Exhibit 10.2
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eSourceOne, Inc.
(a Delaware corporation)
Series A Convertible Redeemable Preferred Stock
REGISTRATION RIGHTS AGREEMENT
Dated: August 10, 1999
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") dated as of August 10,
1999 is by and among eSourceOne, Inc., a Delaware corporation (the "Company"),
Reckson Service Industries, Inc., a Delaware corporation ("RSI"), and RSI ESO,
Inc., a Delaware corporation ("RSI ESO" or the "Series A Investor;" and together
with RSI and their successors and permitted assigns collectively the "Series A
Investors"), Xxxxxxx X. Xxxxxxxxxxx and H. Xxxxx Xxxx.
RECITALS
WHEREAS, the Company and the Series A Investors have executed and
delivered that certain Stock Purchase Agreement, dated August 10, 1999 (the
"Stock Purchase Agreement"), pursuant to which the Company has agreed to issue
and sell to the Series A Investors, and the Series A Investors have agreed to
purchase from the Company, the shares of the Company's Series A Convertible
Redeemable Preferred Stock, par value $0.01 per share (the "Series A Shares"),
specified therein;
WHEREAS, as an inducement to the Series A Investors to consummate the
purchase of the Series A Shares in accordance with the Stock Purchase Agreement,
the Company desires to grant to the Series A Investors the registration rights
set forth in this Agreement, subject to the terms and conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements herein contained, the receipt and sufficiency of which is hereby
acknowledged, and subject to the terms and conditions set forth herein, the
parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:
"Business Day" shall mean any day except Saturday, Sunday and any day
on which banks in The City of New York are required or permitted by law or
executive order to close.
"Commission" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Common Stock, $0.01 par value per share,
of the Company.
"Conversion Shares" shall mean shares of Common Stock issued upon
conversion of the Series A Shares.
"Eligible Founder" shall mean a Founder who holds Restricted Stock
following such time as sales or transfers of Series A Shares by the Series A
Investors result in the receipt of aggregate net proceeds to each Series A
Investor (measured on a cumulative basis from the date hereof) of an amount
equal to the price originally paid to the Company for the Series A Shares by
such Series A Investor (such receipt of such amount being the "Series A
Threshold"). To the extent that the aggregate net proceeds of any transaction
covered by a Registration Statement exceeds the amount required to satisfy the
Series A Threshold, each Founder shall become an Eligible Founder with respect
to such excess.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Founders" shall mean Xxxxxx X. Xxxxxxxxxxx and H. Xxxxx Xxxx.
"Founders' Shares" shall mean shares of Common Stock held, as of the
date of this Agreement, by a Founder.
"Investor Transferee" shall mean, with respect to any Series A
Investor, a transferee of Preferred Stock or Restricted Stock of such Series A
Investor if such transferee (i) has given the Company written notice at the time
of or within a reasonable time after such transfer stating the name and address
of such transferee and (ii) has executed and delivered to the Company an
instrument in the form reasonably prescribed by the Company agreeing to be bound
by the terms thereof and of this Agreement and the Stockholders' Agreement;
provided, however, that the rights of the Series A Investors under this
Agreement shall not be assignable to any competitor of the Company unless such
assignment is in connection with the sale by the Series A Investors of a
majority of the Series A Shares held by them.
"Person" shall mean an individual, corporation, partnership, joint
venture, trust university, or unincorporated organization, or a government or
any agency or political subdivision thereof.
"Preferred Stock" shall mean the Series A Shares of the Company and any
other convertible preferred stock issued by the Company from time to time.
"Prospectus" shall mean the prospectus included in a Registration
Statement at the time such Registration Statement is declared effective, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
"Qualified Initial Public Offering" shall mean a firm underwritten
public offering of Common Stock by a nationally recognized underwriter with
aggregate gross proceeds to the Company of at least $30,000,000 and reflecting a
market value of the Company of at least $150,000,000 immediately prior to such
public offering.
"register," "registered," and "registration" shall mean a registration
effected by preparing and filing one or more Registration Statements in
compliance with the Securities Act and, with respect to Section 5 hereof,
pursuant to Rule 415 under the Securities Act or any successor rule providing
for offering securities on a continuous or delayed basis and the declaration or
ordering of effectiveness of such Registration Statement(s) by the Commission.
"Registration Delay Limit" shall mean the period, not to exceed, for so
long as this Agreement is in effect, ninety (90) consecutive days, subject to an
aggregate of one-hundred twenty (120) days in any twelve (12) month period,
wherein the Company may delay or suspend a registration of Restricted Stock;
provided, however, that the combined number of days in any such period and any
Lock-up Period contemplated by Section 13 of this Agreement shall not exceed
two-hundred ten (210) days in any twelve (12) month period.
"Registration Expenses" shall mean all expenses incurred by the Company
in complying with the Registration Provisions, 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, and the
reasonable fees and disbursements of one counsel for the sellers of Restricted
Stock, but excluding any Selling Expenses.
"Registration Provisions" shall mean Sections 3, 4, and 5 of this
Agreement.
