REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement (this "Agreement") dated as of June 30, 1999,
by and among XXXXXXXX.XXX, INC., a Delaware corporation (the "Company"), and XXX
X. XXXXXX, a natural person ("DBL"), XXXXX X. XXXXXX, a natural person ("PAF"),
XXXXXXX X. XXXXXX, a natural person ("RDF"), CAPITAL EXPRESS, L.L.C., a New
Jersey limited liability company ("CapEx"), INTERNET WEB BUILDERS, L.L.C., a New
Jersey limited liability company ("IWB"), PALISADE PRIVATE PARTNERSHIP L.P., a
Delaware limited partnership ("PPP"), STAPLES, INC., a Delaware corporation
("Staples"), and the Persons named as purchasers (the "Investors") of the
Company's Series A Convertible Preferred Stock pursuant to the Series A
Convertible Preferred Stock Purchase Agreement of even date herewith (the
"Purchase Agreement").
PREAMBLE
WHEREAS, the Company and DBL, PAF, RDF, CapEx, IWB, PPP and Staples
(collectively, the "Existing Stockholders") are parties to a Shareholders'
Agreement, dated as of January 5, 1998, as amended (the "Shareholders
Agreement") and desire to amend and restate the Shareholders' Agreement and
amend and restate in this Agreement the obligations with respect to the
registration rights set forth in Section 9 of the Shareholders' Agreement, which
amendment and restatement shall for all purposes subsume, supersede and replace
the registration rights set forth in the Shareholders' Agreement.
WHEREAS, in order to induce the Investors to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement; and
WHEREAS, the execution and delivery of this Agreement is a condition to
closing under the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company, the
Existing Stockholders and the Investors agree as follows:
1. Definitions
As used in this Agreement, the following capitalized terms shall have the
following meanings:
CapEx Investors: CapEx and each other Person, other than the Company or an
affiliate of the Company, who (i) at any time acquires any Registrable
Securities directly or indirectly from CapEx in a transaction or chain of
transactions not involving a public offering within the meaning of the
Securities Act and (ii) was assigned, by the CapEx Investor from whom such
Registrable Securities were acquired, the registration rights of the CapEx
Investor hereunder with respect to such Registrable Securities, together with
the successors and assigns, heirs and personal representatives of each of the
foregoing, in each case for so long as any such Person continues to hold
Registrable Securities; provided, however, that no such other Person shall
constitute a CapEx Investor unless each Person to whom any such transfer is made
shall, contemporaneously with such transfer and by written instrument, become a
party to, and a "Stockholder" under, and accept and adopt the terms and
provisions of, this Agreement.
Common Stock: Common Stock of the Company, par value $ 0.001 per share as
constituted on the date hereof, and any capital stock into which such Common
Stock may hereafter be changed, and such term shall also include (unless the
context clearly indicates otherwise) (i) capital stock of the Company of any
other class or series (regardless of how denominated) issued to the holders of
shares of Common Stock upon any reclassification thereof which is also not
preferred as to dividends or assets on liquidation over any other class or
series of capital stock of the Company and which is not subject to redemption
and (ii) shares of common stock of any successor or acquiring corporation or any
affiliate thereof which are issued or may be issuable to any Stockholders in the
circumstances contemplated by Section 13(k).
Convertible Preferred Stock: Series A Convertible Preferred Stock of the
Company, par value $0.001 per share.
Demand Registration: See Section 3(a) hereof.
DPR Investors: DBL, PAF, RDF and each other Person, other than the Company
or an affiliate of the Company, who (i) at any time acquires any Registrable
Securities directly or indirectly from any of DBL, PAF or RDF in a transaction
or chain of transactions not involving a public offering within the meaning of
the Securities Act and (ii) was assigned, by the DPR Investor from whom such
Registrable Securities were acquired, the registration rights of the DPR
Investor hereunder with respect to such Registrable Securities, together with
the successors and assigns, heirs and personal representatives of each of the
foregoing, in each case for so long as any such Person continues to hold
Registrable Securities; provided, however, that no such other Person shall
constitute a DPR Investor unless each Person to whom any such transfer is made
shall, contemporaneously with such transfer and by written instrument, become a
party to, and a "Stockholder" under, and accept and adopt the terms and
provisions of, this Agreement.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder by the SEC.
Exchangeable Preferred Stock: Exchangeable Preferred Stock of the Company,
par value $0.001 per share.
Indemnified Holder: See Section 8(a) hereof.
Initial Public Offering: The initial underwritten sale of equity securities
by the Company pursuant to an effective registration statement under the
Securities Act.
IWB Investors: IWB and each other Person, other than the Company or an
affiliate of the Company, who (i) at any time acquires any Registrable
Securities directly or indirectly from IWB in a transaction or chain of
transactions not involving a public offering within the meaning of the
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Securities Act and (ii) was assigned, by the IWB Investor from whom such
Registrable Securities were acquired, the registration rights of the IWB
Investor hereunder with respect to such Registrable Securities, together with
the successors and assigns, heirs and personal representatives of each of the
foregoing, in each case for so long as any such Person continues to hold
Registrable Securities; provided, however, that no such other Person shall
constitute a IWB Investor unless each Person to whom any such transfer is made
shall, contemporaneously with such transfer and by written instrument, become a
party to, and a "Stockholder" under, and accept and adopt the terms and
provisions of, this Agreement.
NASD: National Association of Securities Dealers, Inc.
Person: An individual, partnership, corporation, limited liability company,
joint venture, trust or unincorporated organization, or a government or agency
or political subdivision thereof of whatever nature.
PPP Investors: PPP and each other Person, other than the Company or an
affiliate of the Company, who (i) at any time acquires any Registrable
Securities directly or indirectly from PPP in a transaction or chain of
transactions not involving a public offering within the meaning of the
Securities Act and (ii) was assigned, by the PPP Investor from whom such
Registrable Securities were acquired, the registration rights of the PPP
Investor hereunder with respect to such Registrable Securities, together with
the successors and assigns, heirs and personal representatives of each of the
foregoing, in each case for so long as any such Person continues to hold
Registrable Securities; provided, however, that no such other Person shall
constitute a PPP Investor unless each Person to whom any such transfer is made
shall, contemporaneously with such transfer and by written instrument, become a
party to, and a "Stockholder" under, and accept and adopt the terms and
provisions of, this Agreement.
Prospectus: The prospectus 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 the
Registration Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments to the Registration Statement of
which such prospectus is a part and all material incorporated by reference in
such prospectus.
