REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
March 15, 2000 between XxxxxxxXxx.xxx, Inc., a Delaware corporation (the
"Company"), and the investors listed on the signature page hereto (each, an
"Investor").
RECITALS:
A. Concurrently with the execution of this Agreement, each Investor is
acquiring from the Company shares of the Company's Series C Preferred Stock, par
value $.001 per share ("Series C Stock"), pursuant to a Series C Preferred Stock
Purchase Agreement between the Company and such Investor (a "Purchase
Agreement").
B. By entering into this Agreement and granting the registration rights
provided for herein, the Company wishes to provide a further inducement to each
Investor to purchase Series C Stock pursuant to a Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing, the parties agree as
follows:
1. Certain Definitions. For purposes of this Agreement:
(a) "Class A Common Stock" means the Class A Common Stock, par
value $.001 per share, of the Company, or any successor security.
(b) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(c) "Form S-3" means such form under the Securities Act as in
effect on the date hereof or any successor registration form under the
Securities Act.
(d) "Holder" means any Person owning or having the right to
acquire Registrable Securities or any assignee thereof in accordance
with Section 12 below.
(e) "majority in interest of the Initiating Holders" means
Initiating Holders holding a majority of the Registrable Securities held
by all Initiating Holders.
(f) "Person" means any individual, partnership, corporation,
unincorporated organization or association, limited liability company,
trust or other firm or entity.
(g) "Qualified Initial Public Offering" means an offering by the
Company of its equity securities to the general public in which the net
proceeds to the Company are in excess of $20,000,000 (after deduction of
underwriters' discounts and commissions and expenses of the offering)
and the public offering price per share is equal to or greater than
$10.00 (as adjusted for stock splits, divisions, combinations or similar
events) and the underwritten equity securities are listed for trading on
either the New York Stock Exchange, the American Stock Exchange or The
Nasdaq Stock Market's National Market
(h) "Register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement
or similar document in compliance with the Securities Act and the
declaration or ordering of effectiveness of such registration statement
or document.
(i) "Registrable Securities" means (1) any shares of Class A
Common Stock (or any successor security) issued or issuable to the
Holders upon conversion of their shares of Series C Stock and (2) any
shares of Class A Common Stock (or any successor security) issued as a
dividend or other distribution with respect to such Series C Stock or
shares of Class A Common Stock issued or issuable upon conversion of
such Series C Stock and (3) any securities of the Company convertible
into, or exercisable or exchangeable for, shares of Class A Common Stock
and issued as a dividend or distribution with respect to such Series C
Stock or Class A Common Stock issued or issuable upon conversion of such
Series C Stock; provided, however, that any Registrable Securities sold
by a Person in a transaction in which such Person's rights under this
Agreement are not assigned pursuant to Section 12 below shall cease to
be Registrable Securities from and after the time of such sale.
Notwithstanding the foregoing, securities shall not be treated as
Registrable Securities if (A) a registration statement with respect to
the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in
accordance with such registration statement or (B) such securities have
been sold pursuant to Rule 144 (or any successor provision) under the
Securities Act.
(j) "SEC" means the Securities and Exchange Commission.
(k) "Securities Act" means the Securities Act of 1933, as
amended.
(l) "Violation" means any of the following statements, omissions
or violations: (i) any untrue statement or alleged untrue statement of a
material fact contained in a registration statement under this
Agreement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto; or (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.
2. Request for Registration.
(a) If the Company shall receive, at any time after the earlier
of (i) five years after the date hereof or (ii) nine months after the
closing of a Qualified Initial Public Offering (other than a
registration relating solely to any Company employee benefit plan), a
written request from the Holders (the "Initiating Holders") of at least
50% of the Registrable Securities then outstanding that the Company file
a registration statement under the Securities Act covering the
registration of all or part of the Registrable Securities then held by
such Initiating Holders (and covering at least 50% of the Registrable
Securities then outstanding) (a "Qualifying Request"), then the Company
shall, subject to Section 2(b) below:
(i) Promptly give written notice of the proposed
registration to all other Holders; and
(ii) As soon as practicable, use its reasonable diligent
efforts to effect such registration (including, without
limitation, filing post-effective amendments, appropriate
qualifications under applicable blue sky or other state
securities laws, and appropriate compliance with the Securities
Act) as would permit or facilitate the sale and distribution of
the portion of the Registrable Securities as are specified in
the Qualifying Request, together with the portion of the
Registrable Securities of any Holder or Holders joining in such
Qualifying Request as are specified in a written request made by
such Holder(s) and received by the Company within 20 days after
the written notice from the Company described in clause (i)
above is received by such Holder(s).
