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Exhibit 4.4
INTEGRATED INFORMATION SYSTEMS, INC.
AMENDED AND RESTATED REGISTRATION AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION AGREEMENT (this "Agreement")
is made as of January 13, 2000, by and among Integrated Information Systems,
Inc., a Delaware corporation (the "Company"), each of the holders of the
Company's Series A and Series B Preferred Stock listed in the "Original
Investors" section of the Schedule of Investors attached hereto (the "Original
Investors"), and each of the Persons listed in the "Investors" section of the
Schedule of Investors attached hereto (the "Investors").
RECITALS
WHEREAS, the Company and the Investors have entered into a Series C
Preferred Stock Purchase Agreement (the "Purchase Agreement") of even date
herewith pursuant to which the Company desires to sell to the Investors and the
Investors desire to purchase from the Company shares of the Company's Series C
Preferred Stock, par value $.001 (the "Series C Preferred Stock"); and
WHEREAS, the Company and the Original Investors previously entered
into a Registration Agreement dated April 12, 1999 (the "Original Registration
Agreement"); and
WHEREAS, a condition to the Investors' obligations under the
Purchase Agreement is that the Company, Original Investors, and Investors enter
into this Agreement for the purpose, among others, of (i) amending and restating
the Original Registration Agreement, (ii) inducing the Company and the Investors
to execute and deliver the Purchase Agreement, and (iii) providing Original
Investors and Investors with certain rights to register shares of the Company's
Common Stock issuable upon conversion of the Series A, Series B, and Series C
Preferred Stock held by the Original Investors and Investors.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
SECTION 1. DEMAND REGISTRATIONS.
(a) Requests for Registration. At any time and from time to time
from and after the earlier of (i) the twenty-four month anniversary of the date
of this Agreement, and (ii) the six month anniversary of the date of closing of
the Company's IPO, the holders of a majority of the Registrable Securities may
request registration under the Securities Act of all or any portion of their
Registrable Securities on Form S-1 or any similar long-form registration
("Long-Form Registrations"), and the holders of a majority of the Registrable
Securities may request registration under the Securities Act of all or any
portion of their Registrable Securities on Form S-2 or S-3 or any similar
short-form registration if available ("Short-Form Registrations"). All
registrations requested pursuant to this Section 1(a) are referred to herein as
"Demand Registrations." Each request for a Demand Registration shall specify the
approximate number of Registrable Securities requested to be registered, the
anticipated per share price range for such
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offering and the intended method of distribution of the Registrable Securities
to be sold. Within 10 days after receipt of any such request, the Company shall
give written notice of such requested registration to all other holders of
Registrable Securities and, subject to the terms of Section 1(d) hereof, shall
include in such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein within 15 days
after the receipt of the Company's notice.
(b) Long-Form Registrations. The holders of Registrable Securities
shall be entitled to request (i) two Long Form Registrations in which the
Company shall pay all Registration Expenses provided that the gross proceeds of
each such registration are expected to exceed $500,000 ("Company-paid Long-Form
Registrations") and (ii) two Long-Form Registrations in which the holders of
Registrable Securities shall pay their share of the Registration Expenses as set
forth in Section 5 hereof. A registration shall not count as one of the
permitted Company-paid Long-Form Registrations until both (i) it has become
effective and (ii) the holders of Registrable Securities are able to register
and sell at least 90% of the Registrable Securities requested to be included in
such registration; provided that the Company shall in any event pay all
Registration Expenses in connection with any registration initiated as a
Company-paid Long-Form Registration whether or not it has become effective and
whether or not such registration has counted as one of the permitted
Company-paid Long-Form Registrations. All Long-Form Registrations shall be
underwritten registrations unless otherwise requested by the holders of a
majority of the Registrable Securities requesting such Long-Form Registration.
