Exhibit 10.14
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT made as of this 25th day of November, 1998
between VerticalNet, Inc., a Pennsylvania corporation (the "Company") and each
of the undersigned (together with their respective affiliates and any assignee
or transferee of all of their respective rights hereunder (the "Investors")).
R E C I T A L S:
A. The Company has issued to the Investors certain Convertible Notes
dated November 25, 1998 in the aggregate principal amount of $5,000,000 (the
"Notes") and certain Common Stock Purchase Warrants dated November 25, 1998 to
purchase an aggregate of 160,000 shares of Common Stock (the "Warrants");
B. The Company and the Investor desire to enter into this Registration
Rights Agreement to provide for registration rights with respect to the Common
Stock underlying the Notes and the Warrants.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the
Investors hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
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Section 1. As used in this Agreement, the following terms shall have
the following meanings:
1.1. Commission means the Securities and Exchange Commission, or any
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other federal agency at the time administering the Securities Act and the
Exchange Act.
1.2. Common Stock means (i) the Company's Common Stock, $0.01 par
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value, as authorized on the date of this Agreement, (ii) any other capital stock
of any class or classes (however designated) of the Company, authorized on or
after the date hereof, the holders of which shall have the right, without
limitation as to amount, either to all or to a share of the balance of current
dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and the holders of which
shall ordinarily, in the absence of contingencies or in the absence of any
provision to the contrary in the Company's Articles of Incorporation, be
entitled to vote for the election of a majority of directors of the Company
(even though the right so to vote has been suspended by the happening of such a
contingency or provision), and (iii) any other
securities into which or for which any of the securities described in (i) or
(ii) may be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
1.3. Exchange Act means the Securities Exchange Act of 1934, or any
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similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
1.4. Holders has the meaning set forth in Section 2.1.
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1.5. Initial Public Offering means the first underwritten public
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offering of Common Stock of the Company for the account of the Company and
offered on a "firm commitment" or "best efforts" basis pursuant to an offering
registered under the Securities Act with the Commission on Form S-1 or its then
equivalent.
1.6. Person means an individual, corporation, partnership, limited
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liability company, joint venture, trust or unincorporated organization or a
government or any agency or political subdivision thereof.
1.7. Prior Purchase Agreements means (i) the Preferred Stock Purchase
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Agreement by and between the Company and Internet Capital Group, L.L.C., dated
as of September 12, 1996, (ii) the Preferred Stock Purchase Agreement by and
between the Company and Internet Capital Group, L.L.C., dated as of July 18,
1997, (iii) the Subscription Agreement by and between the Company and Xxxxxx
Xxxxxx, dated as of October 10, 1997 and (iv) the Series D Preferred Stock
Purchase Agreement by and among the Company and the Purchasers (as defined
therein), dated as of May 8, 1998.
1.8. Registrable Securities means (i) any shares of Common Stock
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issued upon conversion of the Notes owned by any Investor and (ii) any shares of
Common Stock issued upon exercise of the Warrants owned by any Investor;
provided, however, that shares of Common Stock which are Registrable Securities
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shall cease to be Registrable Securities upon the consummation of any sale
pursuant to a registration statement, Section 4(i) of the Securities Act or Rule
144 under the Securities Act.