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(b) The Company shall not be obligated to effect, or to take
any action to effect, any registration pursuant to this Section 2 (i)
after the Company has initiated two such registrations pursuant to this
Section 2 (counting for these purposes only registrations which have
been declared or ordered effective and pursuant to which securities have
been sold), (ii) during any period starting 60 days prior to the
proposed filing date of a registration statement of the Company and
ending 180 days after the effective date of such registration statement
or (iii) if the Registrable Securities requested to be included in a
registration pursuant to this Section 2 may be registered on Form S-3
pursuant to Section 4 hereof.
(c) Subject to Section 2(b) above, the Company shall file a
registration statement covering the Registrable Securities requested to
be registered pursuant to Section 2(a) as soon as practicable after
receipt of the Qualifying Request; provided, however, that if (i) in the
good faith judgment of the Board of Directors of the Company, such
registration would be detrimental to the Company, and the Board of
Directors of the Company concludes, as a result, that it is essential to
defer the filing of such registration statement at such time, and (ii)
the Company shall furnish to the Initiating Holders a certificate signed
by a senior officer of the Company to such effect, then the Company
shall have the right to defer such filing for a period of not more than
120 days after receipt of the Qualifying Request; and, further provided
that the Company shall not defer its obligation in this manner more than
once in any twelve-month period.
(d) The registration statement filed pursuant to a Qualifying
Request may, subject to the provisions of Section 2(e) hereof, include
other securities of the Company with respect to which registration
rights have been granted, and may include securities of the Company
being sold for the account of the Company. Any securities to be
registered pursuant to a Qualifying Request shall be allocated in the
same manner as set forth in Section 9 hereof.
(e) If the Initiating Holders intend to distribute the
Registrable Securities covered by their Qualifying Request by means of
an underwriting, they shall so advise the Company as part of their
Qualifying Request made pursuant to Section 2(a), and the Company shall
include such information in its written notice referred to in Section
2(a)(i). In such event, the right of any Holder to registration pursuant
to this Section 2 shall be conditioned upon such Holder's participation
in such underwriting and the inclusion of such Holder's Registrable
Securities in the underwriting to the extent provided herein. If the
Company requests inclusion in any registration pursuant to this Section
2 of securities being sold for its own account, or if other Persons
shall request inclusion in any registration pursuant to this Section 2,
the Initiating Holders shall, on behalf of all Holders, offer to include
such securities in the underwriting and may condition such offer on the
Company's and such Persons' acceptance of the applicable provisions of
this Agreement. The Company shall (together with all Holders and other
Persons proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form
with the representative of the underwriter or underwriters selected for
such underwriting by a majority in interest of the Initiating Holders,
which underwriters must be reasonably acceptable to the Company.
Notwithstanding any other provision of this Section 2, if the
representative of the underwriters advises the Initiating Holders in
writing that marketing factors require a limitation on the number of
shares to be underwritten, then the number of shares sought to be
included by the Company and any Persons other than the Holders
requesting inclusion in such registration shall be reduced to the extent
required by the representative of the underwriters and the number of
shares of Registrable Securities to be included in such underwriting
shall not be reduced unless all such other securities are first entirely
excluded; thereafter, the number of shares to be included in the
underwriting or registration shall be allocated as set forth in Section
9 hereof. If a Person who has requested inclusion in such registration
as provided above does not agree to the terms of any such underwriting,
such Person shall be excluded therefrom by written notice from the
Company, the representative of the underwriters or the Initiating
Holders, and the securities so excluded shall also be withdrawn from
such registration. If shares are so withdrawn from the registration and
if the number of Registrable Securities to be included in such
registration was previously
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reduced as a result of marketing factors pursuant to this Section 2(e),
then the Company shall offer to all Holders who have retained rights to
include Registrable Securities in the registration the right to include
additional Registrable Securities (that were initially requested to be
included in such registration) in such registration in an aggregate
amount equal to the number of shares so withdrawn, with such shares to
be allocated among such Holders in accordance with Section 9.