(c) Short-Form Registrations. In addition to the Long-Form
Registrations provided pursuant to Section 1(b), the holders of Registrable
Securities shall be entitled to request an unlimited number of Short-Form
Registrations in which the Company shall pay all Registration Expenses provided
that the gross proceeds of each such registration are expected to exceed
$250,000. Demand Registrations shall be Short-Form Registrations whenever the
Company is permitted to use any applicable short form. After the Company has
become subject to the reporting requirements of the Securities Exchange Act, the
Company shall use its reasonable best efforts to make Short-Form Registrations
available for the sale of Registrable Securities.
(d) Priority on Demand Registrations. The Company shall not include
in any Demand Registration any securities which are not Registrable Securities
without the prior written Consent of the holders of a majority of the
Registrable Securities requested to be included in such Demand Registration. If
a Demand Registration is an underwritten offering and the managing underwriters
advise the Company in writing that in their opinion the number of Registrable
Securities and, if permitted hereunder, other securities requested to be
included in such offering exceeds the number of Registrable Securities and other
securities which can be sold therein in an orderly manner in such offering
within a price range acceptable to the holders of a majority of Registrable
Securities requested to be included in such offering, the Company shall include
in such registration prior to the inclusion of any securities which are not
Registrable Securities the number of Registrable Securities requested to be
included which in the opinion of such underwriters can be sold in an orderly
manner within the price range of such offering, pro rata among the respective
holders thereof on the basis of the amount of Registrable Securities requested
to be included therein by each such holder. Any Persons other than holders of
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Registrable Securities who participate in Demand Registrations which are not at
the Company's expense must pay their share of the Registration Expenses as
provided in Section 5 hereof.
(e) Restrictions on Registrations. The Company shall not be
obligated to effect any Demand Registration within 180 days after the effective
date of a previous Demand Registration. The Company may postpone for up to 180
days the filing or the effectiveness of a registration statement for a Demand
Registration if the Company reasonably determines that such Demand Registration
would reasonably be expected to have a material adverse effect on any proposal
or plan by the Company or any of its Subsidiaries to engage in any financing,
acquisition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer, reorganization or similar transaction;
provided that in such event, the holders of Registrable Securities initially
requesting such Demand Registration shall be entitled to withdraw such request
and, if such request is withdrawn, such Demand Registration shall not count as
one of the permitted Demand Registrations hereunder (if all of the holders of
Registrable Securities initially requesting such Demand Registration withdraw
such request) and the Company shall pay all Registration Expenses in connection
with such registration. The Company may delay a Demand Registration hereunder
only once in any twelve-month period.
(f) Selection of Underwriters. The holders of a majority of the
Registrable Securities requested to be included in any Demand Registration
shall, with the consent of the Company which consent shall not be unreasonably
withheld, have the right to select the investment banker(s) and manager(s) to
administer the offering.
(g) Other Registration Rights. The Company represents and warrants
that it is not a party to, or otherwise subject to, any other agreement granting
registration rights to any other Person with respect to any securities of the
Company, except pursuant to that certain warrant issued to Imperial Bank. Except
as provided in this Agreement, the Company shall not grant to any Persons the
right to request the Company to register any equity securities of the Company,
or any Securities convertible or exchangeable into or exercisable for such
securities, without the prior written consent of the holders of a majority of
the Registrable Securities; provided that the Company may grant rights to
shareholders, employees, directors and consultants of the Company and to Persons
who have acquired securities of the Company in connection with acquisitions by
the Company to participate in registrations so long as such rights are
subordinate to the rights of the holders of Registrable Securities as set forth
herein and subject to the reasonable consent of the holders of a majority of the
Registrable Securities.
SECTION 2. PIGGYBACK REGISTRATIONS.
