EXHIBIT 10.11
ARIS CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Agreement is made as of February 28, 1997, by and between ARIS
Corporation, a Washington corporation (the "Company") and Ian Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx (the "Holder").
RECITAL
The Company desires to provide the Holder certain registration rights and
state in this Agreement the obligations with respect to registration rights.
NOW, THEREFORE, in consideration of the premises and mutual agreements set
forth herein, the Company and the Holder agree as follows:
1. DEFINITIONS.
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As used in this Agreement, the following terms shall have the
following meanings:
(a) "Commission" shall mean the Securities and Exchange Commission, or
any other federal agency at the time administering the Securities Act.
(b) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations
thereunder, all as the same shall be in effect at the time.
(c) "Holder" shall mean any holder of outstanding Registrable
Securities or anyone who holds outstanding Registrable Securities to whom the
registration rights conferred by this Agreement have been transferred in
compliance with this Agreement.
(d) "Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement, and compliance with applicable
state securities laws of such states in which Holders notify the Company of
their intention to offer Registrable Securities.
(e) "Registrable Securities" shall mean all of the following to the
extent the same have not been sold to the public (i) any and all shares of
Common Stock of the Company originally issued by the Company to Ian Xxxxxxx
Xxxxxxxxx Xxxxxxxxxx; or (ii) stock issued in respect of stock referred to in
(i) above in any reorganization; or (iii) stock issued in respect of the stock
referred to in (i) or (ii) above as a result of a stock split, stock dividend,
recapitalization or combination. Notwithstanding the foregoing, Registrable
Securities shall not include otherwise Registrable Securities (i) sold by a
person in a transaction in which his rights under this Agreement are not
properly assigned; or (ii) (A) sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction, or (B)
sold in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions, and restrictive legends with respect thereto, if any, are
removed upon the consummation of such sale or (C) if the registration rights
associated with such securities have been terminated pursuant to Section 13 of
this Agreement.
(f) "Rule 144" shall mean Rule 144 under the Securities Act or any
successor or similar rule as may be enacted by the Commission from time to time,
but shall not include Rule 144A.
(g) "Rule 144A" shall mean Rule 144A under the Securities Act or any
successor or similar rule as may be enacted by the Commission from time to time,
but shall not include Rule 144.
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(h) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations
thereunder, all as the same shall be in effect at the time.
2. RESTRICTIONS ON TRANSFERABILITY.
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The Registrable Securities shall not be sold, assigned, transferred or
pledged except upon the conditions specified in this Agreement, which conditions
are intended to ensure compliance with the provisions of the Securities Act.
Each Holder will cause any proposed purchaser, assignee, transferee, or pledgee
of the Registrable Securities held by a Holder to agree to take and hold such
securities subject to the provisions and upon the conditions specified in this
Agreement.
3. RESTRICTIVE LEGEND.
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Each certificate representing Registrable Securities shall (unless
other permitted by the provisions of Section 4 below) be stamped or otherwise
imprinted with a legend substantially in the following form (in addition to any
legend required under applicable state securities laws or otherwise):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THESE SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENTS COVERING THE
PURCHASE OF THESE SHARES AND RIGHTS TO REGISTER THESE SHARES AND RESTRICTING
THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER
OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.
Each Holder consents to the Company making a notation on its records
and giving instructions to any transfer agent of the Registrable Securities in
order to implement the restrictions on transfer established in this Agreement.
4. NOTICE OF PROPOSED TRANSFER.
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The Holder of each certificate representing Registrable Securities, by
acceptance thereof, agrees to comply in all respects with the provisions of this
Section 4. Each such Holder agrees not to make any disposition of all or any
portion of any Registrable Securities unless and until:
(a) There is in effect a registration statement under the Securities
Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) (i) Such Holder shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and
(ii) If reasonably requested by the Company, such Holder shall
furnish the Company with an opinion of counsel, reasonably satisfactory to the
Company that such disposition shall not require registration of such shares
under the Securities Act.
