EXHIBIT 10.10
SECOND AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
May 12, 1999
To each of the several Purchasers named in
Schedule 1.01A to each of the Series A
Convertible Preferred Stock Purchase
Agreement dated June 10, 1998 (the "Series A
Purchasers"), the Series B-1 Convertible
Preferred Stock Purchase Agreement, dated as
of December 21, 1998 (the "Series B-1
Purchasers"), the Series C Convertible
Preferred Stock Purchase Agreement of even
date herewith (the "Series C Purchasers")
and to each of Comdisco, Inc. ("Comdisco")
and BT Alex. Xxxxx Incorporated ("BT Alex.
Xxxxx") (the Series A Purchasers, the Series
B-1 Purchasers, the Series C Purchasers,
Comdisco and BT Alex. Xxxxx are sometimes
collectively referred to herein as the
"Senior Rights Holders") and Xxxx Love and
Xxxxxxx Xxxxxx (collectively, the "Junior
Rights Holders;" together with the Senior
Rights Holders, the "Rights Holders")
Dear Sirs:
This will confirm that, in consideration of (i) the Series C Purchasers'
agreement on the date hereof to purchase an aggregate of up to 18,958,178 shares
of Series C Convertible Preferred Stock, $.01 par value per share (the "Series C
Preferred Stock") of XxxxxxXxxxxx.xxx, Inc., a Delaware corporation (the
"Company"), pursuant to the Series C Convertible Preferred Stock Purchase
Agreement of even date herewith (the "Series C Purchase Agreement") between the
Company and the Series C Purchasers, (ii) the purchase by the Series A
Purchasers of 23,316,097 shares of Series A Convertible Preferred Stock, $.01
par value per share (the "Series A Preferred Stock") of the Company pursuant to
the Series A Convertible Preferred Stock Purchase Agreement dated as of June 10,
1998, as amended (the "Series A Purchase Agreement") between the Company and the
Series A Purchasers, (iii) the purchase by the Series B-1 Purchasers of
23,019,375 shares of Series B-1 Convertible Preferred Stock, $.01 par value per
share (the "Series B-1 Preferred Stock") of the Company pursuant to the Series
B-1 Convertible Preferred Stock Purchase Agreement dated as of December 21, 1998
(the "Series B-1 Purchase Agreement"), (iv) the transactions contemplated by the
Subordinated Loan and Security Agreement (the "Loan and Security Agreement")
dated as of December 4, 1998 between the Company and Comdisco, and the Master
Lease Agreement dated as of December 4, 1998 (the "Master Lease Agreement") by
and between the Company and Comdisco, and (v) the services provided by BT Alex.
Xxxxx in connection with the sale of the Series C Preferred Stock, and as
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an inducement to consummate the transactions contemplated by the Series C
Purchase Agreement, the Company covenants and agrees with each of you as
follows:
1. Certain Definitions. As used in this Agreement, the following terms
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shall have the following respective meanings:
"Comdisco Conversion Option" shall mean the right set forth in Section 2.4
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of the Loan and Security Agreement.
"Comdisco Warrants" shall mean (i) the Warrant dated as of December 4, 1998
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issued to Comdisco in connection with the Loan and Security Agreement and
(ii) the Warrant dated as of December 4, 1998 issued to Comdisco in
connection with the Master Lease Agreement.
"Commission" shall mean the Securities and Exchange Commission, or any
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other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Common Stock, $.01 par value, of the Company,
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as constituted as of the date of this Agreement.
"Conversion Shares" shall mean shares of Common Stock issued or issuable
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upon conversion of the Preferred Shares or upon exercise of the Warrants, and
any shares of capital stock received in respect thereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
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or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
"Preferred Shares" shall mean the shares of Preferred Stock issued (i)
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pursuant to each of the Series A Purchase Agreement, Series B-1 Purchase
Agreement, and Series C Purchase Agreement, (ii) upon exercise of the
Comdisco Warrants and (iii) upon exercise of the Comdisco Conversion Option.
"Preferred Stock" shall mean all classes and series of the Preferred Stock,
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$.01 par value, of the Company.