1.9. Securities Act means the Securities Act of 1933, or any similar
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federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
ARTICLE II
REGISTRATION RIGHTS
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Section 2.1. Piggyback Registration. If at any time after the Initial
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Public Offering, the Company shall determine to register for its own account or
the account of others under the Securities Act (including pursuant to a demand
for registration of any shareholder of the Company) any of its equity
securities, other than on Form S-8 or Form S-4 or their then equivalents
relating to shares of
Common Stock to be issued solely in connection with any acquisition of any
entity or business or shares of Common Stock issuable in connection with stock
option or other employee benefit plans, it shall send to each holder of
Registrable Securities, including each holder who has the right to acquire
Registrable Securities, written notice of such determination and, if within
fifteen (15) days after receipt of such notice, such holder shall so request in
writing, the Company shall use its best efforts to include in such registration
statement all or any part of the Registrable Securities such holder requests to
be registered, except that if, in connection with any offering involving an
underwriting of Common Stock to be issued by the Company, the managing
underwriter shall impose a limitation on the number of shares of such Common
Stock which may be included in the registration statement because, in its
judgment, such limitation is necessary to effect an orderly public distribution,
then the Company shall be obligated to include in such registration statement
only such limited portion of the Registrable Securities with respect to which
such holder has requested inclusion hereunder; provided, however, that all
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shares of Common Stock, or capital stock of the Company convertible into Common
Stock, that have been granted registration rights pursuant to the terms of any
of the Prior Purchase Agreements that are permitted to be included have been
included that have been requested inclusion in such registration; provided,
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further, however, that the Company shall not so exclude any Registrable
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Securities unless it has first excluded any securities (other than Registrable
Securities) to be offered and sold by directors, officers or other employees of
the Company or by holders who do not have contractual, incidental rights to
include such securities (collectively, "Excludable Shares"); and provided,
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further, however, that if all requested Registrable Securities are included in
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such registration, that as between the Company and holders of Registrable
Securities, in no event shall the Registrable Securities included in such
offering be limited to less than twenty-five percent (25%) of the aggregated
shares offered. Any exclusion of Registrable Securities shall be made pro rata
among the Investors (or their assigns) seeking to include such shares, in
proportion to the number of such shares sought to be included by such Investors
(or their assigns). No incidental right under this Section 2.1 shall be
construed to limit any registration required under Section 2.2. The obligations
of the Company under this Section 2.1 may be waived at any time upon the written
consent of holders of sixty percent (60%) in interest of the Notes and shall
expire on the tenth anniversary following the consummation of an Initial Public
Offering.
Section 2.2. Demand Registrations. If on any occasion one or more holders
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of at least sixty percent (60%) of the outstanding principal amount of the Notes
shall notify the Company in writing that it or they intend to offer or cause to
be offered for public sale at least thirty percent (30%) of the Registrable
Securities, the Company will so notify all holders of Registrable Securities,
including all holders who have a right to acquire Registrable Securities. Upon
written request of any holder given within fifteen (15) days after the receipt
by such holder from the Company of such notification, the Company will use its
best efforts to cause such of the Registrable Securities as may be requested by
any holder thereof (including the holder or holders giving the initial notice of
intent to offer) to be registered under the Securities Act as expeditiously as
possible. The Company shall not be required to effect more than one registration
during any twelve (12) month period pursuant to this Section 2.2 and two such
registrations in the aggregate. If the Company determines to include shares to
be sold by it or by other selling shareholders in any registration request
pursuant to this Section 2.2, such registration shall be deemed to have been a
"piggy back" registration under Section 2.1, and not a "demand" registration
under this Section 2.2 if the holders of Registrable Securities are unable to
include in any such registration statement eighty-five percent (85%) of the
Registrable Securities initially requested for inclusion in such registration
statement. The Company shall not be required to effect a registration pursuant
to this Section 2.2 unless the minimum market value of any offering and
registration of Registrable Securities made pursuant thereto is at least
$1,000,000, before calculation of underwriting discounts and commissions. The
holders of Registrable Securities may not exercise their rights under this
Section 2.2 until 90 days after the effectiveness of any registration statement
covering the Initial Public Offering.
Section 2.3. Registrations on Form S-3. In addition to the rights
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provided the holder of Registrable Securities in Sections 2.1 and 2.2 above, if
the registration of Registrable Securities under the Securities Act can be
effected on Form S-3 (or any similar form promulgated by the Commission), then
upon the written request of one or more holders of at least sixty percent (60%)
of outstanding principal amount of the Notes, the Company will so notify each
holder of Registrable Securities, including each holder who has a right to
acquire Registrable Securities, and then will, as expeditiously as possible, use
its best efforts to effect qualification and registration under the Securities
Act on Form S-3 of all or such portion of the Registrable Securities as the
holder or holders shall specify; provided, however, the Company shall not be
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required to effect a registration pursuant to this Section 2.3 unless the market
value of the Registrable Securities to be sold in any such registration shall be
estimated to be at least $500,000 at the time of filing such registration
statement, and further provided that the Company shall not be required to effect
more than one (1) registration during any twelve (12) month period pursuant to
this Section 2.3.