Registration Expenses: See Section 7(a)(9) hereof.
Registrable Securities: Any and all shares of Common Stock which (i) at any
time and from time to time are issued or issuable upon exercise, in whole or in
part, of any Right owned by any of DBL, PAF, RDF, CapEx, IWB, PPP and Staples on
the date of this Agreement, (ii) are owned by any of DBL, PAF, RDF, CapEx, IWB,
PPP and Staples on the date of this Agreement, (iii) at any time and from time
to time are issued or issuable upon exercise, in whole or in part, of the
conversion of the Convertible Preferred Stock or the exercise of the warrants
acquired by the Investors pursuant to the Purchase Agreement, (iv) or are issued
or are issuable to the holders of any Registrable Securities or would be issued
or issuable upon the exercise of any Rights referred to in clauses (i) or (iii)
of this sentence by reason of the declaration or payment of a dividend or other
distribution or any stock split issued to the holders of Registrable Securities,
or (v) are issued or issuable pursuant to a stock dividend, stock split or other
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distribution with respect to Common Stock, or issued to any of them in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization; provided, however, that any Registrable Security shall
cease to be a Registrable Security if (a) a registration statement under the
Securities Act covering such Registrable Security shall have been declared
effective by the Commission and such Registrable Security shall have been
disposed of pursuant to such registration statement, (b) such Registrable
Security shall have been sold in a transaction which satisfies the requirements
of paragraph (f) of Rule 144 under the Securities Act (as such paragraph is in
effect on the Issue Date) and, if such transaction is a "brokers' transaction"
referred to in such paragraph of Rule 144, also satisfies the requirements of
paragraph (g) of Rule 144 under the Securities Act (as such paragraph is in
effect on the Issue Date), or (c) such Registrable Security is no longer held by
a Stockholder.
Registration Statement: Any registration statement of the Company that
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 material incorporated by reference in such Registration Statement.
Rights: Any options, warrants, convertible or exchangeable securities or
other rights, however denominated, to subscribe for, purchase or otherwise
acquire any equity interest or other security of any class or series, with or
without payment of additional consideration in cash or property, either
immediately or upon the occurrence of a specified date or a specified event or
the satisfaction or happening of any other condition or contingency.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder by the SEC.
SEC: The Securities and Exchange Commission.
Series A Investors: The Investors and each other Person, other than the
Company or an affiliate of the Company, who (i) at any time acquires any
Registrable Securities directly or indirectly from the Investors in a
transaction or chain of transactions not involving a public offering within the
meaning of the Securities Act and (ii) was assigned, by the Series A Investor
from whom such Registrable Securities were acquired, the registration rights of
the Series A Investor hereunder with respect to such Registrable Securities,
together with the successors and assigns, heirs and personal representatives of
each of the foregoing, in each case for so long as any such Person continues to
hold Registrable Securities; provided, however, that no such other Person shall
constitute a Series A Investor unless each Person to whom any such transfer is
made shall, contemporaneously with such transfer and by written instrument,
become a party to, and a "Stockholder" under, and accept and adopt the terms and
provisions of, this Agreement.
Staples Investors: Staples and each other Person, other than the Company or
an affiliate of the Company, who (i) at any time acquires any Registrable
Securities directly or indirectly from Staples in a transaction or chain of
transactions not involving a public offering within the meaning of the
Securities Act and (ii) was assigned, by the Staples Investor from whom such
Registrable Securities were acquired, the registration rights of the Staples
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Investor hereunder with respect to such Registrable Securities, together with
the successors and assigns, heirs and personal representatives of each of the
foregoing, in each case for so long as any such Person continues to hold
Registrable Securities; provided, however, that no such other Person shall
constitute a Staples Investor unless each Person to whom any such transfer is
made shall, contemporaneously with such transfer and by written instrument,
become a party to, and a "Stockholder" under, and accept and adopt the terms and
provisions of, this Agreement.
Stockholder: Each Person who is a DPR Investor, a CapEx Investor, or a IWB
Investor, each of PPP, Staples and the Investors and each other Person, other
than the Company or an affiliate of the Company, who (i) at any time acquires
any Registrable Securities directly or indirectly from such Stockholder in a
transaction or chain of transactions not involving a public offering within the
meaning of the Securities Act and (ii) was assigned, by such Person from whom
such Registrable Securities were acquired, the registration rights of such
Stockholder hereunder with respect to such Registrable Securities, together with
the successors and assigns, heirs and personal representatives of each of the
foregoing, in each case for so long as any such Stockholder continues to hold
Registrable Securities; provided, however, that no such other Person shall
constitute a Stockholder unless each Person to whom any such transfer is made
shall, contemporaneously with such transfer and by written instrument, become a
party to, and a "Stockholder" under, and accept and adopt the terms and
provisions of, this Agreement.
2. Securities Subject to this Agreement
(a) Registrable Securities. The securities entitled to the benefits of this
Agreement are the Registrable Securities.
(b) Holders of Registrable Securities. A Person is deemed to be a holder of
Registrable Securities whenever such Person owns of record Registrable
Securities or has the Right to acquire such Registrable Securities, whether or
not such acquisition has actually been effected and disregarding any legal
restrictions upon the exercise of such right.
3. Demand Registration
(a) Request for Registration by Certain Holders of Registrable Securities.
(i) If the Company has not effected an Initial Public Offering prior to or on
June 30, 2004, and after June 30, 2004 the Company receives from the holders
representing at least forty percent (40%) of the Registrable Securities then
held by the DPR Investors, the CapEx Investors, the IWB Investors, the Staples
Investors, the PPP Investors or the Series A Investors, in the aggregate, a
written request that the Company effect a registration or qualification of such
Registrable Securities, and (ii) at any time during the period commencing six
months following the effective date of the registration statement in respect of
the Initial Public Offering of securities of the Company (or any successor
entity to the Company through merger, reorganization, exchange, transfer or
otherwise), the Company receives from the holder(s) representing a majority of
the Registrable Securities then held by the DPR Investors, the CapEx Investors,
the IWB Investors, the Staples Investors, the PPP Investors or the Series A
Investors, as the case may be, a written request that the Company effect a
registration or qualification of such Registrable Securities (each right under
clause (i) and (ii) of this Section 3(a), a "Demand Registration"), the Company
will:
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(1) promptly give written notice of the proposed registration or
qualification to all other holders of Registrable Securities held by the DPR
Investors, the CapEx Investors, the IWB Investors, the Staples Investors, the
PPP Investors or the Series A Investors, as the case may be, which holders may
request in writing within 20 days after receipt of such notice that Registrable
Securities held by them be included in such Demand Registration, and the number
of Registrable Securities requested to be so included shall be deemed a part of
such Demand Registration; and
(2) as soon as practicable, use commercially reasonable efforts to
effect such registration or qualification in the manner provided in this
Agreement as may be so requested and as is reasonably necessary to permit or
facilitate the sale and distribution of all or such portion of such holder's or
holders' Registrable Securities as is specified in such request; provided that
the Company will not be obligated to effect more than (x) one (1) Demand
Registration pursuant to a request under clause (i) of this Section 3(a), and
(y) one (1) Demand Registration for each of the DPR Investors, the CapEx
Investors, the IWB Investors, the Staples Investors, the PPP Investors and the
Series A Investors pursuant to a request under clause (ii)of this Section 3(a).