"Purchase Agreements" shall mean the Series A Purchase Agreement, the
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Series B-1 Purchase Agreement, and the Series C Purchase Agreement.
"Senior Rights Holders" shall mean the Series A Purchasers, the Series B-1
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Purchasers, the Series C Purchasers, BT Alex. Xxxxx and Comdisco.
"Registration Expenses" shall mean the expenses so described in Section 8.
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"Restricted Stock" shall mean (1) the Conversion Shares, excluding
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Conversion Shares which have been (a) registered under the Securities Act
pursuant to an effective registration statement filed thereunder and disposed
of in accordance with the registration statement covering them or (b)
publicly sold pursuant to Rule 144 under the Securities Act, and (2) shares
of Common Stock held by the Junior Rights Holders, but excluding shares of
Common Stock which have been (a) registered under the Securities Act pursuant
to an effective registration statement filed thereunder and disposed of in
accordance with the registration statement covering them, or (b) publicly
sold pursuant to Rule 144 under the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
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similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 8.
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"Warrants" shall mean (i) the Common Stock Purchase Warrants dated as of
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May 1, 1998 issued to certain of the Senior Rights Holders in connection with
the Company's 1998 Bridge Financing, and (ii) the Common Stock Purchase
Warrant dated as of May 12, 1999 issued to BT Alex. Xxxxx.
2. Restrictive Legend. Each certificate representing Preferred Shares or
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Restricted Stock shall, except as otherwise provided in this Section 2 or in
Section 3, 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 compliance with applicable
state securities laws, or the availability of an exemption
from the registration provisions of the Securities Act of
1933."
A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Company, which may be counsel to the Company (it being
agreed that Xxxx and Xxxx LLP or Xxxxx, Day, Xxxxxx & Xxxxx or other counsel
experienced in securities laws matters shall be satisfactory) the securities
being sold thereby may be publicly sold without registration under the
Securities Act.
3. Notice of Proposed Transfer. Prior to any proposed transfer of any
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Preferred Shares or Restricted Stock (other than under the circumstances
described in Sections 4, 5 or 6), 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
(it being understood that if such transfer is intended to be in accordance with
the provisions of Rule 144, the Company shall generally not require an opinion
of counsel), shall be
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accompanied by an opinion of counsel satisfactory to the Company (it being
agreed that Xxxx and Xxxx LLP or Xxxxx, Day, Xxxxxx & Xxxxx or other counsel
experienced in securities laws matters shall be satisfactory) 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, subject to the provisions of a
certain Second Amended and Restated Stockholders Agreement of even date
herewith. Each certificate for Preferred Shares and/or Restricted Stock
transferred as above provided shall bear the legend set forth in Section 2,
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 3 shall not
apply to securities which are not required to bear the legend prescribed by
Section 2 in accordance with the provisions of that Section. If the Company does
not accept an opinion of counsel required hereby signed by the original holder's
general counsel, the Company will pay the reasonable fees and disbursements of
other counsel in connection with all opinions rendered by them pursuant to this
Section 3.
4. Required Registration.
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(a) At any time after the earlier of (i) three months after any
registration statement covering the initial public offering of securities of the
Company under the Securities Act shall have become effective, and (ii) May 15,
2001, Senior Rights Holders holding at least 60% of the total shares of
Restricted Stock then held by Senior Rights Holders (in their capacity as such)
may request the Company to register for sale under the Securities Act all or any
portion of the shares of Restricted Stock held by such requesting holder or
holders for sale in the manner specified in such notice, if the reasonably
anticipated aggregate price to the public of such sale would exceed $5,000,000.
Notwithstanding anything to the contrary contained herein, no request may be
made under this Section 4 within 120 days after the effective date of a
registration statement filed by the Company covering a firm commitment
underwritten public offering in which the holders of Restricted Stock shall have
been entitled to join pursuant to Sections 5 or 6.
(b) Following receipt of any notice under this Section 4, the Company
shall immediately notify all holders of Restricted Stock from whom notice has
not been received and such holders shall then be entitled within 20 days after
receipt of such notice from the Company to request the Company to include in the
requested registration all or any portion of their shares of Restricted Stock.