"Registration Statement" shall mean any registration statement of the
Company relating to the registration for resale of Restricted Stock that is
filed pursuant to the provisions of this Agreement and including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
"Restricted Stock" shall mean the Conversion Shares and Founders'
Shares, but excluding in each case shares of Common Stock which have been (i)
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 (ii) publicly sold pursuant to Rule 144 or Rule 701
under the Securities Act; provided, that prior to a Qualified Initial Public
Offering, the term "Restricted Stock" shall be deemed to include the number of
shares of Common Stock that would be issuable upon conversion of a Series A
Share.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any 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 all underwriting discounts and selling
commissions applicable to the sale of Restricted Stock and all fees and expenses
incurred to perform any interim audit of the financial statements of the Company
requested by the Series A Investors in connection with a registration pursuant
to Section 3 hereof that would not otherwise be required for or in connection
with the Company's periodic filings required under the Exchange Act.
"Series A Eligible Sellers" shall have the meaning attributed to such
term in Section 3(a).
"Series A Investors Demand Notice" shall have the meaning attributed to
such term in Section 3(a).
"Stockholders' Agreement" shall mean the Stockholders' Agreement, dated
the date hereof, among the Company and certain of its stockholders, as amended
to date and as the same may be amended from time to time hereafter.
2. Restrictive Legend. Each certificate representing Restricted Stock shall,
except as otherwise provided in the Registration Provisions, be stamped or
otherwise imprinted with a legend substantially in the form required under the
Stockholders' Agreement.
3. Required Registrations.
(a) Upon the expiration of the lock-up period required by an underwriter in
connection with an initial public offering by the Company of shares of its
Common Stock pursuant to the Securities Act (but in no event later than six (6)
months following such initial public offering), the holders of Restricted Stock
then owned beneficially or of record by the Series A Investors and Investor
Transferees of the Series A Investors (collectively, the "Series A Eligible
Sellers") constituting at least 20% of the total Restricted Stock held by such
Series A Eligible Sellers may request (the "Series A Investors Demand Notice")
the Company to register 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 Series A Investors Demand Notice, provided that the
reasonably anticipated aggregate price to the public of such public offering
would be at least $10,000,000.
(b) Following receipt of a Series A Investors Demand Notice, the Company
shall immediately notify the Series A Eligible Sellers from whom notice has not
been received and shall use its best efforts to register under the Securities
Act, for public sale in accordance with the method of disposition specified in
such Series A Investors Demand Notice from requesting holders, the number of
shares of Restricted Stock specified in (x) such Series A Investors Demand
Notice and (y) all notices received by the Company from other Series A Eligible
Sellers within 30 days after the giving of such notice by the Company. The
Company shall be obligated to register Restricted Stock pursuant to this Section
3 on three occasions only; provided, however, that, in each case, such
obligation shall be deemed satisfied only when a Registration Statement covering
all shares of Restricted Stock specified in notices received as aforesaid, for
sale in accordance with the method of disposition specified by the requesting
holders, shall have become effective and shall have remained continuously
effective during the period of distribution (as specified in Section 6 hereof).
Each registration of Restricted Stock pursuant to a Series A Investors Demand
Notice issued pursuant to this Section 3(b), which satisfies the requirements in
the proviso to the immediately preceding sentence, shall satisfy the Company's
obligation to register Restricted Stock on one occasion.
(c) Subject to the Registration Delay Limit, the Company shall be permitted
to delay or suspend any registration pursuant to this Section 3 if (i) an event
occurs and is continuing as a result of which the Registration Statement, any
related Prospectus or any document incorporated therein by reference as then
amended or supplemented would, in the Company's good faith judgment, contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, (ii) the Company determines in its good
faith judgment that the disclosure of an event contemplated by Section 3(c)(i)
at such time (A) would have a material adverse effect on the business,
operations or prospects of the Company or (B) otherwise relates to a material
business transaction which has not yet been publicly disclosed, or (iii) the
Company has prior to the receipt of a Series A Investors Demand Notice filed a
Registration Statement or has notified the Series A Investors of its intent to
file a Registration Statement and the transaction contemplated by such filed or
proposed Registration Statement is actively being pursued by the Company in good
faith.
(d) If the method of disposition of Restricted Stock pursuant to this
Section 3 shall be an underwritten public offering, the lead underwriter
selected for such offering shall be (i) nationally recognized or (ii) mutually
acceptable to the Company and a majority of the Series A Eligible Sellers
participating in the offering; provided, however, that any underwriting
agreement the Company enters into pursuant to such selection shall contain
commercially reasonable terms and fees. Senior management of the Company shall
use its best efforts to assist in the marketing of any shares of Restricted
Stock registered for sale in an underwritten public offering pursuant to this
Section 3 including, without limitation, participation in any roadshow.
(e) The Company shall be entitled to include in any Registration Statement
referred to in this Section 3, for sale in accordance with the method of
disposition specified by the requesting Series A Eligible Sellers (provided that
such method of disposition need not be followed by the Company if such method
would not reasonably be expected to result in an adverse impact on the offering
of the requesting Series A Eligible Sellers), shares of Common Stock to be sold
by the Company for its own account and shares of Common Stock to be sold by
other security holders with incidental registration rights triggered by the
receipt of a Series A Investors Demand Notice or filing of any Registration in
response thereto, except as and to the extent that, in the reasonable opinion of
the lead underwriter (if such method of disposition shall be an underwritten
public offering), such inclusion would materially adversely affect the marketing
of the Restricted Stock to be sold, then the number of shares that may be
included in such underwritten public offering shall be allowed: first, to the
Series A Eligible Sellers and any holders of other securities of the Company who
have the right that is equivalent to the right of the Series A Eligible Sellers
set forth in Section 3(f) of this Agreement to join in a request by the Series A
Eligible Sellers for a required registration under this Section 3 pro rata among
them; second, to the Company; and third, to the other security holders pro rata
among them. Subject to Section 3(b), 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 3 until the completion
of the period of distribution of the shares of Restricted Stock registered
thereby, which such period of distribution shall not exceed 120 days.