Notwithstanding anything to the contrary contained in this Agreement, the
Company will have no obligation to effect a Demand Registration if the number of
shares of the Company a holder or holders of Registrable Securities have
requested to be registered could be sold by them pursuant to Rule 144 of the
Securities Act in any three-month period without registration in compliance with
Rule 144 of the Securities Act.
(b) Effective Registration and Expenses. A registration of Registrable
Securities will not count as a Demand Registration until it has become effective
and has remained effective for 180 days or until all of the Registrable
Securities included therein have been sold, if earlier. The Company will pay all
Registration Expenses (as hereinafter defined) in connection with any
registration initiated as a Demand Registration, whether or not it becomes
effective.
(c) Priority on Demand Registrations. If the holder or holders of a majority
in number of the Registrable Securities to be registered in a Demand
Registration under this Section 3 so elect, the offering of such Registered
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. In such event, if the managing underwriter or
underwriters of such offering advise the Company and the holders in writing that
in its or their opinion the number of Registrable Securities requested to be
included in such offering exceeds the number of securities that can be sold in
such offering without an adverse affect on such offering, then the Company will
include in such registration the maximum amount of Registrable Securities which
in the opinion of such managing underwriter or underwriters can be sold without
any such adverse effect. Subject to the advice of the managing underwriter or
underwriters concerning the size, composition and pricing of the offering, the
Company will include Registrable Securities or other Common Stock in such
registration in accordance with the following priorities: (i) first, pro rata
among all holders of Registrable Securities who have requested to be included in
such registration pursuant to Section 3(a) (i.e., a demand registration right)
hereof, in proportion to the number of shares each such holder requested to be
included in the offering; and (ii) second, pro rata among all holders of
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Registrable Securities who have requested to be included in such registration
pursuant to Section 4 hereof, in proportion to the number of shares each such
holder requested to be included in the offering; and (iii) third, the Common
Stock of other holders of Common Stock of the Company who have requested to be
included in such registration pursuant to piggy-back registration provisions of
other registration rights agreements, and any additional shares of Common Stock
proposed to be issued or sold for the account of the Company, all in accordance
with the applicable agreements between the Company and such other holders.
(d) Selection of Underwriters. If any Demand Registration is to be in the
form of an underwritten offering, the investment banker or bankers and manager
or managers that will administer the offering will be selected by the holders of
a majority of the stockholders exercising demand registration rights under
Section 3(a); provided that such investment bankers and managers must be
reasonably satisfactory to the Company.
(e) Restrictions on Demand Registrations. Notwithstanding the foregoing
provisions, (i) the Company shall not be obligated to effect any registration if
such registration would require an audit of the Company's financial statements
for a period as of a date other than its fiscal year end unless the holders of
Registrable Securities requesting such registration agree to bear responsibility
for the expenses of such an audit; (ii) the Company may defer the filing of a
Registration Statement hereunder or delay the processing and effectiveness
thereof for a period of up to 90 days based on the good faith judgment of the
Board of Directors of the Company, that such delay is needed to avoid premature
disclosure of a matter the Board has determined should not, in the best
interests of the Company, and otherwise need not, be currently disclosed
including, without limitation, that a material acquisition or disposition by the
Company is being negotiated or has been publicly announced or that such
registration statement would have a material adverse effect on the Company;
provided, that the Company shall be entitled to exercise such deferment only
once during any twelve month period; and (iii) the Company shall not be
obligated to effect a Demand Registration within 180 days after the effective
date of any previous underwritten registration of Common Stock, whether or not
made pursuant to this Section. If applicable, the Company shall furnish to the
holder or holders of Registrable Securities requesting a Registration Statement
pursuant to this Section 3 a certificate signed by the President of the Company
stating the Company has deferred the filing of a registration statement pursuant
to clause (ii) hereof.
(f) Preemption by the Company. Notwithstanding the foregoing provisions of
this Section 3, at any time any holder of Registrable Securities shall request a
Demand Registration pursuant to this Section 3, the Company may elect at that
time to effect a firm commitment underwritten primary registration if the
Company's Board of Directors believes that such primary registration would be in
the best interests of the Company or if the managing underwriters for the
requested Demand Registration advise the Company in writing that in their
opinion in order to sell the Registrable Securities to be sold the Company
should include its own securities. Promptly after receiving a written request
for a Demand Registration, the Company shall meet with the managing
underwriters, if any, and shall decide whether or not to effect an underwritten
primary registration on behalf of the Company. If the Company elects to effect a
primary registration after receiving a request for a Demand Registration, (i)
the Company shall give prompt written notice (and in any event within 15 days of
receiving a written request for a Demand Registration) to all holders of
Registrable Securities of its intention to effect such a registration and shall
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afford such holders the right to Piggyback Registrations contained in Section 4
hereof, (ii) such registration shall not count as a Demand Registration for
purposes of this Section 3, and (iii) the Company shall have the sole discretion
to designate the managing underwriter or underwriters to be used in connection
with such registration.