(a) Right to Piggyback. Whenever the Company proposes to register
any of its securities (including any proposed registration of the Company's
securities by any third party) under the Securities Act (other than pursuant to
a Demand Registration) and the registration form to be used may be used for the
registration of any Registrable Securities (a "Piggyback Registration"), the
Company shall give prompt written notice to all holders of Registrable
Securities of its intention to effect such a registration and, subject to the
terms of Section 2(c) and 2(d) hereof, shall include in such registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within 20 days after the receipt of the Company's
notice.
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(b) Piggyback Expenses. The Registration Expenses of the holders of
Registrable Securities shall be paid by the Company in all Piggyback
Registrations.
(c) Priority on Primary Registrations. If a Piggyback Registration
is an underwritten primary registration on behalf of the Company, and the
managing underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering without adversely affecting the
marketability of the offering, the Company shall include in such registration
(i) first, the securities the Company proposes to sell, (ii) second, the
Registrable Securities requested to be included in such registration, pro rata
among the holders of such Registrable Securities on the basis of the number of
shares requested to be included therein by each such holder, and (iii) third,
other Securities requested to be included in such registration pro rata among
the holders thereof on the basis of the number of shares requested to be
included therein.
(d) Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of the Company's
securities and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without
adversely affecting the marketability of the offering, the Company shall include
in such registration (i) first, the securities requested to be included therein
by the holders requesting such registration and the Registrable Securities
requested to be included in such registration, pro rata among all holders
thereof on the basis of the number of shares of such securities and of
Registrable Securities requested to be included therein by each such holder, and
(ii) second, other securities requested to be included in such registration pro
rata among the holders thereof on the basis of the number of shares requested to
be included therein.
(e) Other Registrations. If the Company has previously filed a
registration statement with respect to Registrable Securities pursuant to
Section 1 or pursuant to this Section 2, and if such previous registration has
not been withdrawn or abandoned, the Company shall not file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-8 or any successor form), whether on its
own behalf or at the request of any holder or holders of such securities,
without the prior written consent of the holders of a majority of the
Registrable Securities covered by such previous registration statement(s) until
a period of at least 180 days has elapsed from the effective date of such
previous registration.
SECTION 3. HOLDBACK AGREEMENT. The Company (a) agrees not to effect
any public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven days prior to and during the 90-day period (or such longer period as may
be requested by the lead underwriter) beginning on the effective date of any
underwritten Demand Registration or any underwritten Piggyback Registration
(except as part of such underwritten registration or pursuant to registrations
on Form S-4 or S-8 or any successor form), unless the underwriters managing the
registered public offering otherwise agree, provided, however, that such
limitation may not be invoked more than two times in any calendar year, and (b)
shall cause each holder of at least 5% of its Common Stock (on a fully-diluted
basis) (whether such holder holds Common Stock or any securities
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convertible into or exchangeable or exercisable for Common Stock) purchased from
the Company at any time after April 12, 1999 (other than in a registered public
offering) to agree not to effect any public sale or distribution (including
sales pursuant to Rule 144) of any such securities during such period (except as
part of such underwritten registration, if otherwise permitted), unless the
underwriters managing the registered public offering otherwise agree.
SECTION 4. REGISTRATION PROCEDURES. Whenever any holder of
Registrable Securities has requested that any Registrable Securities be
registered pursuant to this Agreement, the Company shall use its reasonable best
efforts to effect the registration and the sale of such Registrable Securities
in accordance with the intended method of disposition thereof, and pursuant
thereto the Company shall as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and use its
reasonable best efforts to cause such registration statement to become effective
(provided that before filing a registration statement or prospectus or any
amendments or supplements thereto, the Company shall furnish to the counsel
selected by the holders of a majority of the Registrable Securities covered by
such registration statement copies of all such documents proposed to be filed,
which documents shall be subject to the review and comment of such counsel).