(c) Notwithstanding the provisions of paragraphs (a) and (b) above, no
such registration statement or opinion of counsel shall be necessary for a
transfer by a Holder which is a limited liability company or partnership to a
member or partner of such limited liability company or partnership or a retired
member or partner of such limited liability company or partnership who retires
after the date hereof, or to the estate of any such member or partner or retired
member or partner or the transfer by gift, will, or intestate succession of any
member or partner to his spouse or siblings, lineal descendants or ancestors of
such member or partner or spouse, provided, that such transferee agrees in
writing to be subject to all of the terms hereof to the same extent as if he
were an original Holder hereunder.
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5. PIGGYBACK REGISTRATION.
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(a) If at any time or from time to time the Company shall determine to
register any of its securities, for its own account or the account of any of its
shareholders, other than a registration relating solely to employee benefit
plans, or a registration relating solely to an SEC Rule 145 transaction, a
transaction relating solely to the sale of debt or convertible debt instruments
or a registration on any form (other than Form X-0, X-0 or S-3, or their
successor forms) which does not include substantially the same information as
would be required to be included in a registration statement covering the sale
of Registrable Securities, the Company will:
(i) give to each Holder written notice thereof as soon as
practicable prior to filing the registration statement; and
(ii) include in such registration and in any underwriting
involved therein, all the Registrable Securities specified in a written request
or requests, made within ten (10) days after receipt of such written notice from
the Company, by any Holder or Holders, except as set forth in subsection (b)
below.
(b) If the registration is for a registered public offering involving
an underwriting, the Company shall so advise the Holders as a part of the
written notice given pursuant to subsection 5(a)(i). In such event, the right of
any Holder to registration pursuant to Section 5 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 5, if the managing
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the managing underwriter may limit the number of
Registrable Securities to be included in the registration and underwriting
solely to sales in connection with the exercise, if any, of the underwriter's
over-allotment. The Company shall so advise all Holders and the other Holders
distributing their securities through such underwriting pursuant to piggyback
registration rights similar to this Section 5, and the number of shares of
Registrable Securities and other securities that may be included in the
registration and underwriting shall be allocated among all Holders and other
holders in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities held by such Holders and other securities held by other
holders at the time of filing the registration statement. If any Holder
disapproves of the terms of any such underwriting, he may elect to withdraw
therefrom by written notice to the Company and the managing underwriter. If, by
the withdrawal of such Registrable Securities, a greater number of Registrable
Securities held by other Holders may be included in such registration (up to the
limit imposed by the underwriters), the Company shall offer to all Holders who
have included Registrable Securities in the registration the right to include
additional Registrable Securities. Any Registrable Securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
6. EXPENSES OF REGISTRATION.
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In addition to the fees and expenses contemplated by Section 7 hereof,
all expenses incurred in connection with registrations pursuant to Section 5
hereof, including without limitation all registration, filing and qualification
fees, printing expenses, fees and disbursements of counsel for the Company and
expenses of any special audits of the Company's financial statements incidental
to or required by such registration, shall be borne by the Company, except that
the Company shall not be required to pay underwriters' fees, discounts or
commissions relating to Registrable Securities or fees of a separate legal
counsel of a Holder.
7. REGISTRATION PROCEDURES.
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In the case of each registration effected by the Company pursuant to
this Agreement, the Company will keep each Holder participating therein advised
in writing as to the initiation of each registration and as to the completion
thereof. At its expense the Company will:
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(a) keep such registration effective for a reasonable period as
necessary to permit the Holder or Holders to complete the distribution described
in the registration statement relating thereto;
(b) promptly prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act, and to keep such registration statement effective for that period of time
specified in Section 7(a) above;
(c) furnish such number of prospectuses and other documents incident
thereto as a Holder from time to time may reasonably request;
(d) use reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a registration statement, or the lifting of any
suspension of the qualification of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practical moment;
(e) register or qualify such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as any Holder or
underwriter reasonably requires, and keep such registration or qualification
effective during the period set forth in Section 7(a) above;
(f) cause all Registrable Securities covered by such registrations to
be listed on each securities exchange, including Nasdaq, on which similar
securities issued by the Company are then listed or, if no such listing exists,
use reasonable best efforts to list all Registrable Securities on one of the New
York Stock Exchange, the American Stock Exchange or Nasdaq; and
(g) cause its accountants to issue to the underwriter, if any, or the
Holders, if there is no underwriter, comfort letters and updates thereof, in
customary form and covering matters of the type customarily covered in such
letters with respect to underwritten offerings;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably, request in order to expedite or facilitate the disposition of such
Registrable Securities (including, without limitation, effecting a stock split
or a combination of shares);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(j) notify each Holder, at any time a prospectus covered by such
registration statement is required to be delivered under the Securities Act, of
the happening of any event of which it has knowledge as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing; and
(k) take such other actions as shall be reasonably requested by any
Holder.