4. Piggy-Back Registration.
If the Company at any time or from time to time subsequent to the date of
this Agreement proposes to register any securities under the Securities Act
either for its own account or the account of any selling security holders (other
than pursuant to (i) a registration statement on Forms S-4 or S-8 or any
successor or similar forms, (ii) a registration relating solely to a Commission
Rule 145 offering, or (iii) a registration on any form that does not permit
secondary sales), the Company shall:
(a) give to each holder of a Registrable Security written notice thereof at
least 20 days in advance of the filing of any registration statement in respect
thereof (which notice will include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the applicable blue
sky or other state securities laws, the proposed offering price, and the plan of
distribution);
(b) include in such registration (and any related qualification under blue
sky laws or other compliance), and in any underwriting involved therein, all the
Registrable Securities specified in a written request or requests, made within
20 days after receipt of such written notice from the Company, by any holder or
holders of Registrable Securities;
(c) use commercially reasonable efforts to cause the managing underwriter or
underwriters of such proposed underwritten offering to permit the Registrable
Securities requested to be included in the Registration Statement for such
offering to be included on the same terms and conditions as any similar
securities of the Company included therein. Notwithstanding the foregoing, if
the managing underwriter or underwriters of such offering deliver a written
opinion to the holders of such Registrable Securities that marketing
considerations require a limitation on the number of shares of Common Stock or
other Registrable Securities offered pursuant to any Registration Statement
subject to this Section, then subject to the advice of said managing underwriter
or underwriters as to the size and composition of the offering, the Company will
include Common Stock and other Registrable Securities in such registration in
accordance with the following priorities: (i) first, if such offering is a
secondary offering on behalf of other holders of securities of the Company
pursuant to a contractual obligation of the Company to register such securities
(i.e., a demand registration right), the securities to be sold for the account
of such holders; (ii) second, pro rata among holders of Registrable Securities
who hold Registrable Securities that were requested to be included in a
registration statement pursuant to Section 3(a) but were not included in such
offering pursuant to the terms of Section 3(c), in proportion to the number of
shares each such holder requested to be included in the offering but were not
included in such offering; (iii) third, Common Stock to be sold for the account
of the Company; (iv) fourth, pro rata with respect to all holders of Registrable
Securities or other Common Stock of the Company who have requested to be
included in the registration pursuant to this Section 4; and (v) pursuant to
other, analogous piggy-back registration provisions of other agreements, in
proportion to the number of shares each such holder requested to be included in
the offering pursuant to their piggy-back rights. The Company will bear all
Registration Expenses in connection with a piggy-back registration.
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Notwithstanding the foregoing, if at any time after giving written notice of
its intention to register its equity securities and before the effectiveness of
the Registration Statement filed in connection with such registration, the
Company determines for any reason either not to effect such registration or to
delay such registration, the Company may, at its election, by delivery of
written notice to each holder of Registrable Securities (A) in the case of a
determination not to effect registration, relieve itself of its obligation to
register the Registrable Securities in connection with such registration or (B)
in the case of a determination to delay registration, delay the registration of
such Registrable Securities for the same period as the delay in the registration
of such other equity securities.
Holders of Registrable Securities may exercise piggy-back registration
rights under this Section 4 at any time or from time to time, so long as such
holders continue to hold Registrable Securities.
5. Hold-Back Agreements
(a) Restrictions on Public Sale by Holder of Registrable Securities. Each
holder of Registrable Securities agrees not to effect any public sale or
distribution of securities of the Company of the same class as the securities
included in a Registration Statement, including a sale pursuant to Rule 144
under the Securities Act, during the 7-day period prior to, and during the
period (up to 180 days) following, the effective date of such Registration
Statement for each underwritten offering made pursuant to such Registration
Statement, to the extent requested in writing by the managing underwriters
(except as part of such underwritten registration, if permitted); provided,
however, that the hold-back period shall not be longer than the hold-back period
agreed to in writing by the Company's executive officers and directors.
(b) Restrictions on Public Sale by the Company and Others. The Company
agrees:
(1) not to effect any public or private sale or distribution of its
equity securities, including a sale pursuant to Regulation D under the
Securities Act, during the 7-day period prior to, and during the period (up to
180 days) following, the effective date of the Registration Statement for each
underwritten offering made pursuant to a Registration Statement filed under
Section 3 hereof, to the extent requested in writing by the managing
underwriters (except as part of such underwritten registration or pursuant to
registrations on Forms S-4 or S-8 or any successor form to such Forms), and
(2) to endeavor to cause each holder of its privately placed equity
securities issued by the Company at any time on or after the date of this
Agreement to agree not to effect any public sale or distribution, including a
sale pursuant to Rule 144 under the Securities Act, of any such securities
during the period set forth in clause (1) above, to the extent requested in
writing by the managing underwriters (except as part of such underwritten
registration, if permitted). The Company shall not be obligated to incur any
costs or expenses in connection with its obligations under this Section 5(b)(2).
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6. Registration Procedures
In connection with the Company's registration obligations pursuant to
Sections 3 and 4 hereof, the Company will use commercially reasonable efforts to
effect such registration to permit the sale of such Registrable Securities in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company will as expeditiously as possible but in no event
later than 30 days after receipt of a request for registration pursuant to the
terms of Section 3 or 4:
(a) before filing a Registration Statement or Prospectus or any amendments
or supplements thereto, furnish to the counsel selected by the holders of a
majority of the Registrable Securities covered by such Registration Statement
and the underwriters, if any, copies of all such documents proposed to be filed,
which documents will be made available for prior review and comment by such
counsel;
(b) prepare and file with the SEC a Registration Statement and such
amendments and post-effective amendments to any Registration Statement, and such
supplements to the Prospectus, as may be required by the rules, regulations or
instructions applicable to the registration form utilized by the Company or by
the Securities Act or otherwise necessary to keep such Registration Statement
continuously effective; and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such Registration
Statement during the one-year period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement or
supplement to the Prospectus;
(c) notify the selling holders of Registrable Securities and the managing
underwriters, if any, promptly, and (if requested by any such Person) confirm
such advice in writing,
(1) when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to the Registration Statement or any
post-effective amendment, when the same has become effective,
(2) of any request by the SEC for amendments or supplements to the
Registration Statement or the Prospectus or for additional information,
(3) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation or threatening of
any proceedings for that purpose,
(4) if at any time the representations and warranties of the Company
contemplated by paragraph (n) below cease to be true and correct,
(5) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, and
(6) of the existence of any fact which results in the Registration
Statement, the Prospectus or any document incorporated therein by reference
containing an untrue statement of material fact or omitting to state a material
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fact required to be stated therein or necessary to make the statements therein
not misleading;
(d) use reasonable efforts to prevent the issuance of any stop order or to
obtain the withdrawal of any order suspending the effectiveness of the
Registration Statement as soon as practicable;
(e) if reasonably requested by the managing underwriter or underwriters or a