(f) Following receipt of a notice from any holder of registration rights
other than a Series A Eligible Seller requesting that the Company file with the
Commission a Registration Statement in respect of shares of capital stock of the
Company held by such holder, the Company shall immediately notify the Series A
Eligible Sellers. The Series A Eligible Sellers shall thereupon have the right
to join in the request for registration of shares of Restricted Stock held by
them and the terms and conditions applicable to such registration shall be the
same as those set forth in this Section 3, including, without limitation, the
allocation procedure set forth in paragraph (e) of this Section 3.
4. Incidental Registrations.
(a) If the Company 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 the Company will give
written notice to all Series A Eligible Sellers and Eligible Founders of its
intention so to do and of the proposed method of distribution of such securities
(the "Company Registration Notice"). Upon the written request of any such Series
A Eligible Seller or Eligible Founder, 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 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 and under the conditions such registration is
permitted under the Securities Act.
(b) If the Registration Statement as to which the Company gives notice under
this Section 4 is for an underwritten offering, the Company shall so advise the
Series A Eligible Sellers and Eligible Founders. In such event, the right of any
Series A Eligible Seller and Eligible Founder to be included in a registration
pursuant to this Section 4 shall be conditioned upon such Series A Eligible
Seller's and Eligible Founder's participation in such underwriting and the
inclusion of such Series A Eligible Seller's and Eligible Founder's Restricted
Stock in the underwriting to the extent provided herein. All Series A Eligible
Sellers and Eligible Founders participating in an underwritten public offering
pursuant to this Section 4 shall 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 the
Agreement, if the Company proposes to register any of its securities under the
Securities Act for its own account and the underwriter determines in good faith
that marketing factors require a limitation of the number of securities to be
underwritten, the number of shares that may be included in the underwriting
pursuant to this Section 4 shall be allocated: first, to the Company; and
second, on a pro rata basis among the Series A Eligible Sellers, the Eligible
Founders and security holders other than the Series A Eligible Sellers and
Eligible Founders with incidental registration rights substantially equivalent
to those set forth in this Section 4; provided, however, that, if such
registration is pursuant to an initial public offering of Common Stock by the
Company, the number of shares that may be included in the underwriting may be
limited solely to shares of the Company; and provided further, however, that, if
the Series A Eligible Sellers are limited, participation in such underwritten
offering shall be restricted to the Company, the Series A Eligible Sellers and
holders of Preferred Stock ranking pari passu to the Series A Preferred. If the
Company proposes to register for an underwritten offering (without the inclusion
of any securities for the account of the Company in such underwritten offering)
any of its securities under the Securities Act for the account of security
holders other than the Series A Eligible Sellers and Eligible Founders pursuant
to required registration rights, and the Series A Eligible Sellers and/or the
Eligible Founders do not elect to participate in such offering through the
exercise of the required registration right afforded to them in Section 3(f) but
do elect to participate in such offering through the exercise of the incidental
registration right afforded to them in Section 4(a) and the underwriter
determines in good faith that marketing factors require a limitation of the
number of shares to be underwritten, the number of shares that may be included
in the underwriting shall be allocated: first, on a pro rata basis among such
other security holders; and second, on a pro rata basis among any Series A
Eligible Sellers and Eligible Founders who elect to participate therein through
such exercise of their incidental registration right.
(c) Notwithstanding the foregoing provisions, the Company may withdraw any
Registration Statement referred to in this Section 4 which it initially proposed
to file to register newly issued securities for sale in its sole discretion
without thereby incurring any liability to the holders of Restricted Stock, and
the Series A Eligible Sellers holding Restricted Stock included in the offering
covered by such Registration Statement at the time of such withdrawal shall
thereupon continue to be entitled to the registration rights under this
Agreement in respect of such Restricted Stock.
5. Registrations on Form S-3. If at any time (i) Series A Eligible Sellers
holding Restricted Stock 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 5 to use its best
efforts to effect the registration of Restricted Stock, each of the procedures
and requirements of Section 3 (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) shall apply to such registration; provided, however, that the
requirement contained in Section 3(a) that the Series A Eligible Sellers holding
at least 20% of the Restricted Stock request such registration shall not apply
to any registration on Form S-3 that may be requested and obtained under this
Section 5. The Company shall be obligated to register Restricted Stock pursuant
to this Section 5 on five (5) occasions only; provided, however, that, in each
case, such obligation shall be deemed satisfied only when a Registration
Statement covering all shares of Restricted Stock shall have become effective
and shall have remained continuously effective during the period of distribution
(as specified in Section 6 hereof). Notwithstanding anything to the contrary
contained herein, the Company shall not be required to file any registration
statement pursuant to this Section 5 within 120 days of the effective date of
any registration statement filed by the Company (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). Subject to the
Registration Delay Limit, the Company shall be permitted to delay or suspend any
registration pursuant to this Section 5 if (i) an event occurs and is continuing
as a result of which the Registration Statement, any related Prospectus or any
document incorporated therein by reference as then amended or supplemented
would, in the Company's good faith judgment, contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, (ii) the Company determines in its good faith judgment
that the disclosure of an event contemplated by clause (i) hereof at such time
(A) would have a material adverse effect on the business, operations or
prospects of the Company or (B) otherwise relates to a material business
transaction which has not yet been publicly disclosed, or (iii) the Company has
prior to the receipt of a Series A Investors Demand Notice filed a Registration
Statement or has notified the Series A Investors of its intent to file a
Registration Statement and the transaction contemplated by such filed or
proposed Registration Statement is actively being pursued by the Company in good
faith.