The Company shall use its best efforts to register under the Securities Act, for
public sale in accordance with the method of disposition specified in the notice
from requesting Senior Rights Holders described in paragraph (a) above, the
number of shares of Restricted Stock specified in such notice (and in all
notices received by the Company from other holders within 20 days after the
receipt of such notice by such holders). If such method of disposition shall be
an underwritten public offering, the Senior Rights Holders holding sixty percent
(60%) of the shares of Restricted Stock requested to be sold in such offering
may designate the managing underwriter of such offering, subject to the approval
of the Company,
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which approval shall not be unreasonably withheld or delayed. The Company shall
be obligated to register Restricted Stock pursuant to this Section 4 on two (2)
occasions only, provided, however, that such obligation shall be deemed
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satisfied only (i) if the method of disposition is not a firm commitment
underwriting, when a registration statement covering all shares of Restricted
Stock specified in the original notices received pursuant to subsection (a)
above, for sale in accordance with the method of disposition specified by the
requesting holders, shall have become effective or (ii) if such method of
disposition is a firm commitment underwritten public offering, when at least 75%
of the shares originally requested to be included by the Senior Rights Holders
shall have been sold pursuant thereto.
(c) The Company shall be entitled to include in any registration
statement referred to in this Section 4, for sale in accordance with the method
of disposition specified by the requesting holders, shares of Common Stock to be
sold by the Company for its own account, except as and to the extent that, in
the opinion of the managing underwriter (if such method of disposition shall be
an underwritten public offering), such inclusion would adversely affect the
marketing of the Restricted Stock to be sold. Except for registration statements
on Form X-0, X-0 or any successor thereto, the Company will not file with the
Commission any other registration statement with respect to its Common Stock,
whether for its own account or that of other stockholders, from the date of
receipt of a notice from requesting holders pursuant to this Section 4 until the
completion of the period of distribution of the registration contemplated
thereby or 120 days after the effective date of such registration, whichever is
later.
(d) If in the opinion of the managing underwriter the inclusion of
all of the Restricted Stock requested to be registered under this Section would
adversely affect the marketing of such shares, after any shares to be sold by
the Company and held by Junior Rights Holders have been excluded, shares to be
sold by the Senior Rights Holders (in their capacity as such) shall be excluded
in such manner that the shares to be sold shall be allocated among the selling
holders pro rata based on their ownership of Restricted Stock.
(e) If the Company shall furnish to the holders of Restricted Stock a
certificate that in the good faith judgment of the Board of Directors it would
be seriously detrimental to the Company or its stockholders for a registration
statement to be filed in the near future, then the Company's obligation to use
its best efforts to file a registration statement pursuant to this Section 4
shall be deferred for a period not to exceed 90 days; provided, however, that
the Company shall not obtain such a deferral more than once in any 12 month
period.
5. Incidental Registration. If the Company at any time (other than
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pursuant to Section 4 or Section 6) proposes to register any of its securities
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Forms X-0, X-0 or another form not available for
registering the Restricted Stock for sale to the public), each such time it will
give written notice to all holders of outstanding Restricted Stock of its
intention so to do. Upon the written request of any such holder, received by
the Company within 30 days after the giving of any such notice by the Company,
to register any of its Restricted Stock, the Company will use its best
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efforts to cause the Restricted Stock as to which registration shall have been
so requested to be included in the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent requisite to
permit the sale or other disposition by the holder (in accordance with its
written request) of such Restricted Stock so registered. In the event that any
registration pursuant to this Section 5 shall be, in whole or in part, an
underwritten public offering of Common Stock, the number of shares of Restricted
Stock to be included in such an underwriting may be reduced (up to 100% in the
case of an initial public offering and, to the extent such shares are requested
for inclusion, to not less than 30% of the total offering in the case of a
subsequent public offering) if and to the extent that the managing underwriter
shall be of the opinion that such inclusion would adversely affect the marketing
of the securities to be sold by the Company therein; provided, however, that
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such reduction shall be applied first to the Restricted Stock requested to be
included by the Junior Rights Holders (but in no event shall the number of
shares of Restricted Stock of the Junior Rights Holders be less than the lesser
of (i) 50% of the number of shares of Restricted Stock included in such an
underwriting, or (ii) all shares of Restricted Stock requested by the Junior
Rights Holders to be included in such registration statement), and then to the
Restricted Stock requested to be included by the Senior Rights Holders, in such
manner that the shares to be sold shall be allocated among the selling Senior
Rights Holders pro rata based on their ownership of Restricted Stock, and
provided further that such number of shares of Restricted Stock shall not be
reduced if any shares are to be included in such underwriting for the account of
any person other than the Company, the Junior Rights Holders or requesting
Senior Rights Holders holding Restricted Stock. Notwithstanding the foregoing
provisions, the Company may withdraw any registration statement referred to in
this Section 5 without thereby incurring any liability to the holders of
Restricted Stock.