holder of Registrable Securities being sold in connection with an underwritten
offering, immediately incorporate in a Prospectus supplement or post-effective
amendment such necessary information as the managing underwriters or the holders
of a majority in number of the Registrable Securities being sold reasonably
request to have included therein relating to the plan of distribution with
respect to such Registrable Securities, including, without limitation,
information with respect to the amount of Registrable Securities being sold to
such underwriters, the purchase price being paid therefor by such underwriters
and with respect to any other terms of the underwritten (or best efforts
underwritten) offering of the Registrable Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as notified of the matters to be incorporated
in such Prospectus supplement or post-effective amendment;
(f) at the request of any selling holder of Registrable Securities, furnish
to such selling holder of Registrable Securities and each managing underwriter,
without charge, at least one copy of the Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
all documents incorporated therein by reference and all exhibits (including
those incorporated by reference);
(g) deliver to each selling holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such Persons may reasonably request; the Company consents to the use of the
Prospectus or any amendment or supplement thereto by each of the selling holders
of Registrable Securities and the underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by the Prospectus or any
amendment or supplement thereto;
(h) prior to any public offering of Registrable Securities, use commercially
reasonable efforts to register or qualify or cooperate with the selling holders
of Registrable Securities, the underwriters, if any, and their respective
counsel in connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions as any seller or underwriter reasonably requests in writing and do
any and all other acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by the
Registration Statement; provided that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process or taxation in any such jurisdiction where it is not then so subject;
(i) cooperate with the selling holders of Registrable Securities and the
managing underwriters, if any, to facilitate the timely preparation and delivery
11
of certificates representing Registrable Securities to be sold and not bearing
any restrictive legends; and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request at least two business days prior to any sale of Registrable Securities
to the underwriters;
(j) use commercially reasonable efforts to cause the Registrable Securities
covered by the applicable Registration Statement to be registered with or
approved by such other United States federal or state governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof and the
underwriters, if any, to consummate the disposition of such Registrable
Securities;
(k) if any fact contemplated by paragraph (c)(6) above shall exist, prepare
a supplement or post-effective amendment to the Registration Statement or the
related Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities, the Prospectus will not contain an untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(l) use commercially reasonable efforts to cause all Registrable Securities
covered by the Registration Statement to be listed on each securities exchange
or automated quotation system on which similar securities issued by the Company
are then listed, if requested by the holders of a majority in number of such
Registrable Securities or by the managing underwriters, if any;
(m) not later than the effective date of the applicable Registration
Statement, provide a CUSIP number for all Registrable Securities and provide the
applicable trustee(s) or transfer agent(s) with printed certificates for the
Registrable Securities which are in a form eligible for deposit with The
Depositary Trust Company;
(n) enter into customary agreements (including underwriting agreements) and
take all other appropriate actions in order to expedite or facilitate the
disposition of such Registrable Securities and in such connection, whether or
not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration:
(1) make such representations and warranties and indemnities to the
holders of such Registrable Securities and the underwriters, if any, in form,
scope and substance as are customarily made by issuers to underwriters in
primary underwritten offerings;
(2) obtain opinions of counsel to the Company and updates thereof
addressed to each selling holder and the underwriters, if any, covering the
matters customarily covered in opinions requested in underwritten offerings;
(3) obtain "cold comfort" letters and updates thereof from the Company's
independent certified public accountants addressed to the selling holders of
Registrable Securities and the underwriters, if any, such letters to be in
customary form and covering matters of the type customarily covered in "cold
comfort" letters to underwriters in connection with primary underwritten
12
offerings (provided that the Registrable Securities constitute at least 10% of
the securities covered by such Registration Statement);
(4) deliver such documents and certificates as may be reasonably
requested by the holders of a majority of the Registrable Securities being sold
and the managing underwriters, if any, to evidence compliance with paragraph (k)
above and with any customary conditions contained in the underwriting agreement
or other agreement entered into by the Company.
(o) subject to the execution of confidentiality agreements in form and
substance satisfactory to the Company, make available to a representative of the
holders of a majority in number of the Registrable Securities being registered
pursuant to such Registration Statement, any underwriter participating in any
disposition pursuant to such Registration Statement, and any attorney or
accountant retained by the sellers or underwriter all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all information
reasonably requested by any such representative, underwriter, attorney or
accountant in connection with the registration, with respect to each at such
time or times as the Company shall reasonably determine; provided that any
records, information or documents that are designated by the Company in writing
as confidential shall be kept confidential by such Persons unless disclosure of
such records, information or documents (i) is required by court or
administrative order; (ii) becomes generally available to the public other than
as a result of a disclosure by such Persons; (iii) was available to such Persons
on a non-confidential basis prior to its disclosure by the Company, as shown by
prior written record, or (iv) becomes available to such Persons on a
non-confidential basis from a source other than the Company or its
representatives, provided that such source is not known by such Persons to be
bound by a confidentiality agreement with or other obligation of secrecy to the
Company.
(p) otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make generally available to its
security holders earnings statements satisfying the provisions of Section 11(a)
of the Securities Act, no later than 45 days after the end of any 12-month
period (or 90 days, if such a period is a fiscal year) (1) commencing at the end
of any month in which Registrable Securities are sold to underwriters in an
underwritten offering, or, if not sold to underwriters in such an offering, (2)
beginning with the first month commencing after the effective date of the
Registration Statement, which statements shall cover said 12-month periods;
(q) cooperate and assist in any filings required to be made with the NASD
and in the performance of any due diligence investigation by any underwriter
(including any "qualified independent underwriter" that is required to be
retained in accordance with the rules and regulations of the NASD); and
(r) promptly prior to the filing of any document which is to be incorporated
by reference into the Registration Statement or the Prospectus (after initial
filing of the Registration Statement) provide copies of such document for review
and comment to counsel to the selling holders of Registrable Securities and to
the managing underwriters, if any, and make the Company's representatives
available for discussion of such document.
13
The Company may require each seller of Registrable Securities as to which
any registration is being effected to furnish to the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing.
Each holder of Registrable Securities agrees that to avail itself of the
rights afforded hereby, upon receipt of any notice from the Company of the
happening of any event of the kind described in paragraph (k) above, such holder
will forthwith discontinue disposition of Registrable Securities registered in a
Registration Statement until such holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by paragraph (k) above, or until
it is advised in writing by the Company that the use of the Prospectus may be
resumed, and has received copies of any additional or supplemental filings which
are incorporated by reference in the Prospectus, and, if so directed by the
Company, such holder will deliver to the Company (at the Company's expense) all
copies, other than permanent file copies then in such holder's possession, of
the Prospectus covering such Registrable Securities current at the time of
receipt of such notice.
