REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered
into as of ________ ___, 2000, by and among INTERNAP NETWORK SERVICES
CORPORATION, a Washington corporation ("Parent"), and the stockholders of
XXXX.XXX, INC., a Delaware corporation (the "Company"), identified on EXHIBIT
A hereto (the "Stockholders").
RECITALS
A. Parent, Virginia Acquisition Corp., a Delaware corporation and a
wholly owned subsidiary of Parent ("Merger Sub"), and the Company have
entered into an Agreement and Plan of Merger and Reorganization dated as of
July __, 2000 (the "Reorganization Agreement"), pursuant to which Merger Sub
will merge with and into the Company (the "Merger") and the Stockholders will
have the right to receive shares of common stock of Parent. Capitalized terms
used in this Agreement and not otherwise defined shall have the meanings
given to them in the Reorganization Agreement.
B. Parent has agreed to provide the Stockholders with certain
registration rights as more fully described herein.
C. Contemporaneously with the execution and delivery of this
Agreement, each Stockholder is executing and delivering to Parent a lock-up
agreement (a "Lock-Up Agreement") of even date herewith, under which such
Stockholder agrees not to dispose of more than 50% of its Registerable Shares
(defined below) or warrants or other rights to purchase Registerable Shares
except pursuant to the terms of the Lock-Up Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
SECTION 1. GENERAL
1.1 DEFINITIONS. As used in this Agreement the following
terms shall have the following respective meanings:
"EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.
"FORM S-3" means such form under the Securities Act as in
effect on the date hereof or any successor registration form under the
Securities Act subsequently adopted by the SEC that permits inclusion or
incorporation of substantial information by reference to other documents
filed by the Company with the SEC.
1.
"REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.
"REGISTERABLE SHARES" means the shares of Parent Common Stock
issued to the Stockholders pursuant to the Reorganization Agreement or upon
exercise of Company Warrants assumed by Parent pursuant to the Reorganization
Agreement and any shares of Parent Common Stock issued in respect thereof as
a result of any stock split, stock dividend, share exchange, merger,
consolidation or similar recapitalization; PROVIDED, HOWEVER, that
Registerable Shares shall cease to be Registerable Shares when (i) a
registration statement covering all such Registerable Shares shall have
become effective under the Securities Act, and such Registerable Shares shall
have been disposed of in accordance with the Registration Statement, or (ii)
all such Registerable Shares may be transferred pursuant to Rule 144 under
the Securities Act, as such rule may be amended from time to time, or any
successor rule or regulation ("Rule 144") in any single calendar quarter and
PROVIDED FURTHER, that Registerable Shares shall not include any shares of
Parent Common Stock delivered into the "Escrow Account" pursuant to the
Escrow Agreement dated of even date herewith among certain of the
Stockholders, Parent, the Stockholders' Agent (as defined therein) and State
Street Bank and Trust Company of California, N.A., as escrow agent and (ii)
any shares issued upon exercise of any options assumed pursuant to the
Reorganization Agreement. The Stockholders desiring to sell shares pursuant
to Rule 144 shall provide such Rule 144 representation letters in usual and
customary form as may reasonably be requested by Parent's counsel to provide
such opinion.
"REGISTRATION EXPENSES" shall mean all expenses incurred by
Parent in complying with Sections 2.1 and 2.3 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for Parent, reasonable fees and disbursements not to
exceed $15,000 of a single special counsel for the Stockholders, blue sky
fees and expenses and the expense of any special audits incident to or
required by any such registration (but excluding the compensation of regular
employees of Parent which shall be paid in any event by Parent).