6. Registration on Form S-3. Subject to a limit of one registration
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hereunder in any 12 month period, if at any time (i) any holder or holders of
Restricted Stock then outstanding request that the Company file a registration
statement on Form S-3 or any successor thereto for a public offering of all or
any portion of the shares of Restricted Stock held by such requesting holder or
holders, the reasonably anticipated aggregate price to the public of which would
exceed $1,000,000, and (ii) the Company is a registrant entitled to use Form S-3
or any successor thereto to register such shares, then the Company shall use its
best efforts to register under the Securities Act on Form S-3 or any successor
thereto, for public sale in accordance with the method of disposition specified
in such notice, the number of shares of Restricted Stock specified in such
notice. Whenever the Company is required by this Section 6 to use its best
efforts to effect the registration of Restricted Stock, each of the procedures
and requirements of Section 4, including but not limited to the requirement that
the Company notify all holders of Restricted Stock from whom notice has not been
received and provide them with the opportunity to participate in the offering;
provided, however that holders shall have no more than ten (10) days to reply to
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the Company's notice in order to participate in the offering), shall apply to
such registration, provided, however, that except as provided above there shall
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be no limitation on the number of registrations on Form S-3 which may be
requested and obtained under this Section 6, and provided, further, however,
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that the requirements contained in the first sentence of Section 4(a) shall not
apply to any registration on Form S-3 which may be requested and obtained under
this Section 6. Notwithstanding the foregoing, the Company's obligation to file
a registration statement pursuant to this Section 6 shall be deferred if: (a)
the Company shall furnish to the
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requesting holders of Restricted Stock a certificate that the Company has a bona
fide intention to file a registration statement within 45 days; (b) 90 days have
not elapsed after the effective date of a registration statement filed by the
Company; or (c) the Company shall furnish to the requesting holders of
Restricted Stock a certificate that in the good faith judgment of the Board of
Directors it would be seriously detrimental to the Company or its stockholders
for a registration statement to be filed in the near future; provided, however,
that the deferral provided for in subsection (c) above shall be for a period no
greater than 90 days, and may not be requested more than once in any 12 month
period.