(b) notify each holder of Registrable Securities of the
effectiveness of each registration statement filed hereunder and prepare and
file with the Securities and Exchange Commission such amendments and supplements
to such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective until the
earlier of two weeks after completion of the distribution or 180 days, and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
(c) furnish to each seller of Registrable Securities such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller;
(d) use its reasonable best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such seller (provided that the Company shall not be required
to (i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection, (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of process
in any such jurisdiction);
(e) promptly notify each seller of such Registrable Securities, 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
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statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and, at the request of
any such seller, the Company shall prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not contain an untrue statement of
a material fact or omit to state any fact necessary to make the statements
therein not misleading, provided that the Company shall have the right to
postpone the preparation and filing of such supplement or amendment for a period
not to exceed thirty (30) days if such supplement or amendment would reasonably
be expected to have a material adverse effect on any proposal or plan by the
Company or any of its Subsidiaries to engage in any financing, acquisition of
assets (other than in the ordinary course of business) or any merger,
consolidation, tender offer, reorganization or similar transaction;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar Securities issued by the Company are then
listed and, if not so listed, to be listed on the NASD automated quotation
system and, if listed on the NASD automated quotation system, use its reasonable
best efforts to secure designation of all such Registrable Securities covered by
such registration statement as a NASDAQ "national market system security" within
the meaning of Rule 11Aa2-1 of the Securities and Exchange Commission or,
failing that, to secure NASDAQ authorization for such Registrable Securities
and, without limiting the generality of the foregoing, to arrange for at least
two market makers to register as such with respect to such Registrable
Securities with the NASD;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including effecting a stock split or a combination of
shares);
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(j) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission, and
make available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company's first full calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
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(k) permit any holder of Registrable Securities which holder, in its
reasonable judgement, might be deemed to be an underwriter or a controlling
person of the Company, to participate in the preparation of such registration or
comparable statement and to require the insertion therein of material furnished
to the Company in writing, which in the reasonable judgment of such holder and
its counsel and the Company and its counsel should be included;
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company shall use its reasonable best efforts promptly to
obtain the withdrawal of such order;
(m) obtain a comfort letter from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by comfort letters as the holders of a majority of the Registrable
Securities being sold reasonably request (provided that such Registrable
Securities constitute at least 10% of the securities covered by such
registration statement); and
(n) provide a legal opinion of the Company's outside counsel, dated
the effective date of such registration statement (and, if such registration
includes an underwritten public offering, dated the date of the closing under
the underwriting agreement), with respect to the registration statement, each
amendment and supplement thereto, the prospectus included therein (including the
preliminary prospectus) and such other documents relating thereto in customary
form and covering such matters of the type customarily covered by legal opinions
of such nature.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing.
Upon receipt of any notice from the Company of the existence of any
event of the kind described in Section 4(e) or 4(l) above, each seller of
Registrable Securities shall immediately discontinue disposition of Registrable
Securities pursuant to the registration statement until the registration has
been supplemented or amended in accordance with Section 4(e) or until withdrawal
of the stop order referred to in Section 4(l).
SECTION 5. REGISTRATION EXPENSES.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, fees and disbursements
of custodians, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts and
commissions) and other Persons retained by the Company (all such expenses being
herein called "Registration Expenses"), shall be borne as provided in this
Agreement, except that the Company shall, in any event, pay its internal
expenses (including, without limitation, all
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salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance and the expenses and fees for listing the
securities to be registered on each securities exchange on which similar
securities issued by the Company are then listed or on the NASD automated
quotation system.
(b) In connection with each Company-paid Long Form Registration,
Short Form Registration and each Piggyback Registration, the Company shall
reimburse the holders of Registrable Securities included in such registration
for the reasonable fees and disbursements of one counsel chosen by the holders
of a majority of the Registrable Securities included in such registration.
(c) To the extent Registration Expenses are not required to be paid
by the Company, each holder of securities included in any registration hereunder
shall pay those Registration Expenses allocable to the registration of such
holder's securities so included, and any Registration Expenses not so allocable
shall be borne by all sellers of securities included in such registration in
proportion to the aggregate selling price of the securities to be so registered.