Each holder of Registrable Securities agrees that to avail itself of the
rights afforded hereby, such holder shall (i) make such representations and
warranties and indemnities to the Company and the underwriters in form, scope
and substance as are customarily made by selling shareholders in primary
underwritten offerings; (ii) obtain opinions of counsel to such holder and
updates thereof (provided that such opinions shall be at the sole expense of the
Company) and addressed to the Company and the underwriter covering the matters
customarily covered in opinions requested in underwritten offerings; and (iii)
deliver such documents and certificates as may be reasonably requested by the
Company and the managing underwriters to ensure the Company's compliance with
Section 6(k) above.
In the event the Company shall give any such notice, the time periods
mentioned in Section 6(b) hereof shall be extended by the number of days during
the period from and including the date of the giving of such notice to and
including the date when each seller of Registrable Securities covered by such
Registration Statement either receives the copies of the supplemented or amended
prospectus contemplated by Section 6(k) hereof or is advised in writing by the
Company that the use of the Prospectus may be resumed.
7. Registration Expenses
(a) All expenses incident to the Company's performance of or compliance with
this Agreement will be paid by the Company, regardless whether a Registration
Statement becomes effective, including, without limitation:
(1) all registration and filing fees (including, without limitation,
with respect to filings required to be made with the NASD);
(2) fees and expenses of compliance with securities or blue sky laws
(including, without limitation, fees and disbursements of counsel for the
underwriters or selling holders in connection with blue sky qualifications of
the Registrable Securities and determination of their eligibility for investment
14
under the laws of such jurisdictions, as the managing underwriters or holders of
Registrable Securities being sold may designate);
(3) printing (including, without limitation, expenses of printing or
engraving certificates for the Registrable Securities in a form eligible for
deposit with The Depositary Trust Company and of printing prospectuses),
messenger, telephone and delivery expenses;
(4) fees and disbursements of counsel for the Company, for the
underwriters and for the selling holders of the Registrable Securities (subject
to the provisions of Section 7(b) hereof);
(5) fees and disbursements of all independent certified public
accountants of the Company (including, without limitation, the expenses of "cold
comfort" letters required by or incident to such performance);
(6) fees and disbursements of underwriters (excluding discounts,
commissions or fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals relating to the distribution of the
Registrable Securities or legal expenses of any Person other than the Company,
the underwriters and the selling holders);
(7) securities acts liability insurance if the Company so desires;
(8) fees and expenses of other Persons retained by the Company; and
(9) fees and expenses associated with any NASD filing required to be
made in connection with the Registration Statement, including, if applicable,
the fees and expenses of any "qualified independent underwriter" (and its
counsel) that is required to be retained in accordance with the rules and
regulations of the NASD (all such expenses being herein called "Registration
Expenses").
The Company will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with the listing of the securities to
be registered on each securities exchange on which similar securities issued by
the Company are then listed, rating agency fees and the fees and expenses of any
Person, including special experts, retained by the Company.
(b) In connection with each Registration Statement required hereunder, the
Company will reimburse the holders of Registrable Securities being registered
pursuant to such Registration Statement for the reasonable fees and
disbursements of not more than one counsel chosen by the holders of a majority
of such Registrable Securities being registered pursuant to such Registration
Statement; provided such counsel is reasonably acceptable to the Board of
Directors of the Company.
15
8. Indemnification
(a) Indemnification by the Company. The Company agrees to indemnify and hold
harmless each holder of Registrable Securities, and, if applicable, its
officers, directors, employees and agents and each Person who controls such
holder within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act (each such person being sometimes hereinafter referred to
as an "Indemnified Holder") from and against all losses, claims, damages and
liabilities, including all actual legal or other expenses reasonably incurred by
an Indemnified Holder in connection with investigating or defending against such
loss, claim, damage, liability or action, joint or several, to which such
Indemnified Holders may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except insofar as any such untrue statement or omission is
based upon information furnished in writing to the Company by such holder
expressly for use therein; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any preliminary
prospectus if the Prospectus would have completely corrected such untrue
statement or omission; and provided further, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission in the Prospectus, if
such untrue statement or alleged untrue statement, omission or alleged omission
is completely corrected in an amendment or supplement to the Prospectus and if,
having previously been furnished by or on behalf of the Company with copies of
the Prospectus as so amended or supplemented, such holder thereafter fails to
deliver such Prospectus as so amended or supplemented prior to or concurrently
with the sale of a Registrable Security to the person asserting such loss,
claim, damage, liability or expense who purchased such Registrable Security
which is the subject thereof from such holder. This indemnity will be in
addition to any liability which the Company may otherwise have. The Company will
also indemnify underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, their
officers and directors and each Person who controls such Persons (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
to the same extent as provided above with respect to the indemnification of the
Indemnified Holders of Registrable Securities.
If any action or proceeding (including any governmental investigation or
inquiry) shall be brought or asserted against an Indemnified Holder in respect
of which indemnity may be sought from the Company, such Indemnified Holder shall
promptly notify the Company in writing, and the Company shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
Indemnified Holder and the payment of all expenses. Such Indemnified Holder
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
shall be the expense of such Indemnified Holder unless (a) the Company has
agreed to pay such fees and expenses or (b) the Company shall have failed to
assume the defense of such action or proceeding or shall have failed to employ
counsel reasonably satisfactory to such Indemnified Holder in any such action or
proceeding or (c) such Indemnified Holder in its reasonable judgment has
16
separate defenses available or due to actual or potential material differing
interests between them (in which case, if such Indemnified Holder notifies the
Company in writing that it elects to employ separate counsel at the expense of
the Company, the Company shall not have the right to assume the defense of such
action or proceeding on behalf of such Indemnified Holder, it being understood,
however, that the Company shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys at any time for such Indemnified Holder and any
other Indemnified Holders, which firm shall be designated in writing by such
Indemnified Holders). The Company shall not be liable for any settlement of any
such action or proceeding effected without its written consent, but if settled
with its written consent, or if there be a final judgment for the plaintiff in
any such action or proceeding, the Company agrees to indemnify and hold harmless
such Indemnified Holders from and against any loss or liability by reason of
such settlement or judgment.