7. Registration Procedures. If and whenever the Company is required by
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the provisions of Sections 4, 5 or 6 to use its best efforts to effect the
registration of any shares of Restricted Stock under the Securities Act, the
Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
(which, in the case of an underwritten public offering pursuant to Section 4,
shall be on Form S-1 or other form of general applicability satisfactory to the
managing underwriter selected as therein provided) with respect to such
securities and use its best efforts to cause such registration statement to
become and remain effective for the period of the distribution contemplated
thereby (determined as provided in the third-to-last paragraph of this Section
7);
(b) 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 keep such registration statement effective for
the period specified in paragraph (a) above and comply with the provisions of
the Securities Act with respect to the disposition of all Restricted Stock
covered by such registration statement in accordance with the sellers' intended
method of disposition set forth in such registration statement for such period;
(c) furnish to each seller of Restricted Stock and to each
underwriter such number of copies of the registration statement and each such
amendment and supplement thereto (in each case including all exhibits) and the
prospectus included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale or other
disposition of the Restricted Stock covered by such registration statement;
(d) use its best efforts to register or qualify the Restricted Stock
covered by such registration statement under the securities or "blue sky" laws
of such jurisdictions as the sellers of Restricted Stock or, in the case of an
underwritten public offering, the managing underwriter reasonably shall request,
provided, however, that the Company shall not for any such purpose be required
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to qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service of
process in any such jurisdiction;
(e) use its best efforts to list the Restricted Stock covered by such
registration statement with any securities exchange on which the Common Stock of
the Company is then listed;
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(f) immediately notify each seller of Restricted Stock and each
underwriter under such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the prospectus contained 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 light of the circumstances then existing, and promptly prepare
and furnish to such seller a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to the purchasers of
such Restricted Stock, such prospectus shall not include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing;
(g) if the offering is underwritten and at the request of any seller
of Restricted Stock, use its best efforts to furnish on the date that Restricted
Stock is delivered to the underwriters for sale pursuant to such registration:
(i) an opinion dated such date of counsel representing the Company for the
purposes of such registration, addressed to the underwriters and to such seller,
to such effects as reasonably may be requested by counsel for the underwriters
or by such seller or its counsel, and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters reasonably may request;
(h) make available for inspection by each seller of Restricted Stock,
any underwriter participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by such seller
or underwriter, reasonable access to all financial and other records, pertinent
corporate documents and properties of the Company, as such parties may
reasonably request, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration statement;
(i) cooperate with the selling holders of Restricted Stock and the
managing underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing Restricted Stock to be sold, such certificates to
be in such denominations and registered in such names as such holders or the
managing underwriters may request at least two business days prior to any sale
of Restricted Stock; and
(j) permit any holder of Restricted Stock which holder might
reasonably be deemed to be a controlling person of the Company, to participate
in good faith in the preparation of such registration or comparable statement.
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For purposes of Section 7(a) and 7(b) and of Section 4(c), the period
of distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, but in any event not later than
60 days after effectiveness of the registration statement, and the period of
distribution of Restricted Stock in any other registration shall be deemed to
extend until the earlier of the sale of all Restricted Stock covered thereby and
120 days after the effective date thereof (which such period shall be tolled
during the period of any suspension pursuant to Section 13(h) herein).
In connection with each registration hereunder, the sellers of
Restricted Stock will furnish to the Company in writing such information
requested by the Company with respect to themselves and the proposed
distribution by them as reasonably shall be necessary in order to assure
compliance with federal and applicable state securities laws; and such sellers
shall provide the Company with appropriate representations with respect to the
accuracy of such information.
In connection with each registration pursuant to Sections 4, 5 or 6
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.
8. Expenses. All expenses incurred by the Company in complying with
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Sections 4, 5 and 6, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Company, fees and expenses (including counsel fees)
incurred in connection with complying with state securities or "blue sky" laws,
fees of the National Association of Securities Dealers, Inc., transfer taxes,
fees of transfer agents and registrars, costs of any insurance which might be
obtained and the reasonable fees and disbursements, not to exceed $25,000, of
one counsel selected by a majority in interest of the sellers of Restricted
Stock, but excluding any Selling Expenses, are called "Registration Expenses".
All underwriting discounts and selling commissions applicable to the sale of
Restricted Stock are called "Selling Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement under Sections 4, 5 or 6. All Selling Expenses in
connection with each registration statement under Sections 4, 5 or 6 shall be
borne by the participating sellers in proportion to the number of shares sold by
each, or by such participating sellers other than the Company (except to the
extent the Company shall be a seller) as they may agree.