6. Registration Procedures. If and whenever the Company is required by any
Registration Provisions (other than Section 4) to use its best efforts to effect
the registration of any shares of Restricted Stock under the Securities Act or
the Company is required to include shares of Restricted Stock in a registration
subject to Section 4, the Company will, as expeditiously as possible:
(a) use its best efforts to effect such registration to permit the sale of
the Restricted Stock being sold in accordance with the intended method or
methods of distribution thereof, and pursuant thereto prepare and file with the
Commission a Registration Statement on any appropriate form under the Securities
Act (which in the case of an underwritten public offering pursuant to Section 3,
shall be on Form S-1 or other form of general applicability satisfactory to the
underwriter selected as therein provided), which form shall be available for the
sale of the Restricted Stock in accordance with the intended method or methods
of distribution thereof for the period of the distribution contemplated hereby
(determined as hereinafter provided) and otherwise in accordance with the
provisions hereof;
(b) use its reasonable best efforts to keep such Registration Statement
continuously effective for the period of the distribution contemplated hereby
(determined as hereinafter provided). Upon the occurrence of any event that
would cause any such Registration Statement or the Prospectus contained therein
(i) to contain an untrue statement of material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (ii) not to be
effective and usable for resale of the Restricted Stock during the period
required by this Agreement, the Company shall, subject to the Registration Delay
Limit, file promptly an appropriate amendment to such Registration Statement or
a supplement to the Prospectus, as applicable, curing such defect, and, in the
case of an amendment, use its best efforts to cause such amendment to be
declared effective as soon as practicable;
(c) prepare and file with the Commission such amendments and post-effective
amendments to the applicable Registration Statement as may be necessary to keep
such Registration Statement continuously effective for the period of
distribution as contemplated hereby (determined as hereinafter provided); cause
the Prospectus to be supplemented by any required Prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 under the Securities Act, and
to comply fully with Rules 424, 430A and 462, as applicable, under the
Securities Act in a timely manner; and comply with the provisions of the
Securities Act with respect to the disposition of all Restricted Stock covered
by such Registration Statement during the applicable period in accordance with
the participating Series A Eligible Sellers' and Eligible Founders' intended
method of disposition set forth in such Registration Statement for such period;
(d) advise the participating Series A Eligible Sellers and Eligible Founders
promptly and, if requested by such Series A Eligible Sellers and Eligible
Founders, confirm such advice in writing, (i) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to any applicable Registration Statement or any post-effective amendment
thereto, when the same has become effective, (ii) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating thereto,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Securities Act or of the
suspension by any state securities commission of the qualification of the
Restricted Stock for offering or sale in any jurisdiction, or the initiation of
any proceeding for any of the preceding purposes, and (iv) of the existence of
any fact or the happening of any event that makes any statement of a material
fact made in the Registration Statement, the Prospectus, any amendment or
supplement thereto or any document incorporated by reference therein untrue, or
that requires the making of any additions to or changes in the Registration
Statement in order to make the statements therein not misleading, or that
requires the making of any additions to or changes in the Prospectus in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. If at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Restricted
Stock under state securities or Blue Sky laws, the Company shall use its best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;
(e) subject to Section 6(b) hereof, if any fact or event contemplated by
Section 6(d)(iv) hereof shall exist or have occurred, prepare a supplement or
post-effective amendment to the Registration Statement or related Prospectus or
any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Restricted Stock,
the Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
Series A Eligible Sellers and Eligible Founders agree, upon receipt of notice by
the Company of any fact or event contemplated by Section 6(d)(iv) hereof,
forthwith to cease making offers and sales of Restricted Stock pursuant to such
Registration Statement or deliveries of the Prospectus contained therein for any
purpose until the Company has prepared and furnished such amendment or
supplement to the Prospectus as may be necessary so that, as thereafter
delivered to 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 the light of the circumstances then existing;
(f) furnish to each participating Series A Eligible Seller and Eligible
Founder and to each underwriter, before filing with the Commission, copies of
any Registration Statement or any Prospectus included therein or any amendments
or supplements to any such Registration Statement or Prospectus (including all
documents incorporated by reference after the initial filing of such
Registration Statement), which sections of such documents that are applicable to
the participating Series A Eligible Seller or Eligible Founder will be subject
to the review and comment of such persons, if any (any of which comments the
Company, in its reasonable discretion, may reject), for a period of at least
five Business Days, and the Company will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus (including all such documents incorporated by reference)
to which a participating Series A Eligible Seller or Eligible Founder shall
reasonably object within five Business Days after the receipt thereof;
(g) promptly prior to the filing of any document that is to be incorporated
by reference into a Registration Statement or Prospectus, provide copies of such
document to each participating Series A Eligible Seller and Eligible Founder and
to each underwriter, make the Company's representatives available for discussion
of such document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as such participating
Series A Eligible Seller and Eligible Founder may reasonably request;
(h) make available for inspection upon reasonable notice during the
Company's regular business hours by each participating Series A Eligible Seller