"SEC" or "COMMISSION" means the Securities and Exchange
Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER
2.1 REGISTRATION. No later than October 4, 2000, Parent
shall prepare and file with the SEC a Form S-3 registration statement (or, if
Form S-3 is not then available to Parent, a registration statement on such
other form as is then available to Parent for the registration for resale of
the Registerable Shares) (the "Registration Statement"), covering the resale
of the Registerable Shares. Parent shall use its commercially reasonable
efforts to cause the Registration Statement to be declared effective as soon
as practicable after the filing. Subject to the terms of this Agreement,
Parent shall use commercially reasonable efforts to cause the Registration
Statement to remain effective until the earlier of (i) the date on which all
Registerable Shares covered by the Registration Statement have been sold to
the public pursuant
2.
to the Registration Statement or (ii) one year after the Closing Date (the
"Registration Effective Period").
2.2 EXPENSES OF REGISTRATION. Except as specifically
provided herein, all Registration Expenses incurred in connection with any
registration, qualification or compliance pursuant to Section 2.1 herein
shall be borne by Parent.
2.3 OBLIGATIONS OF PARENT. Whenever required to effect the
registration of the Registerable Shares pursuant to Section 2.1, Parent
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Securities Act with respect to the disposition of
all securities covered by such registration statement for the Registration
Effective Period.
(b) Furnish to the Stockholders such number of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registerable
Shares owned by them.
(c) Use all reasonable efforts to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Stockholders; PROVIDED that Parent shall not be required in
connection therewith or as a condition thereto to qualify to do business or
to file a general consent to service of process in any such states or
jurisdictions.
(d) Notify each Stockholder covered by 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 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. Thereafter, Parent shall use commercially
reasonable efforts to prepare and file with the SEC and furnish to each
Stockholder as promptly as practicable a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such Registerable Shares, 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 the light of the circumstances then
existing.
(e) Use its best efforts to furnish, on the date that
such Registerable Shares are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (i) an opinion, dated as of
such date, of the counsel representing Parent for the purposes of such
registration, in form and substance as is customarily given to underwriters
in an underwritten public offering, addressed to the underwriters, if any,
and (ii) a letter dated as of such date, from the independent certified
public accountants of Parent, in form and substance as
3.
is customarily given by independent certified public accountants to
underwriters in an underwritten public offering addressed to the underwriters.
2.4 DELAY OF REGISTRATION; FURNISHING INFORMATION.
(a) No Stockholder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 2.
(b) It shall be a condition precedent to the
obligations of Parent to take any action pursuant to Section 2.1 that the
Stockholders shall furnish to Parent such information regarding themselves,
the Registerable Shares held by them and the intended method of disposition
of such securities as shall reasonably be required to effect the registration
of their Registerable Shares.
2.5 INDEMNIFICATION. In the event any Registerable Shares
are included in a registration statement under Section 2.1:
(a) To the extent permitted by law, Parent will
indemnify and hold harmless each Stockholder, the partners, officers and
directors of each Stockholder, any underwriter (as defined in the Securities
Act) for such Stockholder and each person, if any, who controls such
Stockholder or underwriter within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages or liabilities (joint or
several) to which they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation") by Parent: (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) 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 (iii) any violation or
alleged violation by Parent of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law in connection
with the offering covered by such registration statement; and Parent will pay
as incurred to each such Stockholder, partner, officer, director, underwriter
or 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 indemnity agreement
contained in this Section 2.5(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of Parent, which consent shall not
be unreasonably withheld, nor shall Parent be liable in any such case for any
such loss, claim, damage, liability or action to the extent that it arises
out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Stockholder, partner, officer, director,
underwriter or controlling person of such Stockholder.
4.