3. Company Registration.
(a) Subject to Section 3(e) below, if at any time or times
after the date hereof the Company determines to register any of its
equity securities either for its own account or the account of a
security holder or holders exercising its or their demand registration
rights, the Company will:
(i) Promptly give to each Holder written notice thereof;
and
(ii) Use its reasonable diligent efforts to include in
such registration (and any related qualifications under
applicable blue sky or other state securities laws and other
compliance with the Securities Act), except as set forth in
Section 3(c) below, and in any underwriting involved therein,
all the Registrable Securities specified in a written request
made by any Holder and received by the Company within 20 days
after the written notice from the Company described in clause
(i) above is received by such Holder. Such written request may
specify all or a part of a Holder's Registrable Securities.
(b) If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company
shall so advise the Holders as a part of the written notice given
pursuant to Section 3(a)(i) above. In such event, the right of any
Holder to registration pursuant to this Section 3 shall be conditioned
upon such Holder's participation in such underwriting and the inclusion
of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall (together with the Company
and the other holders of securities of the Company that have exercised
their registration rights to participate therein and are distributing
their securities through such underwriting) enter into an underwriting
agreement in customary form with the representative of the underwriter
or underwriters selected by the Company.
(c) Notwithstanding any other provision of this Section 3, if
the representative of the underwriters advises the Company in writing
that marketing factors require a limitation on the number of shares to
be underwritten, the Company shall so advise all Holders of Registrable
Securities requesting registration, and the number of shares of
securities that are entitled to be included in the registration and
underwriting shall be allocated (i) first to the Company for securities
being sold for its own account and to security holders that have
exercised their demand registration rights with respect to such
registration, (ii) then to all other holders of equity securities of the
Company included in such registration on a pro rata basis. If any Person
does not agree to the terms of any such underwriting, such Person shall
be excluded therefrom by written notice from the Company or the
representative of the underwriters, and the securities so excluded shall
also be withdrawn from such registration.
(d) If shares are so withdrawn from the registration and if
the number of Registrable Securities to be included in such registration
was previously reduced as a result of marketing factors, the Company
shall then offer to all Holders who have retained the right to include
Registrable Securities in the registration the right to include
additional Registrable Securities (that were initially requested to be
included in such registration) in such registration in an aggregate
amount equal to the number of shares so withdrawn, with such shares to
be allocated in accordance with the first sentence of Section 3(c).
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(e) This Section 3 shall not apply to a registration on any
registration form that does not include substantially the same
information as would be required to be included in a registration
statement covering the sale of Registrable Securities or to
registrations relating solely to (i) any Company employee benefit plan
or (ii) transactions pursuant to Rule 145 or any other similar rule
promulgated under the Securities Act.
4. Registration on Form S-3.
(a) After the Company has qualified for the use of Form S-3,
in addition to the rights contained in the foregoing provisions of this
Agreement, the Holders of at least 50% of the Registrable Securities
then outstanding shall have the right to request registrations on Form
S-3 (such requests shall be in writing and shall state the number of
Registrable Securities to be sold by such Holders). As soon as
practicable after receiving any such request, the Company shall effect
such registration (including, without limitation, filing post-effective
amendments, appropriate qualifications under applicable blue sky or
other state securities laws, and appropriate compliance with the
Securities Act) as would permit or facilitate the sale and distribution
of the Registrable Securities requested to be included in such
registration; provided, however, that the Company shall not be obligated
to effect, or take any action to effect, any such registration if (i)
the Registrable Securities to be sold by the requesting Holders
constitute less than 50% of the Registrable Securities then outstanding;
(ii) Form S-3 is not then available for use in such offering; (iii) the
Company shall furnish to the requesting Holders the certification
described in Section 2(c) (but subject to the limitations set forth
therein); (iv) the Company shall have already completed two
registrations on Form S-3 during the prior 12 months (counting for this
purpose only registrations which have been declared or ordered
effective); (v) the sale of Registrable Securities in such offering
would occur in any jurisdiction in which the Company would be required
to qualify to do business (and in which it would not otherwise be
required to qualify but for the sale of such Registrable Securities) or
to file a general consent to service of process; or (vi) the sale of
Registrable Securities in such offering would occur during any period
starting on the effective date of any registration statement of the
Company (other than such Form S-3) and ending 180 days after the
effective date of such registration statement.