8. INDEMNIFICATION.
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(a) In the event of a registration of any of the Registrable
Securities under the Securities Act, the Company will indemnify and hold
harmless each Holder of such Registrable Securities thereunder, each underwriter
of such Registrable Securities thereunder and each other person, if any, who
controls such Holder or underwriter within the meaning of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
such Holder, underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement
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or alleged untrue statement of any material fact contained in any registration
statement under which such Registrable Securities were registered under the
Securities Act, any final prospectus contained therein, or any amendment or
supplement thereof, 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 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 law applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration, and
will reimburse each such Holder, each of its officers, directors and partners,
and each person controlling such Holder, each such underwriter and each person
who controls any such underwriter, for any reasonable legal and any other
expenses incurred in connection with investigating, defending or settling any
such claim, loss, damage, liability or action, provided that the Company will
not be liable in any such case to the extent that any such claim, loss, damage
or liability arises out of or is based on any untrue statement or omission based
upon information furnished to the Company by such Holder or underwriter
specifically for use therein.
(b) Each Holder will, if Registrable Securities held by or issuable to
such Holder are included in the securities as to which such registration is
being effected, indemnify and hold harmless the Company, each of its directors
and officers, each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company and each
underwriter within the meaning of the Securities Act, and each other such
Holder, each of its officers, directors and partners and each person controlling
such Holder, against all claims, losses, expenses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, partners, persons or
underwriters for any reasonable legal or any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with information furnished
to the Company by such Holder specifically for use therein.
(c) Each party entitled to indemnification under this Section 8 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claims as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense, and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations hereunder, unless such failure resulted in actual detriment to
the Indemnifying Party. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, 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 such
Indemnified Party of a release from all liability in respect of such claim or
litigation.
(d) Notwithstanding the foregoing, to the extent that the provisions
on indemnification contained in the underwriting agreements entered into among
the selling Holders, the Company and the underwriters in connection with the
underwritten public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall be controlling as to the
Registrable Securities included in the public offering.
(e) The indemnification provided by this Section 8 shall be a
continuing right to indemnification and shall survive the registration and sale
of any securities by any Person entitled to indemnification hereunder and the
expiration or termination of this Agreement.
9. INFORMATION BY HOLDER.
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The Holder or Holders of Registrable Securities included in any
registration shall promptly furnish to the Company such information regarding
such Holder or Holders and the distribution proposed by such Holder or Holders
as the Company may request in writing and as shall be required in connection
with any registration referred to herein.
10. RULE 144 AND 144A REPORTING.
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With a view to making available to Holders of Registrable Securities
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees at all times after ninety (90) days after the effective date of
the first registration filed by the Company for an offering of its securities to
the general public to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 and Rule 144A; and
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act.
For purposes of facilitating sales pursuant to Rule 144A, so long as
the Company is not subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, each Holder and any prospective purchaser of such Holder's
securities shall have the right to obtain from the Company, upon request of the
Holder prior to the time of sale, a brief statement of the nature of the
business of the Company and the products and services it offers; and the
Company's most recent balance sheet and profit and loss and retained earnings
statements, and similar financial statements for the two preceding fiscal years
(the financial statements should be audited to the extent reasonably available).
11. TRANSFER OF REGISTRATION RIGHTS. The rights to cause the Company to
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register Registrable Securities of a Holder and keep information available
granted to a Holder by the Company under Sections 5, 6 and 7 may be assigned by
a Holder to any partner or shareholder of such Holder, to any other Holder, or
to a transferee or assignee who receives at least 50,000 shares of Registrable
Securities (as adjusted for stock splits and the like); provided, that the
Company is given written notice by the Holder at the time of or within a
reasonable time after said transfer, stating the name and address of said
transferee or assignee and identifying the securities with respect to which such
registration rights are being assigned.