and Eligible Founder, any underwriter participating in any distribution pursuant
to such Registration Statement, and any attorney, accountant or other agent
retained by such Series A Eligible Seller, Eligible Founder or underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors and employees to supply all
information reasonably requested by any such Series A Eligible Seller, Eligible
Founder, underwriter, attorney, accountant or agent in connection with such
Registration Statement or any post-effective amendment thereto subsequent to the
filing thereof and prior to its effectiveness;
(i) if requested by the participating Series A Eligible Sellers and Eligible
Founders, promptly include in the Registration Statement or Prospectus, pursuant
to a supplement or post-effective amendment if necessary, such corrective,
supplementary or like information as the participating Series A Eligible Sellers
and Eligible Founders may reasonably request to have included therein; and make
all required filings of such Prospectus supplement or post-effective amendment
as soon as practicable after the Company is notified of the matters to be
included in such Prospectus supplement or post-effective amendment;
(j) furnish to each participating Series A Eligible Seller and Eligible
Founder and to each underwriter, without charge, such number of copies of the
Registration Statement 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;
(k) prior to any public offering of Restricted Stock, 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 underwriter reasonably shall request and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Restricted Stock covered by the applicable Registration Statement; provided,
however, that the Company shall not for any such purpose be required 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 other than as to matters and transactions relating to the
Registration Statement;
(l) 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;
(m) use its best efforts to cause the disposition of the Restricted Stock
covered by the Registration Statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such Restricted
Stock, subject to the proviso contained in clause (k) above;
(n) in connection with any sale of Restricted Stock that will result in such
securities no longer being Restricted Stock, cooperate with the Series A
Investors to facilitate the timely preparation and delivery of certificates
representing Restricted Stock to be sold and not bearing any restrictive
legends; and to register such Restricted Stock in such denominations and such
names as the selling Series A Investors may request at least two Business Days
prior to such sale of Restricted Stock;
(o) if the offering is underwritten and at the request of any participating
Series A Eligible Seller or Eligible Founder, enter into such agreements
(including underwriting agreements) and make such reasonable representations and
warranties and take all such other reasonable actions in connection therewith in
order to expedite or facilitate the disposition of the Restricted Stock pursuant
to any applicable Registration Statement contemplated by this Agreement as may
be reasonably requested by the participating Series A Eligible Seller or
Eligible Founder in connection with any sale or resale pursuant to any
applicable Registration Statement; in such connection, the Company shall upon
request of any participating Series A Eligible Seller or Eligible Founder,
furnish (or in the case of clauses (ii) and (iii), use its best efforts to cause
to be furnished) to such Series A Eligible Seller and Eligible Founder, on the
date that Restricted Stock is delivered to the underwriters for sale pursuant to
such registration: (i) such documents and certificates as may be reasonably
requested by the participating Series A Eligible Sellers and Eligible Founders
to evidence compliance with the applicable matters covered in this Section 6,
(ii) a letter, dated such date, from the Company's independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
and (iii) an opinion, dated as of such date, of counsel representing the Company
covering substantially the same matters with respect to such Registration
Statement as are customarily covered in opinions of issuer's counsel delivered
to underwriters with respect to similar registration statements in underwritten
public offerings, addressed to the participating Series A Eligible Sellers and
Eligible Founders and the underwriters;
(p) otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission, and make generally available to its security
holders with regard to any applicable Registration Statement, as soon as
practicable (but not sooner than the filing deadline of the last quarterly
report included therein), a consolidated earnings statement meeting the
requirements of Rule 158 of the Securities Act (which need not be audited)
covering a twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in Rule 158(c) under the
Securities Act); and
(q) if such documents are not readily available on the Commission's XXXXX
database, or any successor thereto, provide promptly to the Series A Investors,
upon request, each document filed with the Commission pursuant to the
requirements of Section 13 or Section 15(d) of the Exchange Act.
For purposes of Sections 3(b) and (e), Section 4(b) and Section 5, the
period of distribution of Restricted Stock in a firm commitment underwritten
public offering shall be deemed to extend until the earlier of (i) one hundred
twenty (120) days or (ii) the date on which each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted Stock in any other registration shall be deemed to extend until
the earlier of (i) 120 days or (ii) the date upon which the underwriter, if any,
terminates the lock-up agreements applicable to such distribution.
In connection with each registration hereunder, the Series A Eligible
Sellers and Eligible Founders participating shall (a) provide such information
and execute such documents as may reasonably be required in connection with such
registration, (b) agree to sell Restricted Stock on the basis provided in any
underwriting arrangements and (c) complete and execute all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements, which arrangements
shall not be inconsistent herewith.
In connection with each registration pursuant to any Registration Provision
covering an underwritten public offering, the Company and each participating
Series A Eligible Seller and Eligible Founder agree to enter into a written
agreement with the lead underwriter 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.
The Company may not withdraw any Registration Statement referred to in
Sections 3 or 5 without the consent of the party or parties initiating the
demand thereunder which such consent shall not be unreasonably withheld, delayed
or conditioned.