Section 2.4. Effectiveness. The Company will use its best efforts to
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maintain the effectiveness for up to 90 days (or such shorter period of time as
the underwriters need to complete the distribution of the registered offering,
or one year in the case of a "shelf" registration statement on Form S-3) of any
registration statement pursuant to which any of the Registrable Securities are
being offered, and from time to time will amend or supplement such registration
statement and the prospectus contained therein to the extent necessary to comply
with the Securities Act and any applicable state securities statute or
regulation. The Company will also provide each holder of Registrable Securities
with as many copies of the prospectus contained in any such registration
statement as it may reasonably request.
Section 2.5. Registration Expenses. In the case of each registration
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effected under Section 2.1, 2.2 or 2.3, the Company shall bear all reasonable
costs and expenses of each such registration on behalf of the selling holders of
Registrable Securities, including, but not limited to, the Company's printing,
legal and accounting fees and expenses, Commission and NASD filing fees and
"Blue Sky" fees and expenses and the reasonable fees and disbursements (such
fees not to exceed $25,000) of one counsel for the selling holders of
Registrable Securities in connection with the registration of their Registrable
Securities; provided, however, that the Company shall have no obligation to pay
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or otherwise bear any portion of the underwriters' commissions or discounts
attributable to the Registrable Securities being offered and sold by the holders
of the Registrable Securities, or the fees and expenses of more than one counsel
for the selling holders of Registrable Securities in connection with the
registration of the Registrable Securities. The Company shall pay all expenses
of the holders of the Registrable Securities in connection with any registration
initiated
pursuant to this Article II which is withdrawn, delayed or abandoned at the
request of the Company, except if such withdrawal, delay or abandonment is
caused by the fraud, material misstatement or omission of a material fact by a
holder of Registrable Securities to be included in such registration.
Section 2.6. Further Obligations of the Company. Whenever under the
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preceding Sections of this Article II, the Company is required hereunder to
register Registrable Securities, it agrees that it shall also do the following:
(a) Furnish to each selling holder such copies of each preliminary
and final prospectus and such other documents as said holder may reasonably
request to facilitate the public offering of its Registrable Securities;
(b) Use its best efforts to register or qualify the Registrable
Securities covered by said registration statement under the applicable
securities or "blue sky" laws of such jurisdictions as any selling holder may
reasonably request; provided, however, that the Company shall not be obligated
to qualify to do business in any jurisdictions where it is not then so qualified
or to take any action which would subject it to the service of process in suits
other than those arising out of the offer or sale of the securities covered by
the registration statement in any jurisdiction where it is not then so subject;
(c) Furnish to each selling holder a signed counterpart, addressed
to the selling holders, of
(i) an opinion of counsel for the Company, dated the effective
date of the registration statement, and
(ii) "comfort" letters signed by the Company's independent public
accountants who have examined and reported on the Company's financial statements
included in the registration statement, to the extent permitted by the standards
of the American Institute of Certified Public Accountants, covering
substantially the same matters with respect to the registration statement (and
the prospectus included therein) and (in the case of the accountants' "comfort"
letters) with respect to events subsequent to the date of the financial
statements, as are customarily covered in opinions of issuer's counsel and in
accountants' "comfort" letters delivered to the underwriters in underwritten
public offerings of securities, to the extent that the Company is required to
deliver or cause the delivery of such opinion or "comfort" letters to the
underwriters in an underwritten public offering of securities;
(d) Permit each selling holder of Registrable Securities or his
counsel or other representatives to inspect and copy such corporate documents
and records as may reasonably be requested by them;
(e) Furnish to each selling holder of Registrable Securities a copy
of all documents filed with and all correspondence from or to the Commission in
connection with any such offering of securities;
(f) Use its best efforts to insure the obtaining of all necessary
approvals from the National Association of Securities Dealers, Inc.; and
(g) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earning statement covering the
period of at least twelve months, but not more than eighteen months, beginning
with the first month after the effective date of the registration statement
covering the Initial Public Offering, which earning statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
Whenever under the preceding Sections of this Article II the holders of
Registrable Securities are registering such shares pursuant to any registration
statement, each such holder agrees to (i) timely provide to the Company, at its
request, such information and materials as it may reasonably request in order to
effect the registration of such Registrable Securities and (ii) convert all
shares of Preferred Stock included in any registration statement to shares of
Common Stock, such conversion to be effective at the closing of such offering
pursuant to such registration statement.
