdiction, including any domestic or foreign securities exchange), in
each case relating to such Registration Statement (other than any portion
thereof which contains information for which the Company has sought confidential
treatment), and (ii) such number of copies of a Prospectus, including a
preliminary Prospectus, and all amendments and supplements thereto and such
other documents as such Holder may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Holder. The Company will
promptly notify each Holder by facsimile of the effectiveness of each
Registration Statement or any post-effective amendment. The Company will
promptly respond to any and all comments received from the SEC, with a view
towards causing each Registration Statement or any amendment thereto to be
declared effective by the SEC as soon as practicable and shall file an
acceleration request as soon as practicable following the resolution or
clearance of all SEC comments or, if applicable, following notification by the
SEC that any such Registration Statement or any amendment thereto will not be
subject to review.
(d) At all times after the Company has filed a registration
statement with the SEC pursuant to the requirements of either the Securities Act
or the Exchange Act, the Company shall file all reports required to be filed by
it under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder, and take such further action as any Holders may
reasonably request, all to the extent required to enable such
13
Holders to be eligible to sell Registrable Securities pursuant to Rule 144 (or
any similar rule then in effect).
(e) The Company may require each seller of Registrable Securities
as to which any registration is being effected to furnish to the Company any
other information regarding such seller and the distribution of such securities
as the Company may from time to time reasonably request in writing.
(f) Each seller of Registrable Securities agrees by having its
stock treated as Registrable Securities hereunder that, upon notice 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 material fact necessary to make the statements therein not misleading (a
"Suspension Notice"), such seller will forthwith discontinue disposition of
Registrable Securities for a reasonable length of time not to exceed 60 days
until such seller is advised in writing by the Company that the use of the
Prospectus may be resumed and is furnished with a supplemented or amended
Prospectus as contemplated by Section 4.3(e) hereof, and, if so directed by the
Company, such seller will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such seller's possession, of
the Prospectus covering such Registrable Securities current at the time of
receipt of such notice; provided, however, that such postponement of sales of
Registrable Securities by the Holders shall not exceed ninety (90) days in the
aggregate in any one year. If the Company shall give any notice to suspend the
disposition of Registrable Securities pursuant to a Prospectus, the Company
shall extend the period of time during which the Company is required to maintain
the Registration Statement effective pursuant to this Agreement by the number of
days during the period from and including the date of the giving of such notice
to and including the date such seller either is advised by the Company that the
use of the Prospectus may be resumed or receives the copies of the supplemented
or amended Prospectus contemplated by Section 4.3(e). In any event, the Company
shall not be entitled to deliver more than two (2) Suspension Notices in any one
year.
4.4 Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Article 4, including, without limitation, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, listing application fees, printing expenses, transfer agent's and
registrar's fees, cost of distributing Prospectuses in preliminary and final
form as well as any supplements thereto, 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") (but not including any underwriting discounts or
commissions attributable to the sale of Registrable Securities or fees and
expenses of more than one counsel representing the Holders of Registrable
Securities), shall be borne by the Company. In addition, the Company shall 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 they are to be listed.
14
(b) In connection with each registration initiated hereunder, the
Company shall reimburse the Holders covered by such registration or sale for the
reasonable fees and disbursements of one law firm chosen by the Holders of a
majority of the number of shares of Registrable Securities included in such
registration or sale.
(c) The obligation of the Company to bear the expenses described
in Section 4.4(a) and to reimburse the Holders for the expenses described in
Section 4.4(b) shall apply irrespective of whether a registration, once properly
demanded, if applicable, becomes effective, is withdrawn or suspended, is
converted to another form of registration and irrespective of when any of the
foregoing shall occur; provided, however, that Registration Expenses for any
Registration Statement withdrawn solely at the request of a Holder of
Registrable Securities or any supplements or amendments to a Registration
Statement or Prospectus resulting from a misstatement furnished to the Company
by a Holder shall be borne by such Holder.
4.5 Indemnification.
(a) In connection with any Registration Statement in which a
Holder of Registrable Securities is participating, the Company shall indemnify
each Holder, its officers, directors and Affiliates and each Person who controls
such Holder (within the meaning of the Securities Act) against all losses,
claims, damages, liabilities and expenses arising out of or based upon 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 any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or applicable "blue sky" laws, except insofar
as the same are made in reliance and in conformity with information relating to
such Holder furnished in writing to the Company by such Holder expressly for use
therein or caused by such Holder's failure to deliver to such Holder's immediate
purchaser a copy of the Prospectus or any amendments or supplements thereto (if
the same was required by applicable law to be so delivered) 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 Securities Act) to the same extent as
provided above with respect to the indemnification of the Holders.
(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 as the Company reasonably
requests for use in connection with any such Registration Statement or
Prospectus and, shall indemnify, to the fullest extent permitted by law, the
Company, its officers, directors, Affiliates, and each Person who controls the
Company (within the meaning of the Securities Act) against all losses, claims,
damages, liabilities and expenses arising out of or based upon 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
15
misleading, but only to the extent that the same are made in reliance and in
conformity with information relating to such Holder furnished in writing to the
Company by such Holder expressly for use therein; provided, however, that the
obligation to indemnify shall be several, not joint and several, among such
Holders and the liability of each such Holder shall be in proportion to and
limited to the net amount 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 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 will 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 there may be one or more legal or equitable defenses
available to such indemnified party which are in addition to or may conflict
with those available to another indemnified party with respect to such claim.
Failure to give prompt written notice shall not release the indemnifying party
from its obligations hereunder.
(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.