7. Conditions to Registration Obligations. The Company shall not be obligated to
effect the registration of the Restricted Stock pursuant to Sections 3, 4 or 5
unless the participating Series A Eligible Sellers and Eligible Founders consent
to customary conditions of a reasonable nature, including the following:
(a) conditions prohibiting the sale of Restricted Stock by the
participating Series A Eligible Sellers and Eligible Founders until the
registration is effective;
(b) conditions requiring the participating Series A Eligible Sellers and
Eligible Founders to comply with all applicable provisions of the
Securities Act and the Exchange Act including, but not limited to, the
prospectus delivery requirements of the Securities Act, and to furnish
to the Company information about sales made in such public offering;
(c) subject to the Registration Delay Limit, conditions prohibiting the
participating Series A Eligible Sellers and Eligible Founders upon
receipt of telegraphic or written notice from the Company that it is
required by law to correct or update the registration statement or
prospectus from effecting sales of the Restricted Stock until the
Company has completed the necessary correction or updating, provided,
that the Company shall use its best efforts to promptly complete such
necessary correction or updating; and
(d) conditions prohibiting the participating Series A Eligible Sellers and
Eligible Founders from selling all or substantially all of the
Restricted Stock of such participating Series A Eligible Sellers and
Eligible Founders in a block trade at a discount of more than the
lesser of 10% and two (2) times the then standard discount for block
trades of similar size and of similar securities issued by entities
with financial condition and prospects similar to the Company at such
time.
8. Expenses. The Company will pay all Registration Expenses in connection with
each Registration Statement pursuant to Sections 4 and 5 hereof. With respect to
registrations made pursuant to Section 3 hereof, the Company will pay all
Registration Expenses in connection with the first two registrations only. All
Registration Expenses of the third registration made pursuant to Section 3
hereof (excluding the fees and disbursements of counsel for any holder of
Restricted Stock other than a Series A Eligible Seller) shall be borne by the
participating Series A Eligible Sellers in proportion to the number of shares
sold by each, or by such participating Series A Eligible Sellers as they may
agree, except that if the Company participates in such third registration, then
the Company shall pay the incremental expenses of such third registration
attributable to the Company's participation in such third registration. All
Selling Expenses attributable to the sale of securities by Series A Eligible
Sellers or Eligible Founders in connection with each Registration Statement
under any Registration Provision shall be borne by the participating Series A
Eligible Sellers and Eligible Founders in proportion to the number of shares
sold by each, or by such participating Series A Eligible Sellers and Eligible
Founders as they may agree; and all Selling Expenses attributable to the sale of
securities by the Company in connection with any Registration Provision shall be
borne by the Company.
9. Indemnification and Contribution.
(a) In the event of a registration of any of the Restricted Stock under the
Securities Act pursuant to any Registration Provision, the Company will
indemnify and hold harmless each Series A Eligible Seller and Eligible Founder
thereunder and each underwriter of such Restricted Stock thereunder and each
other Person, if any, who controls such Series A Eligible Seller, Eligible
Founder or underwriter (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act), against any losses, claims, damages,
liabilities or judgments, joint or several, as incurred (including, without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action that could give rise
to any such losses, claims, damages, liabilities or judgments), to which such
Series A Eligible Seller, Eligible Founder 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, preliminary prospectus or
Prospectus (or any amendment or supplement thereto) provided by the Company to
any Series A Investor, underwriter, each other Person, if any, who controls such
Series A Eligible Seller, Eligible Founder or underwriter within the meaning of
the Securities Act or any prospective purchaser of Restricted Stock, (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 by the Company of the Securities Act, and will pay the legal
fees and other expenses, as incurred, of each such Series A Eligible Seller,
each such Eligible Founder, each such underwriter and each such controlling
Person incurred by them in connection with investigating or defending any such
loss, claim, damage, liability or action, provided, however, that the Company
will not be liable in any such case if and to the extent that any such loss,
claim, damage, liability or judgment arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
reliance upon and in conformity with information furnished by any such Series A
Eligible Seller, any such Eligible Founder, any such underwriter or any such
controlling Person, in each case, 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 any Registration Provision, each Series A Eligible
Seller and Eligible Founder thereunder, severally and not jointly, will
indemnify and hold harmless the Company, its directors and officers, and each
Person, if any, who controls (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) the Company, to the same extent as the
foregoing indemnity from the Company set forth in Section 8(a) hereof, but only
with reference to information relating to such Series A Eligible Seller or such
Eligible Founder, as the case may be, furnished in writing to the Company by
such Series A Eligible Seller or such Eligible Founder expressly for use in any
Registration Statement. In no event shall any Series A Eligible Seller, Eligible
Founder or its or their directors, officers or any Person who controls such
Series A Eligible Seller or Eligible Founder be liable or responsible for any
amount in excess of the gross proceeds (after deducting underwriting discounts
and selling commissions) received by such Series A Eligible Seller or Eligible
Founder with respect to its sale of Restricted Stock pursuant to a Registration
Statement.