Section 2.7 Approval of Underwriter. Any managing underwriter engaged in
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any registration made pursuant to Section 2.2 shall be a nationally recognized
firm requiring the approval in writing of the holders of a majority of the
Registrable Securities requesting such registration and the consent of the
Company, which consent shall not be unreasonably withheld or delayed.
Section 2.8. "Lock-Up" Agreement.
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(a) Initial Public Offering. Each holder of Registrable Securities
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agrees, if so requested by the Company and an underwriter of Common Stock or
other securities of the Company, not to sell, grant any option or right to buy
or sell, or otherwise transfer or dispose of in any manner, whether in
privately-negotiated or open-market transactions, any Common Stock or other
securities of the Company held by it during the 90-day period following the
effective date of a registration statement filed pursuant to the Initial Public
Offering, provided that:
(i) Such agreement shall apply only to the Initial Public
Offering; and
(ii) All holders of Registrable Securities, any other security
holders whose securities are included in such registration statement, and all
officers, directors and Key Employees of the Company shall also enter into
similar agreements.
Such "lock-up" agreement shall be in writing and in form and substance
satisfactory to the Company and such underwriter. The Company may impose stop-
transfer instructions with respect to the shares subject to the foregoing
restrictions until the end of said 90-day period. No holder of Registrable
Securities shall be so restricted unless all holders are similarly and
proportionately restricted.
(b) Lock-Up after Initial Public Offering. Each holder of
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Registrable Securities agrees that in the event the Company proposes to offer
for sale to the public any of its equity securities after the Initial Public
Offering, and (1) if such holder of Registrable Securities is an "affiliate" of
the Company (for example, because a general partner of a Purchaser is a director
of the Company) or otherwise holds beneficially or of record ten percent (10%)
or more of the outstanding equity securities of the Company; and (2) if
requested by the Company and an underwriter of Common Stock or other securities
of the Company; and (3) if all other "affiliates" and such 10% stockholders
similarly situated are requested by the Company and such underwriter to sign,
and actually do sign, any "Lock-Up Agreement" (as described herein), then it
will not sell, grant any option or right to buy or sell, or otherwise transfer
or dispose of in any manner, to the public in open market transactions, any
Common Stock or other securities of the Company held by it during the 90-day
period following the effective date of the registration statement of the Company
filed under the Securities Act. The Company agrees that it will sign a Lock-Up
Agreement upon substantially similar terms and conditions in the event of a
registration effected pursuant to Sections 2.2 or 2.3 hereof. Such agreements
shall be in writing and in form and substance reasonably satisfactory to the
holder of Registrable Securities, the Company and such underwriter and pursuant
to customary and prevailing terms and conditions.
The Company may impose stop-transfer instructions with respect to the
securities subject to the foregoing restrictions until the end of said 90-day
period.
Section 2.9. Mergers, Etc. The Company shall not, directly or indirectly,
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enter into any merger, consolidation or reorganization in which the Company
shall not be the surviving corporation unless the proposed surviving corporation
shall, prior to such merger, consolidation or reorganization, agree in writing
to assume the obligations of the Company under this Agreement, and for that
purpose references hereunder to Registrable Securities shall be deemed to be
references to the securities which the Investor would be entitled to receive in
exchange for Registrable Securities under any such merger, consolidation or
reorganization; provided, however, that the provisions of this Section 2.9 shall
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not apply in the event of any merger, consolidation, or reorganization in which
the Company is not the surviving corporation if all stockholders are entitled to
receive in exchange for their Registrable Securities consideration consisting
solely of (i) cash, (ii) securities of the acquiring corporation which may be
immediately sold to the public without registration under the Securities Act, or
(iii) securities of the acquiring corporation which the acquiring corporation
has agreed to register within 90 days of completion of the transaction for
resale to the public pursuant to the Securities Act.