(b) Indemnification by Holder of Registrable Securities. Each holder of
Registrable Securities severally agrees to indemnify and hold harmless the
Company, its directors, officers, employees and agents and each Person, if any,
who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and each other holder of
Registrable Securities that participates in such offering to the same extent as
the foregoing indemnity from the Company to such holder, but only with respect
to information relating to such holder furnished in writing by such holder
expressly for use in any Registration Statement or Prospectus, or any amendment
or supplement thereto, or any preliminary prospectus. In case any action or
proceeding shall be brought against the Company or its directors or officers or
any such controlling person, in respect of which indemnity may be sought against
a holder of Registrable Securities, such holder shall have the rights and duties
given the Company and the Company or its directors or officers or such
controlling person shall have the rights and duties given to each holder by the
preceding paragraph. Notwithstanding the foregoing, if the Company is an
indemnified party, the Company shall designate the one counsel, and in all other
circumstances, the one counsel shall be designated by a majority in interest
based upon the Registrable Securities of the Indemnified parties. In no event
shall the liability of any selling holder of Registrable Securities hereunder be
greater in amount than the proceeds received by such holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
The Company and each other holder of Registrable Securities that
participates in such offering shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as provided
above with respect to information so furnished in writing by such Persons
specifically for inclusion in any Prospectus or Registration Statement or any
amendment or supplement thereto, or any preliminary prospectus.
(c) Contribution. If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof
(other than by reason of exceptions provided in those Sections) in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
17
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the Company, on
the one hand, and of the Indemnified Holder, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the Company, on the one hand, and of the Indemnified
Holder, on the other hand, 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 Company or by the Indemnified Holder and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in the second paragraph
of Section 8(a) hereof, any legal or other fees or expenses reasonably incurred
by such party in connection with investigating or defending any action or claim.
The Company and each holder of Registrable Securities agree that it would
not be just and equitable if contribution pursuant to this Section 8(c) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
8(c), an Indemnified Holder shall not be required to contribute any amount in
excess of the amount by which the total price at which the securities sold by
such Indemnified Holder or its affiliated Indemnified Holders and distributed to
the public were offered to the public exceeds the amount of any damages which
such Indemnified Holder, or its affiliated Indemnified Holders, has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
9. Rule 144.
The Company covenants that at all times after the effective date of the
first registration filed by the Company which involves a sale of securities of
the Company to the general public, 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 will take such further action as
any holder of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may
be amended from time to time or (b) any similar rule or regulation hereafter
adopted by the SEC. Upon the request of any holder of Registrable Securities,
the Company will deliver to such holder a written statement as to whether it has
complied with such information and requirements.
10. Participation in Underwritten Registrations.
(a) No holder (or its successors or assigns) may participate in any
underwritten registration hereunder unless such Person (a) agrees to sell such
Person's securities on the basis provided in any underwriting arrangements
18
approved by the underwriters and other 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.
(b) In the case of an underwritten offering by the Company of securities,
each holder of Registrable Securities shall, with respect to Registrable
Securities that such holder then desires to sell pursuant to Section 4, enter
into an underwriting agreement with the same underwriters engaged by the Company
with respect to securities being offered by the Company and the Company shall
cause such underwriters to include in any such underwriting all of the
securities that a holder of Registrable Securities then desires to sell;
provided, however, that such underwriting agreement is in substantially the same
form as the underwriting agreement that the Company enters into in connection
with the primary offering it is making, except for such differences in the
underwriting agreement as are generally customary to distinguish between an
issuer and its selling stockholders.
11. Restrictive Legend.
Each certificate representing Registrable Securities and Rights exercisable,
convertible or exchangeable for Registrable Securities shall, except as
otherwise provided in this Section 11 or in Section 12, be stamped or otherwise
imprinted with a legend substantially in the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933 or applicable state securities
laws. These securities have been acquired for investment and not with a view
to distribution or resale, and may not be sold mortgaged, pledged,
hypothecated or otherwise transferred without an effective registration
statement for such securities under the Securities Act of 1933 and
applicable state securities laws, or the availability of an exemption from
the registration provisions of the Securities Act of 1933 and applicable
state securities laws."
A certificate shall not bear such legend if in the opinion of counsel reasonably
satisfactory to the Company the securities being sold thereby may be publicly
sold without registration under the Securities Act.
12. Notice of Proposed Transfer.
Prior to any proposed transfer of any Registrable Securities (other than
under the circumstances described in Sections 3 or 4), the holder thereof shall
give written notice to the Company of its intention to effect such transfer.
Each such notice shall describe the manner of the proposed transfer and, if
requested by the Company, shall be accompanied by an opinion of counsel
reasonably satisfactory to the Company to the effect that the proposed transfer
may be effected without registration under the Securities Act, whereupon the
holder of such stock shall be entitled to transfer such stock in accordance with
the terms of its notice; provided, however, that no such opinion of counsel
shall be required for a transfer to one or more partners of the transferor (in
the case of a transferor that is a partnership), to one or more members of the
transferor (in the case of a transferor that is a limited liability company) or
19
to an affiliated corporation (in the case of a transferor that is a
corporation); provided, further, however, that any transferee other than a
partner or affiliate of the transferor shall execute and deliver to the Company
a representation letter in form reasonably satisfactory to the Company's counsel
to the effect that the transferee is acquiring Registrable Securities for its
own account, for investment purposes and without any view to distribution
thereof. Each certificate for Registrable Securities transferred as above
provided shall bear the legend set forth in Section 11, except that such
certificate shall not bear such legend if (i) such transfer is in accordance
with the provisions of Rule 144 (or any other rule permitting public sale
without registration under the Securities Act) or (ii) the opinion of counsel
referred to above is to the further effect that the transferee and any
subsequent transferee (other than an affiliate of the Company) would be entitled
to transfer such securities in a public sale without registration under the
Securities Act. The restrictions provided for in this Section 12 shall not apply
to securities which are not required to bear the legend prescribed by Section 11
in accordance with the provisions of that Section.
13. Miscellaneous.
(a) Remedies. Each holder of Registrable Securities, in addition to being
entitled to exercise all rights provided herein, and granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(b) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
unless the Company has obtained the written consent of holders of at least a
majority of the outstanding Registrable Securities; provided, however, that the
rights of the DPR Investors, the CapEx Investors, the IWB Investors, the Staples
Investors, PPP Investors and the Series A Investors to a Demand Registration may
not be amended or modified and a waiver or consent to the departure from the
applicable provisions relating thereto may not be given unless the Company has
obtained the written consent of the holders of at least a majority of the
outstanding Registrable Securities held by the DPR Investors, the CapEx
Investors, the IWB Investors, Staples Investors, PPP Investors or the Series A
Investors, as the case may be; provided, further, that no such amendment shall
unfairly discriminate against any particular holder of Registrable Securities
relative to the other holders thereof. Any action taken under this Section
unless as specifically provided herein, shall bind all holders of Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to departure from
the provisions hereof that relates exclusively to the rights of holders of
Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other holders of Registrable Securities may be given by the holders of
a majority of the Registrable Securities being sold.