(b) Regardless of whether any Holder has completed the sale of
its Registrable Securities covered by a Form S-3, if, at any time after
the effective date of such Form S-3, the Company notifies such Holder
that such Form S-3 includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of
the circumstances then existing, then the Company may require such
Holder to cease such Holder's sales of Registrable Securities covered by
such Form S-3 until such time as the Company files an amendment to such
Form S-3 correcting such untrue statement or including such material
fact, which amendment shall be filed by the Company no later than 90
days after the date of the Company's notice given to such Holder under
this Section 4(b).
5. Obligations of the Company. Whenever required under this Agreement to
effect the registration of any Registrable Securities, the Company shall, as
soon as practicable:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its reasonable efforts to
cause such registration statement to become effective, and, upon the
request of the Holders of a majority of the Registrable Securities being
registered thereunder, keep such registration statement effective for up
to 90 days or until the Holders have completed the distribution referred
to in such registration statement, whichever occurs first; provided,
however, that before filing such registration statement or any amendment
thereto, the Company will furnish to the Holders of Registrable
Securities covered by such registration statement copies of all such
documents proposed to be filed.
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(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration
statement.
(c) Furnish to the Holders of Registrable Securities covered by
such registration statement such number of copies of such registration
statement and of each amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary
prospectus and any summary prospectus) and any prospectus filed under
Rule 424 under the Securities Act, in conformity with the requirements
of the Securities Act, and such other documents as Holders of
Registrable Securities covered by such registration statement may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.
(d) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual
and customary form, with the representative of the underwriters of such
offering.
(e) Notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.
(f) Notify each Holder of Registrable Securities covered by such
registration statement: (i) when the registration statement has become
effective; (ii) when any post-effective amendment to the registration
statement becomes effective; and (iii) of any request by the SEC for any
amendment or supplement to the registration statement or prospectus or
for additional information.
(g) Notify each Holder of Registrable Securities covered by such
registration statement if at any time the SEC should institute or
threaten to institute any proceedings for the purpose of issuing, or
should issue, a stop order suspending the effectiveness of such
registration statement. Upon the occurrence of any of the events
mentioned in the preceding sentence, the Company will use its reasonable
efforts to prevent the issuance of any such stop order or to obtain the
withdrawal thereof as soon as reasonably possible. The Company will
advise each Holder of Registrable Securities covered by such
registration statement promptly of any order or communication of any
public board or body addressed to the Company suspending or threatening
to suspend the qualification of any Registrable Securities for sale in
any jurisdiction.
(h) As soon as practicable after the effective date of such
registration statement, and in any event within 16 months thereafter,
have "made generally available to its security holders" (within the
meaning of Rule 158 under the Securities Act) an earnings statement
(which need not be audited) covering a period of at least 12 months
beginning after the effective date of such registration statement and
otherwise complying with Section 11(a) of the Securities Act.
6. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement with
respect to the Registrable Securities of any Holder that such Holder shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of such Registrable
Securities as shall be required to effect the registration of such Holder's
Registrable Securities.
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7. Expenses of Demand Registration. All expenses other than underwriting
discounts and commissions incurred in connection with registrations, filings or
qualifications pursuant to Section 2 or 4, including without limitation all
registration, filing and qualification fees, printers' and accounting fees and
fees and disbursements of counsel for the Company (including fees and
disbursements of counsel for the Company in its capacity as counsel to the
selling Holders of Registrable Securities hereunder; if Company counsel does not
make itself available for this purpose, the Company will pay the reasonable fees
and disbursements of one counsel for the selling Holders of Registrable
Securities on behalf of all selling shareholders at the time, such fees and
disbursements not to exceed $15,000) shall be borne by the Company; provided,
however, that with respect to registrations pursuant to Section 4, the Company
shall only be required to bear such expenses in connection with the first three
requests for registrations on Form S-3 (counting for this purpose any request
for registration which is withdrawn by the Holders, regardless of the reason for
such withdrawal, but not counting for this purpose any registration which is
withdrawn by the Company, regardless of the reason for such withdrawal).