SECTION 6. INDEMNIFICATION.
(a) The Company agrees to indemnify, to the extent permitted by law,
each holder of Registrable Securities, its officers and directors and each
Person who controls such holder (within the meaning of the Securities Act)
against all losses, claims, damages, liabilities and expenses caused by any
untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such holder expressly for use
therein or by such holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished such holder with a sufficient number of copies of the
same. In connection with an underwritten offering, the Company shall indemnify
such underwriters, their officers and directors and each Person who controls
such underwriters (within the meaning of the Securities Act) to the same extent
as provided above with respect to the indemnification of the holders of
Registrable Securities.
(b) In connection with any registration statement in which a holder
of Registrable Securities is participating, each such holder shall furnish to
the Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, shall indemnify the Company, its
directors and officers and each Person who controls the Company (within the
meaning of the Securities Act) against any losses, claims, damages, liabilities
and expenses resulting from any untrue or alleged untrue statement of material
fact contained in the registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or omission is contained in any information or affidavit so
furnished in
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writing by such holder; provided that the obligation to indemnify shall be
individual, not joint and several, for each holder and shall be limited to the
net amount of proceeds received by such holder from the sale of Registrable
Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder shall (1) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party) and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim shall not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnification provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and shall survive the transfer of securities. The
Company also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
SECTION 7. PARTICIPATION IN UNDERWRITTEN REGISTRATION. No Person may
participate in any registration hereunder which is underwritten unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements, provided that no
holder of Registrable Securities included in any underwritten registration shall
be required to make any representations or warranties to the Company or the
underwriters (other than representations and warranties regarding such holder
and such holder's title to the registered shares and intended method of
distribution) or to undertake any indemnification obligations to the Company or
the underwriters with respect thereto, except as otherwise provided in Section 6
hereof.
SECTION 8. DEFINITIONS.
(a) Definitions. For purposes of this Agreement, the following terms
have the meanings set forth below:
"Common Stock" means the Common Stock of the Company, par value
$.001 per share.
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"IPO" means the initial sale of Common Stock to the public pursuant
to an underwritten offering registered under the Securities Act.
"Permitted Transferee" shall have the meaning ascribed to such term
in that certain Stockholders Agreement, dated as of the date hereof, by and
among the Company, the Investors and certain other holders of Common Stock
listed on the signature pages thereto.
"Registrable Securities" means (i) any shares of Common Stock issued
upon the conversion of any shares of Series A Preferred Stock issued pursuant to
the Original Purchase Agreement, (ii) any shares of Common Stock issued upon the
conversion of any shares of Series B Preferred Stock issued pursuant to a
supplement to the Original Purchase Agreement, (iii) any shares of Common Stock
issued upon the conversion of any shares of Series C Preferred issued pursuant
to the Purchase Agreement, (iv) any Common Stock or other security issued or
issuable with respect to the securities referred to in clauses (i), (ii) and
(iii), above, by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization, (v) any other shares of Common Stock held by Persons holding
securities referred to in clauses (i), (ii), (iii) and (iv), above, and (vi) any
Common Stock or other security held by Persons holding securities referred to in
clauses (i), (ii), (iii) and (iv), above, issued or issuable with respect to the
securities referred to in clause (v), above, by way of a stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when they
have been distributed to the public pursuant to an offering registered under the
Securities Act or sold to the public through a broker, dealer or market maker in
compliance with Rule 144 under the Securities Act (or any similar rule then in
force). For purposes of this Agreement, a Person shall be deemed to be a holder
of Registrable Securities whenever such Person has the right to acquire such
Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), whether or not such acquisition
has actually been effected.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Series A Preferred Stock" means the Company's Series A Preferred
Stock, par value $.001 per share.
"Series B Preferred Stock" means the Company's Series B Preferred
Stock, par value $.001 per share.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar federal law then in force.