(c) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, registered first-class
mail, telecopier, or air courier guaranteeing overnight delivery:
20
(1) if to a holder of Registrable Securities initially at its address
set forth on the signature page hereof and thereafter at such other address,
notice of which is given by such holder to the Company in accordance with the
provisions of this Section 13(c); and
(2) if to the Company, initially at its address set forth on the
signature page hereof and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 13(c), with a copy to
Loeb & Loeb LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, Attention: Xxxxx X.
Xxxxxxxx, Esq.
All such notices and communications shall be deemed to have been duly given:
at the time delivered by hand, if personally delivered during regular business
hours on a business day (otherwise, on the next business day); when received if
deposited in the mail, postage prepaid, if mailed; when receipt of confirmation
of delivery occurs, if telecopied during regular business hours on a business
day (otherwise, on the next business day); and on the next business day, if
timely delivered to an air courier guaranteeing overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of each of the parties, including,
without limitation, and without the need for an express assignment, subsequent
holders of Registrable Securities.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
(h) Severability. The invalidity or unenforceability of any provision of
this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.
(i) Entire Agreement. This Agreement, including any exhibits hereto and the
documents and instruments referred to herein and therein, is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties, covenants or undertakings, other than those set forth or
referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
(j) Termination as to Stockholders. If a Stockholder ceases to hold any
Registrable Securities, such Stockholder shall cease to be a party to this
Agreement, but (i) this Agreement shall continue in full force and effect and
continue to be binding on the Company and the other Stockholders and (ii) the
rights and obligations under Sections 3, 4 and 8 of such former Stockholder,
21
each Person (if any) who controls such former Stockholder within the meaning of
the Securities Act and each of their respective affiliates, partners, directors,
officers, employees and agents of the foregoing with respect to any Demand
Registration or piggyback registration in which such former Stockholder was a
selling stockholder shall survive.
(k) Certain Mergers and Other Events. If the Company proposes to consummate
any consolidation, merger, binding share exchange or reorganization to which the
Company is a party and in which the Company is not the continuing corporation or
any sale, conveyance, transfer or lease to another entity of the properties and
assets of the Company as an entirety or substantially as an entirety and if, as
a result of or in connection with such transaction, the Stockholders would
receive or would be entitled to receive, in exchange for or otherwise with
respect to the Registrable Securities held by them, any common stock, other
capital stock or other securities of the successor or acquiring corporation or
any affiliate thereof or any Rights for any such common stock, capital stock or
other securities, then the Company shall not consummate such transaction unless
the successor or acquiring entity (as the case may be) shall, in a manner
reasonably satisfactory to the holders of a majority of the Registrable
Securities, grant to the Stockholders registration rights with respect to such
common stock, other capital stock or other securities which shall be no less
favorable to the Stockholders than the provisions of this Agreement. In the
event of (i) any reclassification, reorganization or change of the outstanding
shares of Common Stock or other capital stock of the Company, (ii) any
consolidation, merger, binding share exchange or reorganization to which the
Company is party (other than a consolidation, merger, share exchange or
reorganization in which the Company is the continuing corporation and which does
not result in any reclassification of or change in the Common Stock) or (iii)
any other event of any kind occurs which results in a change in the securities
constituting or included in the Common Stock immediately before such event, then
the Stockholders shall be entitled to registration rights with respect to such
all securities issued or issuable to them by reason thereof which are comparable
in all material respects to those provided for herein with respect to
Registrable Securities. In the event any dispute relating to this Section 13(k)
shall arise, then such dispute shall promptly thereafter be submitted for
resolution by an independent law firm of recognized national standing selected
by the Company and reasonably acceptable to the holders of a majority of the
Registrable Securities, whose decision (with the advice of an independent
investment banking firm of recognized national standing selected by such law
firm, if such law firm believes it advisable to seek such advice) shall be final
and conclusive. The fees and expenses of such law firm (and of any such
investment banking firm) shall be paid by the Company.
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.
XXXXXXXX.XXX INC.
By:__________________________________
Name:
Title:
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
23
Stockholders:
_____________________________________
Xxx X. Xxxxxx
X.X. Xxx 000
Xxx Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
_____________________________________
Xxxxx X. Xxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
_____________________________________
Xxxxxxx X. Xxxxxx
c/o Xxxxxxxx.xxx Inc.
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
CAPITAL EXPRESS, L.L.C.
By:__________________________________
Name: Xxxxx X Xxxxx
Title: Managing Member
000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
INTERNET WEB BUILDERS, LLC
By:__________________________________
Name: Xxxxxxx Xxxxxxx
Title: Managing Member
000 Xxxxxxx Xxxx Xxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
PALISADE PRIVATE PARTNERSHIP, L.P.
By:__________________________________
Name:
Title:
Xxx Xxxxxx Xxxxx
Xxxx Xxx, XX 00000
Facsimile: (000) 000-0000
STAPLES, INC.
By:__________________________________
Name:
Title:
000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
SANDLER CAPITAL IV PARTNERS, L.P.
By: Sandler Investment Partners,
L.P., a General Partner
By: Sandler Capital Management,
a General Partner
By: MJDM Corp., a General Partner
By:__________________________________
Xxxxxx Xxxxxxxxx
President
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
SANDLER CAPITAL IV FTE PARTNERS, L.P.
By: Sandler Investment Partners,
L.P., a General Partner
By: Sandler Capital Management,
a General Partner
By: MJDM Corp., a General Partner
By:__________________________________
Xxxxxx Xxxxxxxxx
President
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
SANDLER CAPITAL MANAGEMENT
By: MJDM Corp., a General Partner
By:__________________________________
Xxxxxx Xxxxxxxxx
President
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
BESSEMER VENTURE PARTNERS IV L.P.
By: Deer IV & Co. LLC,
General Partner
By:__________________________________
Xxxxxx X. Xxxxxxxx
Manager
0000 Xxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
BESSEC VENTURES IV L.P.
By: Deer IV & Co. LLC,
General Partner
By:__________________________________
Xxxxxx X. Xxxxxxxx
Manager
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
HIKARI TSUSHIN INC.
By:__________________________________
Name:
Title:
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
CONCENTRIC NETWORK CORPORATION
By:__________________________________
Name:
Title:
0000 Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
BAYVIEW INVESTORS LTD.
By:__________________________________
Name:
Title:
000 Xxxxxxxxxx Xxxxxx, 0000
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