(b) To the extent permitted by law, each Stockholder
will indemnify and hold harmless Parent, each of its directors, its officers
and each person, if any, who controls Parent within the meaning of the
Securities Act, any underwriter and any other Stockholder selling securities
under such registration statement or any of such other Stockholder's
partners, directors or officers or any person who controls such Stockholder,
against any losses, claims, damages or liabilities (joint or several) to
which they may become subject under the Securities Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Stockholder under an instrument duly executed by such
Stockholder and stated to be specifically for use in connection with such
registration; and each such Stockholder will pay as incurred any legal or
other expenses reasonably incurred by Parent or any such director, officer,
controlling person, underwriter or other Stockholder, or partner, officer,
director or controlling person of such other Stockholder in connection with
investigating or defending any such loss, claim, damage, liability or action
if it is judicially determined in a final, non-appealable decision that there
was such a Violation; PROVIDED, HOWEVER, that the indemnity agreement
contained in this Section 2.5(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Stockholder, which consent
shall not be unreasonably withheld; PROVIDED FURTHER, that in no event shall
any indemnity under this Section 2.5 exceed the net proceeds from the
offering received by such Stockholder.
(c) Promptly after receipt by an indemnified party
under this Section 2.5 of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 2.5,
deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to both the indemnifying party and the
indemnified party; PROVIDED, HOWEVER, that an indemnified party shall have
the right to retain its own counsel, with the fees and expenses to be paid by
the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding. The failure
to deliver written notice to the indemnifying party within a reasonable time
of the commencement of any such action, if materially prejudicial to its
ability to defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 2.5, but the omission
so to deliver written notice to the indemnifying party will not relieve it of
any liability that it may have to any indemnified party otherwise than under
this Section 2.5.
(d) If the indemnification provided for in this Section
2.5 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any losses, claims, damages or liabilities
referred to herein, the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall to the extent permitted by applicable law
5.
contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
Violation(s) that resulted in such loss, claim, damage or liability, as well
as any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by a
court of law by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
PROVIDED, that in no event shall any contribution by a Stockholder hereunder
exceed the net proceeds from the offering received by such Stockholder.
(e) The obligations of Parent and Stockholders under
this Section 2.5 shall survive completion of any offering of Registerable
Shares in a registration statement and the termination of this agreement. 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 to such claim or
litigation.
2.6 RULE 144 REPORTING. With a view to making available to
the Stockholders the benefits of certain rules and regulations of the SEC
which may permit the sale of the Registerable Shares to the public without
registration, Parent agrees to:
(a) Make and keep public information available, as
those terms are understood and defined in Rule 144 or any similar or
analogous rule promulgated under the Securities Act, at all times after the
effective date of the first registration filed by Parent for an offering of
its securities to the general public;
(b) File with the SEC, in a timely manner, all reports
and other documents required of Parent under the Exchange Act; and
(c) So long as a Stockholder owns any Registerable
Shares, furnish to such Stockholder forthwith upon request: a written
statement by Parent as to its compliance with the reporting requirements of
said Rule 144 of the Securities Act and of the Exchange Act (at any time
after it has become subject to such reporting requirements); a copy of the
most recent annual or quarterly report of Parent; and such other reports and
documents as a Stockholder may reasonably request in availing itself of any
rule or regulation of the SEC allowing it to sell any such securities without
registration.
2.7 CESSATION OF OFFERING. Upon receipt of any notice from
Parent of the happening of any event of the kind described in Section 2.3(d),
the disposition of the Registerable Shares pursuant to the Registration
Statement covering such shares shall be immediately discontinued until the
Stockholders receive copies of the supplemented or amended prospectus
contemplated by Section 2.3(d), and, if so directed by Parent, the
Stockholders shall
6.
deliver to Parent all copies of the prospectus covering such Registerable
Shares in such Stockholder's possession at the time of receipt of such notice.
SECTION 3. MISCELLANEOUS
3.1 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of Delaware as applied to agreements
among Delaware residents entered into and to be performed entirely within
Delaware.
3.2 SURVIVAL. The representations, warranties, covenants,
and agreements made herein shall survive any investigation made by any
Stockholder and the closing of the transactions contemplated hereby. All
statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of Parent pursuant hereto in connection
with the transactions contemplated hereby shall be deemed to be
representations and warranties by Parent hereunder solely as of the date of
such certificate or instrument.