9. Indemnification.
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(a) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Sections 4, 5 or 6, the Company will
indemnify and hold harmless each holder of Restricted Stock, its officers and
directors, each underwriter of such Restricted Stock 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
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several, to which such holder, officer, director, 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 (i) any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
Restricted Stock was registered under the Securities Act pursuant to Sections 4,
5 or 6, any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, (ii) any blue sky application or other document
executed by the Company specifically for that purpose or based upon written
information furnished by the Company filed in any state or other jurisdiction in
order to qualify any or all of the Restricted Stock under the securities laws
thereof (any such application, document or information herein called a "Blue Sky
Application"), (iii) the omission or alleged omission to state in any such
registration statement, prospectus, amendment or supplement or in any Blue Sky
Applications executed or filed by the Company, a material fact required to be
stated therein or necessary to make the statements therein not misleading, (iv)
any violation by the Company or its agents of any rule or regulation promulgated
under the Securities Act applicable to the Company or its agents and relating to
action or inaction required of the Company in connection with such registration,
or (v) any failure to register or qualify the Restricted Stock in any state
where the Company or its agents has affirmatively undertaken or agreed in
writing that the Company (the undertaking of any underwriter chosen by the
Company being attributed to the Company) will undertake such registration or
qualification (provided that in such instance the Company shall not be so liable
if it has used its best efforts to so register or qualify the Restricted Stock)
and will reimburse each such seller, and such officer and director, each such
underwriter and each such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action, provided, however, that the
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Company will not be liable in any such case if and to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by any such holder, any such underwriter
or any such controlling person in writing specifically for use in such
registration statement or prospectus.
(b) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Sections 4, 5 or 6, each seller of such
Restricted Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each other seller of
Restricted Stock, each underwriter and each person who controls any underwriter
within the meaning of the Securities Act, against all losses, claims, damages or
liabilities, joint or several, to which the Company or such officer, director,
other seller, 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 or alleged untrue statement of any material fact contained in
the registration statement under which such Restricted Stock was registered
under the Securities Act pursuant to Sections 4, 5 or 6, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereof, or any Blue Sky Application 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
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necessary to make the statements therein not misleading, and will reimburse the
Company and each such officer, director, other seller, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action, provided, however, that such seller will be liable
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hereunder in any such case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such, furnished
in writing to the Company by such seller specifically for use in such
registration statement or prospectus, and provided, further, however, that the
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liability of each seller hereunder shall not in any event exceed the proceeds
received by such seller from the sale of Restricted Stock covered by such
registration statement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may have
to such indemnified party other than under this Section 9 and shall only relieve
it from any liability which it may have to such indemnified party under this
Section 9 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 9 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected, provided,
--------
however, that, if the defendants in any such action include both the indemnified
-------
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, the indemnified party shall have the
right to select a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the indemnifying party as incurred.
(d) The indemnities provided in this Section 9 shall survive the
transfer of any Restricted Stock by such holder.
10. Changes in Common Stock or Preferred Stock. If, and as often as,
------------------------------------------
there is any change in the Common Stock or 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 deemed to be made in the provisions hereof so
that the rights and privileges granted hereby shall continue with respect to the
Common Stock or Preferred Stock as so changed.
-12-
11. Rule 144 Reporting. With a view to making available the benefits of
------------------
certain rules and regulations of the Commission which may at any time permit the
sale of the Restricted Stock to the public without registration, at all times
after 90 days after any registration statement covering a public offering of
securities of the Company under the Securities Act shall have become effective,
the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(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; and
(c) furnish to each holder of Restricted Stock forthwith upon request
a written statement by the Company as to its compliance with the reporting
requirements of such Rule 144 and of the Securities Act and the Exchange Act, a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents so filed by the Company as such holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing such holder to sell any Restricted Stock without
registration.
12. Representations and Warranties of the Company. The Company represents
---------------------------------------------
and warrants to you 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 Charter or By-laws 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.
(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, except to the extent the
indemnification or contribution provisions herein may be deemed not enforceable.
13. Miscellaneous.
-------------
(a) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto (including without
limitation transferees of any Restricted Stock), whether so expressed or not,
provided, however, that the registration rights conferred herein on the holders
--------
of Preferred Shares and Restricted Stock shall only inure to the benefit of a
transferee
-13-
if (i) there is transferred to such transferee either Preferred Shares or
Restricted Stock representing at least 100,000 shares of Common Stock (as
adjusted for stock splits, stock dividends and the like) or all of the
transferor's Preferred Shares and Restricted Stock, or (ii) such transferee is a
partner, shareholder or affiliate of a party to this Agreement; and the term
"Purchaser" herein shall be deemed to refer to any transferee of a Purchaser to
whom such benefit so inures. All Restricted Stock held or acquired by any
affiliate of any Purchaser shall be aggregated with those held or acquired by
such Purchaser for the purpose of determining the availability of or discharge
of any rights of such Purchaser under his Agreement.