(b) Other Definitions. The terms set forth below are defined on the
following pages of the Agreement.
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Agreement........................... 1
Company............................. 1
Company-paid Long-Form Registrations 2
Demand Registrations................ 1
Investor............................ 1
Investors........................... 1
Long-Form Registrations............. 1
Original Investors.................. 1
Original Purchase Agreement......... 1
Original Registration Agreement..... 1
Piggyback Registration.............. 4
Purchase Agreement.................. 1
Registration Expenses............... 8
Series C Preferred Stock............ 1
Short-Form Registrations............ 1
SECTION 9. TERM. This Agreement shall terminate and be of no further
force or effect upon the earlier of (i) five years from the date of this
Agreement or (ii) the date upon which all of the Registrable Securities are
freely tradable in the public market without restriction as to timing or amount.
SECTION 10. MISCELLANEOUS.
(a) No Inconsistent Agreements. The Company has not entered into and
shall not hereafter enter into any agreement with respect to its securities
which is inconsistent with or violates the rights granted to the holders of
Registrable Securities in this Agreement.
(b) Adjustments Affecting Registrab1e Securities. The Company shall
not knowingly take any action, or permit any change to occur, with respect to
its securities which would materially and adversely affect the ability of the
holders of Registrable Securities to include such Investor Registrable
Securities in a registration undertaken pursuant to this Agreement or which
would adversely affect the marketability of such Registrable Securities in any
such registration (including, without limitation, effecting a stock split or a
combination of shares).
(c) Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that, in addition to any other rights and
remedies existing in its favor, any party shall be entitled to specific
performance and/or other injunctive relief from any court of law or equity of
competent jurisdiction (without posting any bond or other security) in order to
enforce or prevent violation of the provisions of this Agreement.
(d) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and holders of a majority of the Registrable
Securities.
(e) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the
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benefit of purchasers or holders of Registrable Securities are also for the
benefit of, and enforceable by, any subsequent holder of Registrable Securities.
(f) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(g) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same Agreement.
(h) Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
(i) Governing Law. The corporate law of the State of Delaware shall
govern all issues and questions concerning the relative rights of the Company
and its stockholders. All other issues and questions concerning the
construction, validity, interpretation and enforcement of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
(j) Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
to the recipient, sent to the recipient by reputable overnight courier service
(charges prepaid) or mailed to the recipient by certified or registered mail,
return receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to each Investor at the address indicated on the
Schedule of Investors and to the Company at the address indicated below:
Integrated Information Systems, Inc.
Fountainhead Corporate Park
0000 X. Xxxxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Chief Executive Officer
Telecopy No.: (000) 000-0000
with a copy to (which shall not constitute
notice hereunder):
Xxxxx & Xxxxxx L.L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of
the date and year first above written.
THE COMPANY INTEGRATED INFORMATION SYSTEMS, INC.
By:_________________________________________
Its:________________________________________
ORIGINAL INVESTORS ABN AMRO CAPITAL (USA), INC.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
I EAGLE TRUST
By: ABN AMRO INCORPORATED
Its: Manager
By:__________________________________
Name:________________________________
Title:_______________________________
ABN AMRO INCORPORATED
By:_________________________________________
Name:_______________________________________
Title:______________________________________
13
14
XXXXXXX CAPITAL, LLC
By:_________________________________________
Name:_______________________________________
Title:______________________________________
INVESTORS DAMAC TECHNOLOGY PARTNERS
By:_________________________________________
Name:_______________________________________
Title:______________________________________
DAMAC INVESTORS, INC.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
DAMAC INVESTORS VIII, INC.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
14
15
DAMAC INVESTORS IX, INC.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
MGCM PARTNERS L.P.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
RS EMERGING GROWTH PARTNERS L.P.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
RS EMERGING PREMIUM PARTNERS L.P.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
15
16
RS PACIFIC PARTNERS
By:_________________________________________
Name:_______________________________________
Title:______________________________________
TERA CAPITAL LP #1
[XXXXX INVESTMENTS LIMITED]
By:_________________________________________
Name:_______________________________________
Title:______________________________________
TERA CAPITAL LP #2
By:_________________________________________
Name:_______________________________________
Title:______________________________________
PETROS CAPITAL
By:_________________________________________
Name:_______________________________________
Title:______________________________________
16
17
JDMD INVESTMENTS, L.L.C.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
XXXXX XXXXX
_____________________________________________
12 SQUARED PARTNERS, LLC
By:_________________________________________
Name:_______________________________________
Title:______________________________________
DIAMOND VENTURE CAPITAL III, L.L.C.