(c) In case any action shall be commenced involving any Person in respect of
which indemnity may be sought pursuant to Section 9(a) or 9(b) (the "indemnified
party"), the indemnified party shall promptly notify the Person against whom
such indemnity may be sought (the "indemnifying Person") in writing; provided,
however, that failure of an indemnified party to provide such notice shall not
relieve an indemnifying Person of its obligations under this Section 8 if such
failure does not materially and adversely affect the rights of such indemnifying
Person. The indemnifying party may assume the defense of such action provided
that the expenses of the indemnified party are reimbursed as they are incurred
(including, without limitation, the payment of all fees and expenses of counsel
to the indemnified party) and such indemnifying party has not failed to comply
with any such reimbursement request. Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the reasonable fees and expenses of such counsel shall be at the
expense of the indemnified party, unless (i) the employment of such counsel
shall have been specifically authorized in writing by the indemnifying party,
(ii) the indemnifying party shall have failed to assume the defense of such
action or (iii) the named parties to any such action (including any impleaded
parties) include both the indemnified party and the indemnifying party, and the
indemnified party shall have been reasonably advised by such counsel that the
representation of the indemnifying party and the indemnified party by the same
counsel would be inappropriate due to actual or potential differing interests
between the indemnifying party and the indemnified party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such reasonable fees and expenses
shall be reimbursed as they are incurred. Such firm shall be designated in
writing by a majority of the Series A Eligible Sellers and Eligible Founders, in
the case of the parties indemnified pursuant to Section 9(a), and by the
Company, in the case of parties indemnified pursuant to Section 9(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with the indemnifying
party's written consent or (ii) effected without the indemnifying party's
written consent if the indemnifying party is adjudicated by a court of competent
jurisdiction to have breached its obligations under this Section 9 and the
indemnified party enters into a settlement more than twenty Business Days after
the indemnifying party shall have received a request from the indemnified party
for reimbursement for the reasonable fees and expenses of counsel (in any case
where such reasonable fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party shall
have failed to comply with such reimbursement request. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the indemnified party
is or could have been a party and indemnity or contribution may be or could have
been sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability on claims that are or could have been the subject
matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent that the indemnification provided for in this Section 9 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one hand, and the
Series A Eligible Sellers and Eligible Founders, on the other hand, from their
sale of Restricted Stock or (ii) if the allocation provided by clause (i) of
this Section 9(d) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in such clause
(i) but also the relative fault of the Company, on the one hand, and of the
Series A Eligible Seller and Eligible Founder, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Series A Eligible Seller and Eligible Founder, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, on the one hand,
or by the Series A Eligible Seller and Eligible Founder, on the other hand, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages, liabilities or
judgments referred to above shall be deemed to include, subject to the
limitations set forth in Section 9(c), any legal or other fees or expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any matter, including any action that could have given rise to such
losses, claims, damages, liabilities or judgments.
The Company and each Series A Eligible Seller and Eligible Founder
agree that it would not be just and equitable if contribution pursuant to this
Section 9(d) were determined by pro rata allocation (even if the Series A
Eligible Sellers and Eligible Founders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 8, no Series A Eligible Seller,
Eligible Founder, its or their directors or officers or any Person, if any, who
controls such Series A Eligible Seller or Eligible Founder shall be required to
contribute, in the aggregate, any amount in excess of the gross proceeds (after
deducting underwriting discounts and selling commissions) received by such
Series A Eligible Seller or Eligible Founder with respect to its sale of
Restricted Stock pursuant to a Registration Statement. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. The Series A Eligible Sellers' and
Eligible Founders' obligations to contribute pursuant to this Section 9(d) are
several in proportion to the respective shares of Restricted Stock held by each
Series A Eligible Seller and Eligible Founder hereunder and not joint.
10. Changes in Common Stock or Preferred Stock. If, and as often as, there is
any change in the Common 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.
11. Rule 144 Reporting and Rule 144A Information. With a view to making
available the benefits of certain rules and regulations of the Commission that
may at any time permit the resale of the Restricted Stock without registration,
the Company will:
(a) 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:
(i) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(ii) 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
(iii) furnish to each Series A Eligible Seller and Eligible Founder
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; and
(b) at any time, at the request of any Series A Eligible Seller or Eligible
Founder, make available to such Series A Eligible Seller or Eligible Founder, as
the case may be, and to any prospective transferee of Preferred Stock or shares
of Restricted Stock the information concerning the Company described in Rule
144A(d)(4) under the Securities Act.
12. Representations and Warranties of the Company. The Company represents and
warrants to the Series A Investors and Founders, as of the date hereof, 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 cause a
material violation of any provision of any law applicable to the Company, any
order of any court or other agency of government applicable to the Company, the
Certificate of Incorporation 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, subject to laws of general application from time
to time in effect affecting creditors' rights and the exercise of judicial
discretion in accordance with general equitable principles.
13. Lock-Up Period Agreements. In connection with any underwritten public
offering of the Company's securities, the Series A Investors hereby agree, and
each Series A Investor shall secure the agreement of any Investor Transferee,
upon request of the Company or the lead underwriter, not to sell or otherwise
transfer or dispose of any securities of the Company held by such person for a
period (the "Lock-Up Period") following the effective date of a registration
statement of the Company filed under the Securities Act with respect to such
offering. The Lock-Up Period shall not exceed 120 days after such effective date
for any public offering; provided, however, that in the case of an initial
public offering of Common Stock by the Company, the Lock-Up Period shall not
exceed 180 days after the effective date of such initial public offering. No
Lock-Up Period agreement shall apply under this Section 12 to any public
offering unless each executive officer, director, and holder of 1.5% of the
outstanding shares of Common Stock of the Company shall enter into the same
Lock-Up Period agreement or a Lock-Up Period agreement more favorable to the
Company in respect of such public offering. In the event that the provisions set
forth in Section 4(b) of this Agreement prevent a Series A Investor from
registering its Restricted Stock pursuant to Section 4(a) of this Agreement in a
public offering by the Company, such Series A Investor shall not be subject to
the Lock-Up Period agreement set forth in this Section 12 during such offering.
14. Miscellaneous.
(a) Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of each of the parties, including,
without limitation, Investor Transferees; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Restricted
Stock in violation of the terms hereof or of the Stock Purchase Agreement or the
Stockholders' Agreement; provided, further, that the rights of the Series A
Investors hereunder shall not be assignable to any competitor of the Company
unless such assignment is in connection with the sale by the Series A Investors
of a majority of the Restricted Stock held by the Series A Investors and notice
of such assignment and the identity of such transferee is provided to the
Company. If any transferee of any Series A Investor shall acquire Restricted
Stock in any manner, whether by operation of law or otherwise, such Restricted
Stock shall be held subject to all of the terms of this Agreement, and by taking
and holding such Restricted Stock such Person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement, including the restrictions on resale set forth in this Agreement
and, if applicable, the Stock Purchase Agreement and Stockholders' Agreement,
and such Person shall be entitled to receive the benefits hereof.