(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered to the following addresses:
if to the Company or any other party hereto, at the address of such party
set forth in either of the Purchase Agreements or in a certain Second Amended
and Restated Stockholders Agreement by and among the parties hereto dated as
of the date hereof;
if to any subsequent holder of Restricted Stock, to it at such address as
may have been furnished to the Company in writing by such holder;
or, in any case, to such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Restricted Stock) or to
the holders of Restricted Stock (in the case of the Company) in accordance with
the provisions of this paragraph.
(c) This Agreement shall be construed and enforced in accordance with
and governed by the General Corporation Law of the State of Delaware as to
matters within the scope thereof and as to all matters shall be governed by and
construed in accordance with internal laws of the Commonwealth of Massachusetts.
(d) This Agreement may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company, and the
holders of greater than 75% of the outstanding shares of Restricted Stock, which
in every event must include the holders of greater than 50% of the outstanding
Conversion Shares then constituting Restricted Stock, provided, however, that
-------- -------
without the consent of holders of greater than 50% of the outstanding Conversion
Shares held by Junior Rights Holders, no amendment, modification or waiver shall
be effected which adversely affects the rights of the Junior Rights Holders in a
manner different from those of all holders of Restricted Stock.
(e) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Any person who, after the date hereof, acquires
Preferred Shares pursuant to the Series C Purchase Agreement shall become a
party to this Agreement as a "Purchaser" and a holder of "Restricted Stock" for
all purposes hereunder, are upon execution by such person and true Company of a
counterpart to this Agreement. If, for any reason, any Stockholder no longer
holds any shares of Preferred Stock or Common Stock, such Stockholder shall no
longer be
-14-
allowed to be a party hereto or in any manner entitled to the rights,
obligations or benefits hereunder.
(f) Not in limitation of the definition of the term "Restricted Stock" as
provided above, the obligations of the Company to register shares of Restricted
Stock under Sections 4, 5 or 6 shall terminate immediately with respect to any
Rights Holder who holds two percent (2%) or less of the aggregate outstanding
shares of the Company's capital stock, provided that all of the shares of
Restricted Stock held by such holder may be publicly sold within any one three-
month period pursuant to Rule 144 of the Securities Act, and, in any event, such
registration obligations shall terminate with respect to all Rights Holders on
the date four years from the completion of a public offering of the Company's
shares of Common Stock.
(g) If requested in writing by the underwriters for the initial
underwritten public offering of securities of the Company, each holder of
Restricted Stock who is a party to this Agreement shall agree not to sell,
assign, transfer, pledge, hypothecate, mortgage, encumber or otherwise dispose
of all or any of such holder's shares of Restricted Stock or any other shares of
Common Stock (other than shares of Restricted Stock or other shares of Common
Stock being registered in such offering), without the consent of such
underwriters, for a period of not more than 180 days following the effective
date of the registration statement relating to such offering and shall execute
such customary underwriters' agreement with respect thereto; provided, however,
-------- -------
that all persons selling shares of Common Stock in such offering and all
executive officers and directors of the Company shall also have agreed not to
sell publicly their Common Stock under the circumstances and pursuant to the
terms set forth in this Section 13(g).
(h) Notwithstanding the provisions of Section 7(a), 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 90 days in any 12-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.
(i) The Company shall not grant to any third party any registration rights
more favorable than, or in any way conflicting with, any of those contained
herein, so long as any of the registration rights under this Agreement remains
in effect.
(j) If any provision of this Agreement shall be held to 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 Agreement, and this
Agreement shall be carried out as if any such illegal, invalid or unenforceable
provision were not contained herein.
(k) The undersigned Senior Rights Holders and Junior Rights Holders agree
that, to the extent they were parties to a certain Amended and Restated
Registration Rights Agreement dated as of December 21, 1998 (the "Prior
Agreement"), such Prior Agreement (A) shall be of no further force and effect,
(B) shall be deemed canceled in its entirety and (C) shall be deemed amended and
restated by this Agreement, all upon the effectiveness hereof.