3.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors, and administrators
of the parties hereto and shall inure to the benefit of and be enforceable by
each person who shall be a holder of Registerable Shares from time to time;
PROVIDED, HOWEVER, that prior to the receipt by Parent of adequate written
notice of the transfer of any Registerable Shares specifying the full name
and address of the transferee, Parent may deem and treat the person listed as
the holder of such shares in its records as the absolute owner and holder of
such shares for all purposes, including the payment of dividends or any
redemption price.
3.4 ENTIRE AGREEMENT. This Agreement, the Exhibits and
Schedules hereto, the Reorganization Agreement, the Lock-Up Agreement and the
other documents delivered pursuant thereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and no party shall be liable or bound to any other in any manner by
any representations, warranties, covenants and agreements except as
specifically set forth herein and therein.
3.5 SEVERABILITY. In case any provision of the Agreement
shall be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
3.6 AMENDMENT AND WAIVER.
(a) Any provision of this Agreement may be amended and
the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of Parent and the Stockholders owning of record at least 51% of the
Registerable Shares then outstanding. Any amendment or waiver effected in
accordance with this Section 3.6 shall be binding upon each Stockholder and
Parent; PROVIDED, HOWEVER, that no such amendment or waiver shall
disproportionately affect a
7.
Stockholder adversely without such Stockholder's consent. By acceptance of
any benefits under this Agreement, the Stockholders hereby agree to be bound
by the provisions hereunder.
(b) Except as otherwise expressly provided, the
obligations of Parent and the rights of the Stockholders under this Agreement
may be waived only with the written consent of the holders of at least a
majority of the Registerable Shares.
3.7 NOTICES. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (a) upon personal
delivery to the party to be notified, (b) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient; if not, then
on the next business day, (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or
(d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent to the party to be notified at the address as
set forth on the signature pages hereof or EXHIBIT A hereto or at such other
address as such party may designate by ten (10) days advance written notice
to the other parties hereto.
3.8 ATTORNEYS' FEES. In the event that any dispute among
the parties to this Agreement should result in litigation, the prevailing
party in such dispute shall be entitled to recover from the losing party all
fees, costs and expenses of enforcing any right of such prevailing party
under or with respect to this Agreement, including without limitation, such
reasonable fees and expenses of attorneys and accountants, which shall
include, without limitation, all fees, costs and expenses of appeals.
3.9 TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
3.10 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
8.
This Registration Rights Agreement has been executed and delivered as
of the date first stated above.
INTERNAP NETWORK SERVICES CORPORATION
By:
-----------------------------------------
Printed Name:
-------------------------------
Title:
--------------------------------------
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT
STOCKHOLDER:
By:
-----------------------------------------
Printed Name:
-------------------------------
Title:
--------------------------------------
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT
EXHIBIT A
STOCKHOLDERS
EXHIBIT A
TABLE OF CONTENTS
PAGE
SECTION 1. GENERAL..................................................................1
1.1 Definitions.......................................................1
SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER...................................2
2.1 Registration......................................................2
2.2 Expenses of Registration..........................................3
2.3 Obligations of Parent.............................................3
2.4 Delay of Registration; Furnishing Information.....................4
2.5 Indemnification...................................................4
2.6 Rule 144 Reporting................................................6
2.7 Cessation of Offering.............................................6
SECTION 3. MISCELLANEOUS............................................................7
3.1 Governing Law.....................................................7
3.2 Survival..........................................................7
3.3 Successors and Assigns............................................7
3.4 Entire Agreement..................................................7
3.5 Severability......................................................7
3.6 Amendment and Waiver..............................................7
3.7 Notices...........................................................8
3.8 Attorneys' Fees...................................................8
3.9 Titles and Subtitles..............................................8
3.10 Counterparts......................................................8
i
An extra section break has been inserted above this paragraph. Do not delete
this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.
EXHIBIT A