(b) Remedies. Each party to this Agreement acknowledges and agrees that any
failure by such party to comply with such party's obligations hereunder may
result in material irreparable injury to the other parties hereto for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the other parties may seek such relief as may be required to specifically
enforce the breaching party's obligations hereunder. Each party further agrees
to waive the defense in any action for specific performance that a remedy at law
would be adequate.
(c) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier with
confirmation and followed promptly by hard copy in accordance with this
provision, or courier guaranteeing reasonably prompt delivery and recognized for
high quality service:
(i) if to RSI ESO or RSI, at
Reckson Service Industries, Inc.
00 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Attn: Xxxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxxx
with copies to:
Xxxxx Xxxxxxx, Esq.
General Counsel
Reckson Service Industries, Inc.
00 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Xxxxx & Xxxx LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: J. Xxxxxx Xxxxxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
(ii) if to Xxxxxx X. Xxxxxxxxxxx, at
00 Xxx Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to:
Orrick, Herringon & Sutcliffe LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
(iii) if to H. Xxxxx Xxxx, at
00 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to:
Orrick, Herringon & Sutcliffe LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
(iv) if to the Company, at
eSourceOne, Inc.
00 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: H. Xxxxx Xxxx, Chief Financial Officer
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to:
Orrick, Herringon & Sutcliffe LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Tel: 000-000-0000
Fax: 000-000-0000
or, in any case, at such other address or addresses as shall have been furnished
in writing by one party to the other parties in accordance with the provisions
of this Section 14(c).
All such notices and communications shall be deemed to have been duly
given: at the time delivered, if delivered by hand, telex or by courier; five
(5) business days after being deposited in the mail, if mailed; and when receipt
acknowledged, if telecopied.
(d) Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflict of law rules thereof, applicable to contracts made and to be performed
within such State.
(e) Submission to Jurisdiction. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive jurisdiction
of the courts of the State of New York and of the United States of America, in
each case located in the County of New York, for any action, proceeding or
investigation in any court or before any governmental authority ("Litigation")
arising out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any Litigation relating thereto except in
such courts). Each of the parties hereto hereby irrevocably and unconditionally
waives any objection to the laying of venue of any Litigation arising out of
this Agreement or the transactions contemplated hereby in the courts of the
State of New York or the United States of America, in each case located in the
County of New York, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such Litigation
brought in any such court has been brought in an inconvenient forum.
(f) No Inconsistent Agreements. The Company will not, on or after the date
of this Agreement, enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Series A Investors in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted
to the Series A Investors hereunder do not in conflict in any material respect
with and are not inconsistent with the rights granted to the holders of the
Company's securities under any agreement in effect on the date hereof. The
Company shall not grant to any third party any registration rights that are more
favorable than, inconsistent with, or equivalent to any of those contained
herein, so long as any of the registration rights under this Agreement remains
in effect, except that the Company may grant to any third party who purchases
from the Company Second Round Securities (as defined in the Stock Purchase
Agreement) registration rights that are equivalent to any or all of those
contained herein.
(g) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given, unless (i) in the case of this Section
13(g), the Company has obtained the written consent of each Series A Eligible
Seller, and (ii) in the case of all other provisions hereof, the Company has
obtained the written consent of the Series A Eligible Sellers holding a majority
of the outstanding shares of Restricted Stock (excluding Restricted Stock held
by the Company or any of its affiliates (as defined in Rule 144 under the
Securities Act)).
(h) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. In proving this Agreement
it shall not be necessary to produce or account for more than one such
counterpart executed by the party against whom enforcement is sought.
(i) Termination. This Agreement and the rights granted herein with respect
to any Series A Eligible Seller or Eligible Founder shall terminate on the
earlier of (i) the seventh (7th) anniversary of a Qualified Initial Public
Offering and (ii) such time that all of the Restricted Stock held by such Series
A Eligible Seller or Eligible Founder can be sold under Rule 144(k) promulgated
under the Securities Act.
(j) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(k) Severability. 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 unless the effect thereof would be to alter materially the effect of
this Agreement, and this Agreement (if not so altered) shall be carried out as
if any such illegal, invalid or unenforceable provision were not contained
herein.
(l) Delays or Omissions. It is agreed that no delay or omission to exercise
any right, power or remedy on the part of any party upon any breach or default
of any party to this Agreement shall impair any such right, power or remedy, nor
shall it be construed to be a waiver of any such breach or default, or any
acquiescence therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. It is further
agreed that any waiver, permit, consent or approval of any kind or character on
any party of any breach or default under this Agreement must be in writing and
shall be effective only to the extent specifically set forth in such writing and
that all remedies either under this Agreement, or by law otherwise afforded to
any party, shall be cumulative and not alternative.
(m) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Restricted
Stock. This Agreement supersedes all prior agreements and understandings between
the parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
eSourceOne, Inc.
By: ___________________________________
Chief Executive Officer
THE SERIES A INVESTORS
RSI ESO, Inc.
By: ____________________________________
Name:
Title:
RECKSON SERVICE INDUSTRIES, INC.
By: _____________________________________
Name:
Title:
THE FOUNDERS
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H. Xxxxx Xxxx