-15-
Please indicate your acceptance of the foregoing by signing and returning
the enclosed counterpart of this letter, whereupon this Agreement shall be a
binding agreement between the Company and you.
Very truly yours,
XXXXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Xxxxxxx Xxxxxx
President and Chief Executive Officer
AGREED TO AND ACCEPTED as of the
date first above written.
SENIOR RIGHTS HOLDERS:
COVESTCO, LLC
By: Venteura, LLC
its Manager
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Title:
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XXXXXXXXXXXX VENTURE PARTNERS IV, L.P.
By: Xxxxxxxxxxxx Management Partners IV, L.P.
its General Partner
By: /s/ Xxxxx Xxxxxx
----------------------------------
Title:
-------------------------------
BESSEMER VENTURE INVESTORS L.P.
By: Deer IV & Co. LLC
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------
Managing Member
BESSEMER VENTURE PARTNERS IV L.P.
By: Deer IV & Co. LLC
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------
Managing Member
BESSEC VENTURES IV L.P.
By: Deer IV & Co. LLC
By: /s/ Xxxxxx Xxxxxxxx
----------------------------------
Managing Member
-17-
CMG @ VENTURES II, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Title:
------------------------------
PLATINUM VENTURE PARTNERS II, L.P.
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Xxxxxxx Xxxxxx
General Partner
SHAD RUN INVESTMENTS L.P.
By: /s/ Xxxxx Xxxxxxxxxxx
---------------------------------
Title:
------------------------------
COMDISCO, INC.
By: /s/ Xxxxx Xxxx
---------------------------------
Title:
------------------------------
COMMONWEALTH CAPITAL VENTURES II L.P.
By: Commonwealth Venture Partners II L.P.
its General Partner
By: /s/ Xxx X. Xxxxxxx
----------------------------
Xxx X. Xxxxxxx
General Partner
-00-
XXXX XXXXX XXXXXXX XX, X.X.
By: Zero Stage Capital Associates VI, LLC
its General Partner
By: /s/ Xxxxxxx Xxxx
------------------------------
Xxxxxxx Xxxx
Managing Member
BANCBOSTON VENTURES, INC.
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Title:
--------------------------------
NCP-MNC, L.P.
By: North Castle XX XX, L.L.C.
its General Partner
By: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
NORTH CASTLE PARTNERS II, L.P.
By: NCP G.P., L.P.
its General Partner
By: North Castle XX XX, L.L.C.
its General Partner
By: /s/ Xxxxx Xxxxxxx
-------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
-19-
NORTH CASTLE CO-INVESTMENT FUND, L.P.
By: NCP CO-INVESTMENT FUND G.P., L.L.C.
its General Partner
By: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
XXXX XXXXXXXX XXXXXXX INVESTORS LLC
By: /s/ Xxxx Xxxxxx
----------------------------------------
Title:
-------------------------------------
BLUE CHIP CAPITAL FUND II, LIMITED PARTNERSHIP
By: Blue Chip Venture Fund Company, Ltd.
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Xxxx X. Xxxxx
Manager
/s/ Xxxxxxx Xxxxxx
--------------------------------------------
Xxxxxxx Xxxxxx
--------------------------------------------
Xxxx X. Xxxx
--------------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxx Xxxx
--------------------------------------------
Xxxxxx Xxxx
--------------------------------------------
Xxxx Xxxx
-20-
/s/ Xxxxx Xxxx
-------------------------------------
Xxxxx Xxxx
-------------------------------------
Xxxxx Xxxxxx
BT ALEX. XXXXX INCORPORATED
By: /s/ Xxxxxx X. Xxxxxx, Xx.
---------------------------------
Title:
------------------------------
-00-
XXXXXXXX XXXX NATURE, LLC
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------
Title:
-00-
XXXXXX XXXXXXXX
By: /s/ M. C. van der Sluijs-Xxxxxx
---------------------------------
Title:
-23-
JUNIOR RIGHTS HOLDERS:
/s/ Xxxx X. Love
------------------------------------------
Xxxx X. Love
/s/ Xxxxxxx Xxxxxx
------------------------------------------
Xxxxxxx Xxxxxx