By: Diamond Ventures
Its: Manager
By:___________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
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SCHEDULE OF INVESTORS
SERIES A SERIES B SERIES C
NAME AND ADDRESS PREFERRED SHARES PREFERRED SHARES PREFERRED SHARES
---------------- ---------------- ---------------- ----------------
ORIGINAL INVESTORS:
ABN AMRO CAPITAL (USA), INC.
c/o ABN AMRO Private Equity
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx 1,165,582 521,306 145,507
I EAGLE TRUST
c/o ABN AMRO Private Equity
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx 421,824 188,660 52,658
ABN AMRO INCORPORATED
c/o ABN AMRO Private Equity
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx 79,260 -- --
XXXXXXX CAPITAL, LLC
c/o ABN AMRO Private Equity
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx -- 41,913 11,698
INVESTORS:
DAMAC TECHNOLOGY PARTNERS
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxx -- -- 209,864
DAMAC INVESTORS INC.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxx -- -- 104,932
DAMAC INVESTORS VIII, INC.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxx -- -- 104,932
DAMAC INVESTORS IX, INC.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxx -- -- 104,932
19
SERIES A SERIES B SERIES C
NAME AND ADDRESS PREFERRED SHARES PREFERRED SHARES PREFERRED SHARES
---------------- ---------------- ---------------- ----------------
MGCM PARTNERS L.P.
0000 Xxxxxxx Xxxxxx, Xx. 0
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: X. Xxxxxxx -- -- 524,659
RS EMERGING GROWTH PARTNERS L.P.
c/o RS Funds
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxx -- -- 50,161
RS EMERGING PREMIUM PARTNERSL.P.
c/o RS Funds
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxx -- -- 64,808
RS PACIFIC PARTNERS
c/o RS Funds
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxx -- -- 94,895
TERA CAPITAL LP #1
[XXXXX INVESTMENTS LIMITED]
000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx X0X0X0
Xxxxxx -- -- 41,973
Attn: Xxxxxx Xxxxxx
TERA CAPITAL LP #2
000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx X0X0X0
Xxxxxx -- -- 10,493
Attn: Xxxxxx Xxxxxx
XXXXXX CAPITAL
0000 X. Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxxx -- -- 209,864
JDMD INVESTMENTS, L.L.C.
0000 X. Xxxxxxx Xxxxxxxx Xxxxxx
Xxxxxxxx #0, Xxxxx 0000
Xxxxxxx, Arizona 85016
Attn: Xxx Xxxxx -- -- 104,932
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SERIES A SERIES B SERIES C
NAME AND ADDRESS PREFERRED SHARES PREFERRED SHARES PREFERRED SHARES
---------------- ---------------- ---------------- ----------------
XXXXX XXXXX
00000 Xxxxx Xxxxx Xxxx.
Xxxxxxx Xxxxxxx 00000 -- -- 26,233
12 Squared Partners, LLC
00000 Xxxxx Xxxxx Xxxx.
Xxxxxxx, Xxxxxxx 00000 -- -- 131,165
Diamond Venture Capital III, L.L.C.
0000 Xxxxx Xxxx
Xxxxxx, Xxxxxxx -- -- 125,918
Attn: Xxxxxx Xxxxxxx
3