(e) If the indemnification provided for in or pursuant to this
Section 4.5 is due in accordance with the terms hereof, but is held by a court
to be unavailable or unenforceable in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified Person as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions
which result in such losses, claims, damages, liabilities or expenses as well as
any other relevant equitable considerations. The relative fault of the
indemnifying party on the one hand and of the indemnified Person on the other
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 the indemnifying
party or by the indemnified party, and by such party's relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. In no event shall the liability of any selling Holder be
greater in amount than the amount of net proceeds received by such Holder upon
such sale or the amount for which such indemnifying party would have been
obligated to pay by way of
16
indemnification if the indemnification provided for under Section 4.5(a) or
4.5(b) hereof had been available under the circumstances.
4.6 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.
4.7 Listing. From and after the Closing Date, the Company covenants
that it will use its best efforts to effect and maintain the quotation of all
the Warrant Stock on the Nasdaq Capital Market, or the primary stock exchange or
quotation service upon which the Common Stock is then traded, subject to
official notice of issuance.
4.8 Rule 144. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder, and it will take such
further action as any Holder may reasonably request to make available adequate
current public information with respect to the Company meeting the current
public information requirements of Rule 144(c) under the Securities Act, to the
extent required to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (ii) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of any Holder, the Company will deliver to such Holder
a written statement as to whether it has complied with such information and
requirements.
4.9 Shareholder Approval. The Company covenants that it will use its
best efforts, including the solicitation of written consents in lieu of a
meeting or the calling of a meeting of shareholders and distribution of a proxy
or information statement and solicitation or proxies, as applicable, to obtain
Shareholder Approval either by action taken without a meeting by written consent
of stockholders or at a meeting of stockholders, in either case on or before 45
days following the date hereof. In the event the Company does not obtain the
requisite stockholder approvals, Holder shall not be entitled to damages
hereunder or to any premiums or penalty.
4.10 Lock-Up. Notwithstanding anything to the contrary, Holder agrees
and covenants that it shall not sell, assign or otherwise transfer any of the
Warrant Stock held by it during the 90 day period immediately following the date
hereof. Notwithstanding the foregoing, each Holder's agreement not to sell,
assign or otherwise transfer shall be effective only to the extent that Atlantic
Investors, LLC, its successors and Affiliated transferees, is similarly
prohibited from selling, assigning or otherwise transferring any shares of
Common Stock. In addition, the restrictions set forth in this paragraph shall
not restrict the ability of any Holder to sell, assign or transfer shares of
Common Stock (or any cash, securities or other property received in a
transaction referred to in clause (ii) below) (i) to its members or other
17
Affiliates or (ii) participate in any liquidity event available generally to the
Company's other non-Affiliated stockholders.
ARTICLE 5
MISCELLANEOUS
5.1 Survival of Representations and Warranties. All of the
representations and warranties made herein shall survive the execution and
delivery of this Agreement, any investigation by or on behalf of the Holder,
acceptance of the Warrant and payment therefor, exercise of the Warrant or
termination of this Agreement.
5.2 Notices. All notices or other communications hereunder shall be
deemed to have been duly given and made if in writing and if served by personal
delivery upon the party for whom it is intended or by a national courier
service, or if sent by facsimile; provided that the facsimile is promptly
confirmed by written confirmation by a national courier service thereof, to the
person at the address set forth below, or such other address as may be
designated in writing hereafter, in the same manner, by such person:
If to Silver Point, to:
Silver Point Capital
Two Greenwich Plaza
Greenwich, CT 06830
Attn.: Xxxxxxxx Xxxxxx
Voice: 000-000-0000
Email: xxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
with a copy (which shall not constitute notice to Silver Point), to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn.: Xxxx X. Xxxxxxxx
L. Xxxxx Xxxxx III
Voice: 312-407-0700
Fax: 000-000-0000
18
If to the Company, to:
NaviSite, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attn.: Xxxx X. Xxxxx, Xx.
Chief Financial Officer
Voice: 000-000-0000
Fax: 000-000-0000
with a copy (which shall not constitute notice to the Company), to:
BRL Law Group LLC
00 Xx. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Rosedale
Voice: (000) 000-0000
Fax: (000) 000-0000
Any notice given by overnight courier is effective upon receipt against the
Person who receives it.
5.3 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns, including any transferee of all or any portion of the Warrant or the
Warrant Stock .
5.4 Amendment and Waiver. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Silver Point and the Company, or in the
case of a waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
5.5 Counterparts. This Agreement and any amendments hereto may be
executed in one or more counterparts, each of which shall be deemed to be an
original by the parties executing such counterpart, but all of which shall be
considered one and the same instrument.
5.6 Headings; Table of Contents. The section and paragraph headings
and table of contents contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
5.7 Governing Law. IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
19
WARRANT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES AND
ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
5.8 Waiver of Jury Trial. THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN THE COMPANY AND SILVER
POINT ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF
THE OTHER TRANSACTION AGREEMENTS OR THE TRANSACTIONS RELATED THERETO.
5.9 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall 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
such provision or the remaining provisions of this Agreement.
5.10 Entire Agreement. The Transaction Agreements constitute the
complete agreement between the parties with respect to the subject matter
thereof and may not be modified, altered or amended except as set forth in
Section 5.4.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their respective officers hereunto duly authorized
as of the date first above written.
NAVISITE, INC.
By /s/ Xxxx X. Xxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
SPCP GROUP, L.L.C.
By /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Authorized Signatory
SPCP GROUP III LLC
By /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Authorized Signatory