Section 2.10.Limitations on Subsequent Registration Rights. From and after
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the date of this Agreement, the Company shall not, without the prior written
consent of the holders of at least a majority of the Registrable Securities,
enter into any agreement with any holder or prospective holder of any securities
of the Company which would allow such holder or prospective holder of any
securities of the Company the right to require the Company to initiate any
registration of any securities of the Company. Any right given by the Company to
any holder or prospective holder of the Company's securities in connection with
the registration of securities, shall be conditioned such that it shall be
consistent with the provisions and with the rights of the holder provided in
this
Agreement. This Section 2.10 shall not limit the right of the Company to enter
into any agreements with any holder or prospective holder of any securities of
the Company giving such holder or prospective holder the right to require the
Company, upon any registration of any of its securities, to include, among the
securities which the Company is then registering, securities owned by such
holder if such rights are subordinate to the rights of a holder of Registrable
Securities.
ARTICLE III
INDEMNIFICATION
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Section 3.1. Indemnification of Holder of Registrable Securities. In the
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event that the Company registers any of the Registrable Securities under the
Securities Act, the Company will indemnify and hold harmless each holder and
each underwriter of the Registrable Securities (including their officers,
directors, affiliates and partners) so registered (including any broker or
dealer through whom such shares may be sold) and each Person, if any, who
controls such holder or any such underwriter within the meaning of Section 15 of
the Securities Act from and against any and all losses, claims, damages,
expenses or liabilities, joint or several, to which they or any of them become
subject under the Securities Act, applicable state securities laws or under any
other statute or at common law or otherwise, as incurred, and, except as
hereinafter provided, will reimburse each such holder, each such underwriter and
each such controlling Person, if any, for any legal or other expenses reasonably
incurred by them or any of them in connection with investigating or defending
any actions whether or not resulting in any liability, as incurred, insofar as
such losses, claims, damages, expenses, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement, in any preliminary or amended
preliminary prospectus or in the final prospectus (or the registration statement
or prospectus as from time to time amended or supplemented by the Company) or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or any violation by the Company of any rule
or regulation promulgated under the Securities Act or any state securities laws
applicable to the Company and relating to action or inaction required of the
Company in connection with such registration, unless (i) such untrue statement
or alleged untrue statement or omission or alleged omission was made in such
registration statement, preliminary or amended preliminary prospectus or final
prospectus in reliance upon and in conformity with information furnished in
writing to the Company in connection therewith by any such holder of Registrable
Securities (in the case of indemnification of such holder), any such underwriter
(in the case of indemnification of such underwriter) or any such controlling
Person (in the case of indemnification of such controlling person) expressly for
use therein, or unless (ii) in the case of a sale directly by such holder of
Registrable Securities (including a sale of such Registrable Securities through
any underwriter retained by such holder of Registrable Securities to engage in a
distribution solely on behalf of such holder of Registrable Securities), such
untrue statement or alleged untrue statement or omission or alleged omission was
contained in a preliminary prospectus and corrected in a final or amended
prospectus copies of which were delivered to such holder of Registrable
Securities or such underwriter on a timely basis, and such holder of Registrable
Securities failed to deliver a copy of the final or amended prospectus at or
prior to the confirmation for the sale of the Registrable Securities to the
person
asserting any such loss, claim, damage or liability in any case where such
delivery is required by the Securities Act.