12. TERMINATION OF RIGHTS.
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(a) The rights of any particular Holder to cause the Company to
register securities under Sections 5 shall terminate with respect to such Holder
at such time as such Holder is able to dispose of all of his Registrable
Securities in one three-month period pursuant to the provisions of Rule 144.
(b) Notwithstanding the provisions of paragraph (a) of this Section
12, all rights of any particular Holder under this Agreement shall terminate at
5:00 p.m. Pacific Standard Time on the date five (5) years after the closing
date of the Company's initial registration.
13. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
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and warrants to the Holders as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the Articles of Incorporation or Bylaws of the Company or any
provision of any indenture, agreement or other instrument to which it or any or
its properties or assets is bound, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument or result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company.
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(b) This Agreement has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, subject to:
(i) applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance and moratorium laws and other laws of general application affecting
enforcement of creditors' rights generally and
(ii) the availability of equitable remedies as such remedies may be
limited by equitable principles of general applicability (regardless of whether
enforcement is sought in a proceeding in equity or at law).
17. MISCELLANEOUS.
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(a) Amendments. This Agreement may be amended only by a writing
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signed by the Holders of more than fifty percent (50%) of the Registrable
Securities, as constituted from time to time. The Holders hereby consent to
future amendments to this Agreement that permit future investors, including
without limitation employees, officers or directors of the Company, to be made
parties hereto and to become Holders of Registrable Securities; provided,
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however, that no such future amendment may materially impair the rights of the
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Holders hereunder without obtaining the requisite consent of the Holders, as set
forth above.
(b) Counterparts. This Agreement may be executed in any number of
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counterparts, all of which shall constitute a single instrument.
(c) Notices, Etc. All notices, requests, consents and other
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communications required or provided for herein to any party shall be deemed to
be sufficient if contained in a written instrument, and shall be deemed to be
given when: (a) delivered in person; (b) delivered by overnight receipted
courier service; or (c) sent by facsimile transmission with delivery confirmed
and followed by delivery pursuant to Subsection (b) hereof, which notice is
addressed to the party at the address set forth below, or such other address as
may hereafter be designated in writing by the party.
If to the Company: ARIS Corporation
Suite 150
0000 Xxxx Xxxx Xxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: General Counsel or President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Holder: To the address set forth on the signature
page(s) hereof.
(d) Nonpublic Information. Any other provisions of this Agreement to
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the contrary notwithstanding, the Company's obligation to file a registration
statement, or cause such registration statement to become and remain effective,
shall be suspended for a period not to exceed ninety (90) days (and for periods
not exceeding, in the aggregate, one hundred eighty (180) days in any twenty-
four (24) month period) if there exists at the time material non-public
information relating to the Company which, in the reasonable opinion of the
Company, should not be disclosed.
(e) Delay of Registration. No Holder shall have the right to take any
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action to restrain, enjoin, or otherwise delay any registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
(f) Severability. If any provision of this Agreement shall be held to
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be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
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Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
(g) Dilution. If, and as often as, there is any change in the Common
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Stock or the Preferred Stock by way of a stock split, stock dividend,
combination or reclassification, or through a merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof so that the rights and
privileges granted hereby shall continue with respect to the Common Stock or the
Preferred Stock as so changed.
(h) Governing Law. This Agreement shall be governed by and construed
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under the laws of the State of Washington without regard to principles of
conflict of law.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
COMPANY: ARIS CORPORATION,
a Washington corporation
By:/s/ Xxxx Song
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Its:
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HOLDER: /s/ Xxx Xxxxxxxxxx
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Ian Xxxxxxx Xxxxxxxxx Xxxxxxxxxx
Address: Xxxxxxxxx Xxxxxxx
00 Xxxxxxxxx
Xxxxxxxxxx, Xxxxxx
Xxxxxxx
Telephone: 000-00-0000-000-000
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