Promptly after receipt by any holder of Registrable Securities, any
underwriter or any controlling Person of notice of the commencement of any
action in respect of which indemnity may be sought against the Company, such
holder of Registrable Securities, or such underwriter or such controlling
Person, as the case may be, will notify the Company in writing of the
commencement thereof (provided, that failure to so notify the Company shall not
relieve the Company from any liability it may have hereunder) and, subject to
the provisions hereinafter stated, the Company shall be entitled to assume the
defense of such action (including the employment of counsel, who shall be
counsel reasonably satisfactory to such holder of Registrable Securities, such
underwriter or such controlling Person, as the case may be), and the payment of
expenses insofar as such action shall relate to any alleged liability in respect
of which indemnity may be sought against the Company.
Such holder of Registrable Securities, any such underwriter or any such
controlling Person shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel subsequent to any assumption of the defense by the Company shall
not be at the expense of the Company unless the employment of such counsel has
been specifically authorized in writing by the Company. The Company shall not
be liable to indemnify any Person for any settlement of any such action effected
without the Company's written consent. The Company shall not, except with the
approval of each party being indemnified under this Section 3.1, consent to
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 the
parties being so indemnified of a release from all liability in respect to such
claim or litigation.
In order to provide for just and equitable contribution to joint liability
under the Securities Act in any case in which any holder of Registrable
Securities exercising rights under this Article III, or any controlling Person
of any such holder, makes a claim for indemnification pursuant to this Section
3.1 but it is judicially determined (by the entry of a final judgment or decree
by a court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 3.1 provides
for indemnification in such case, then, the Company and such holder will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and of
the holder of Registrable Securities on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and of the holder of Registrable
Securities on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or by the holder of Registrable Securities on the other,
and each party's relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission; provided, however,
that, in any such case, (A) no such holder will be required to contribute any
amount in excess of the public offering price of all such Registrable Securities
offered by it pursuant to such
registration statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.
Section 3.2. Indemnification of Company. In the event that the Company
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registers any of the Registrable Securities under the Securities Act, each
holder of the Registrable Securities so registered will indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed or otherwise participated in the preparation of the registration
statement, each underwriter of the Registrable Securities so registered
(including any broker or dealer through whom such of the shares may be sold) and
each Person, if any, who controls the Company within the meaning of Section 15
of the Securities Act from and against any and all losses, claims, damages,
expenses or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act, applicable state securities laws or
under any other statute or at common law or otherwise, and, except as
hereinafter provided, will reimburse the Company and each such director,
officer, underwriter or controlling Person for any legal or other expenses
reasonably incurred by them or any of them in connection with investigating or
defending any actions whether or not resulting in any liability, insofar as such
losses, claims, damages, expenses, liabilities or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement, in any preliminary or amended
preliminary prospectus or in the final prospectus (or in the registration
statement or prospectus as from time to time amended or supplemented) or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, but only insofar as any such statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company in connection therewith by such holder of Registrable
Securities expressly for use therein; provided, however, that such holder's
obligations hereunder shall be limited to an amount equal to the proceeds
received by such holder of Registrable Securities sold in such registration.
Promptly after receipt of notice of the commencement of any action in
respect of which indemnity may be sought against such holder of Registrable
Securities, the Company will notify such holder of Registrable Securities in
writing of the commencement thereof (provided, that failure to so notify such
holder shall not relieve such holder from any liability it may have hereunder),
and such holder of Registrable Securities shall, subject to the provisions
hereinafter stated, be entitled to assume the defense of such action (including
the employment of counsel, who shall be counsel reasonably satisfactory to the
Company) and the payment of expenses insofar as such action shall relate to the
alleged liability in respect of which indemnity may be sought against such
holder of Registrable Securities. The Company and each such director, officer,
underwriter or controlling Person shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel subsequent to any assumption of the defense by
such holder of Registrable Securities shall not be at the expense of such holder
of Registrable Securities unless employment of such counsel has been
specifically authorized in writing by such holder of Registrable Securities.
Such holder of Registrable Securities shall not be liable to indemnify any
Person for any settlement of any such action effected without such holder's
written consent.
In order to provide for just and equitable contribution to joint liability
under the Securities Act in any case in which the Company exercising its rights
under this Article III, makes a claim for indemnification pursuant to this
Section 3.2, but it is judicially determined (by the entry of a final judgment
or decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification may
not be enforced in such case notwithstanding that this Section 3.2 provides for
indemnification, in such case, then, the Company and such holder will contribute
to the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion as is appropriate to
reflect the relative fault of the Company on the one hand and of the holder of
Registrable Securities on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of the holder of Registrable Securities on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company on the one
hand or by the holder of Registrable Securities on the other, and each party's
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided, however, that, in any such case,
(A) no such holder will be required to contribute any amount in excess of the
public offering price of all such Registrable Securities offered by it pursuant
to such registration statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.
ARTICLE IV
EXCHANGE ACT REGISTRATION
-------------------------
Section 4.1 Exchange Act Registration. If the Company at any time shall
-------------------------
list any class of equity securities of the type which may be issued upon the
conversion of the Preferred Stock on any national securities exchange and shall
register such class of equity securities under the Exchange Act, the Company
will, at its expense, simultaneously list on such exchange and maintain such
listing of, the Common Stock. If the Company becomes subject to the reporting
requirements of either Section 13 or Section 15(d) of the Exchange Act, the
Company will use its best efforts to timely file with the Commission such
information as the Commission may require under either of said Sections; and in
such event, the Company shall use its best efforts to take all action as may be
required as a condition to the availability of Rule 144 or Rule 144A under the
Securities Act (or any successor exemptive rule hereinafter in effect) with
respect to such Common Stock. The Company shall furnish to any holder of
Registrable Securities forthwith upon request (i) a written statement by the
Company as to its compliance with the reporting requirements of Rule 144, (ii) a
copy of the most recent annual or quarterly report of the Company as filed with
the Commission, and (iii) such other reports and documents as a holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing a holder to sell any such Registrable Securities without
registration. After the occurrence of the Initial Public Offering, the Company
agrees to use its best efforts to facilitate and expedite transfers of the
Shares pursuant to Rule 144 under the Securities Act, which efforts shall
include timely notice to its transfer agent to expedite such transfers of
Shares.
ARTICLE V
TRANSFER OF REGISTRATION RIGHTS
-------------------------------
Section 5.1 Transfer of Registration Rights. The rights to register
-------------------------------
securities granted by the Company under this Agreement may be assigned by any
holder of the Registrable Securities provided that (i) any assignee or
transferee of the Registrable Securities acquires at least ten percent (10%) of
the Registrable Securities purchased by the Investor on the date hereof and is
not a competitor of the Company, or is a general or limited partner or officer
or director of the Investor or its affiliates, including, but not limited to,
their immediate family, irrevocable trusts for estate planning purposes and
personal representatives;; (ii) such transfer may otherwise be and is effected
in accordance with applicable securities laws; and (iii) such assignee or
transferee agrees in writing to be bound by all of the provisions of this
Agreement.
ARTICLE VI
MISCELLANEOUS
-------------
Section 6.1. No Waiver; Cumulative Remedies. No failure or delay on the
------------------------------
part of any party to this Agreement in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
These remedies are cumulative and not exclusive of any remedies provided by law.
Section 6.2. Amendments, Waivers and Consents. Any provision in this
--------------------------------
Agreement to the contrary notwithstanding, and except as hereafter provided,
changes in, termination or amendments of or additions to this Agreement may be
made, and compliance with any covenant or provision set forth herein may be
omitted or waived, if the Company (i) shall obtain consent thereto in writing
from the holder or holders of at least a majority in interest of the then
outstanding principal amount of the Notes and (ii) shall deliver copies of such
consent in writing to any holders who did not execute such consent; provided,
---------
that, no consents shall be effective to reduce the percentage in interest of the
----
Notes the consent of the holders of which is required under this Section 6.2.
Any waiver or consent may be given subject to satisfaction of conditions stated
therein and any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
Section 6.3. Addresses for Notices. All notices, requests demands and
---------------------
other communications required by this Agreement shall be in writing (including
telegraphic communication) and mailed, telegraphed or delivered to each
applicable party at the address set forth in Exhibit 6.3 hereto or at such other
-----------
address any party may inform the party in writing in compliance with this
Section.
All such notices, requests, demands and other communications shall, when
mailed (which mailing must be accomplished by first class mail, postage prepaid,
electronic facsimile transmission, express overnight courier service, or
registered mail, return receipt requested) or telegraphed, and shall be
considered to be delivered three (3) days after dispatch.
Section 6.4. Binding Effect; Assignment. This Agreement shall bind and
--------------------------
inure to the benefit of the parties and their respective heirs, successors and
assigns, except that the Company shall not have the right to delegate its
obligations hereunder or to assign its rights hereunder or any interest herein
without the prior written consent of the holders of at least a majority in
interest of the Registrable Securities.
Section 6.5. Prior Agreements. This Agreement constitutes the entire
----------------
agreement between the parties and supersedes any prior understandings or
agreements concerning the subject matter hereof.
Section 6.6. Severability. The provisions of this Agreement are severable
------------
and, in the event that any court of competent jurisdiction shall determine that
any one or more of the provisions or part of a provision contained in this
Agreement, for any reason, is invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision or part of a provision of this Agreement, but this Agreement shall be
reformed and construed as if such invalid or illegal or unenforceable provision,
or part of a provision, had never been contained herein, and such provisions or
part reformed so that it would be valid, legal and enforceable to the maximum
extent possible.
Section 6.7. Governing Law TC{ REF _Ref423758297 \r\h\00 Jurisdiction and
-------------------------------------------
Venue"\f C\1 "2". This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Delaware, and without giving
effect to choice of law provisions.
Section 6.8. Damages. The Company recognizes and agrees that the holder
-------
of Registrable Securities will not have an adequate remedy if the Company fails
to comply with this Article V and that damages may not be readily ascertainable,
and the Company expressly agrees that, in the event of such failure, it shall
not oppose an application by the holder of Registrable Securities or any other
Person entitled to the benefits of this Article V requiring specific performance
of any and all provisions hereof or enjoining the Company from continuing to
commit any such breach of this Article V.
Section 6.9. Headings. Article, section and subsection headings in this
--------
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 6.10.Counterparts. This Agreement may be executed in any number
------------
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 6.11.Further Assurances. From and after the date of this
------------------
Agreement, on the request of any party, the other parties shall execute and
deliver such instruments documents and other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement.
IN WITNESS, the undersigned have executed this Registration Rights
Agreement as the day and year first above written.
CHANA SASHA FOUNDATION
By: /s/ Xxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxx
--------------------------------
Title: President
--------------------------------
INTERNET CAPITAL GROUP L.L.C.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------
Title: President & CEO
--------------------------------
SMART TECHNOLOGY VENTURES LLC
By: /s/ Xxxxx Xxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxx
--------------------------------
Title: Chief Investment Officer
--------------------------------
XXXXXXXX FOREIGN PARTNERS, L.P.
By: Xxxxxxxx Partners, LLC, General Partner
By: /s/ Xxxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxxx Xxxxxx
--------------------------------
Title: Vice President
--------------------------------
XXXXXXX EQUITIES
By: /s/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
--------------------------------
Title: General Partner
--------------------------------
/s/ Xxxxx Xxxxxxx
-------------------------------------
XXXXX XXXXXXX
VERTICALNET, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
--------------------------------
Title: Vice President Finance and CFO
--------------------------------
ENERTECH CAPITAL PARTNERS, L.P.
By: /s/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
--------------------------------
Title: Managing Director
--------------------------------
XXXXXXX, X.X.
By: /s/
--------------------------------
Name:
--------------------------------
Title: President, Xxxxxxx Mngt., G.P.
--------------------------------
SOUTH FERRY BUILDING COMPANY
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxx
--------------------------------
Title: General Partner
--------------------------------
XXXXXXXX PARTNERS, L.P.
By: Xxxxxxxx Partners, LLC, General Partner
By: /s/ Xxxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxxx Xxxxxx
--------------------------------
Title: Vice President
--------------------------------
/s/ Xxx Xxxxxxx
-------------------------------------
XXX XXXXXXX