8. Expenses of Company Registration. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 3, including
without limitation all registration, filing and qualification fees, printers'
and accounting fees and fees and disbursements of counsel for the Company
(including fees and disbursements of counsel for the Company in its capacity as
counsel to the selling Holders of Registrable Securities hereunder; if Company
counsel does not make itself available for this purpose, the Company will pay
the reasonable fees and disbursements of one counsel for the selling Holders of
Registrable Securities on behalf of all selling shareholders at the time, such
fees and disbursements not to exceed $15,000) shall be borne by the Company.
9. Allocation of Registration Opportunities. In any circumstance in
which all of the Registrable Securities requested to be included in a
registration on behalf of the Holders cannot be so included as a result of
limitations imposed by any underwriter or underwriters of the aggregate number
of Registrable Securities that may be so included, the number of Registrable
Securities that may be so included shall be allocated among the Holders
requesting inclusion pro rata on the basis of the number of Registrable
Securities that would be held by such Holders, assuming conversion; provided,
however, that if any Holder does not request inclusion of the minimum number of
shares of Registrable Securities allocated to such Holder pursuant to the
above-described procedure, the remaining portion of such Holder's allocation
shall be reallocated among those requesting Holders whose allocations did not
satisfy their requests, pro rata on the basis of the number of Registrable
Securities that would be held by such Holders, assuming conversion, and this
procedure shall be repeated until all of the Registrable Securities which may be
included in the registration on behalf of the requesting Holders have been so
allocated.
10. Indemnification. In the event any Registrable Securities are
included in a registration statement under this Agreement:
(a) The Company will indemnify and hold harmless each Holder and
each Holder's officers, directors and employees, any underwriter (as
defined in the Securities Act) for such Holder and each Person, if any,
who controls (within the meaning of the Securities Act or the Exchange
Act) such Holder or underwriter against any losses, claims, damages or
liabilities, whether or not involving a third party, to which they may
become subject under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon a Violation by the Company (provided, however, that the Company
will not be required to indemnify any of the foregoing Persons on
account of any losses, claims, damages or liabilities arising out of or
based upon a Violation by the Company if and to the extent that such
Violation was made in a preliminary prospectus and was corrected in a
subsequent prospectus that was required by law to be delivered to the
Person making the claim with respect to which indemnification is sought
hereunder (and
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such subsequent prospectus was made available by the Company to permit
delivery of such prospectus in a timely manner) and such subsequent
prospectus was not so delivered to such Person); and the Company will
pay to each indemnified party under this Section 10(a), as incurred, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this Section 10(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in
any such case to a particular indemnified party for any such loss,
claim, damage, liability or action to the extent that it arises out of
or is based upon a Violation by the Company which occurs in reliance
upon and in conformity with written information furnished by or on
behalf of such indemnified party expressly for use in connection with
any registration.
(b) Each selling Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who has signed the
registration statement, each Person, if any, who controls (within the
meaning of the Securities Act or the Exchange Act) the Company, any
underwriter (as defined in the Securities Act), any other Holder selling
securities covered by such registration statement and each Person, if
any, who controls (within the meaning of the Securities Act or the
Exchange Act) such underwriter or other Holder, against any losses,
claims, damages or liabilities, whether or not involving a third party,
to which any of the foregoing Persons may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon a Violation by the selling
Holder, in each case to the extent that such Violation by the selling
Holder occurs in reliance upon and in conformity with written
information furnished by or on behalf of the indemnifying Holder
expressly for use in connection with any registration; and each
indemnifying Holder will pay to each indemnified party under this
Section 10(b), as incurred, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this Section 10(b)
shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the
consent of the indemnifying Holder (which consent shall not be
unreasonably withheld); and further provided that in no event shall the
liability of any Holder under this Section 10(b) exceed the net proceeds
from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section
10, deliver to the indemnifying party a written notice of the
commencement of such action, and the indemnifying party shall have the
right to participate in and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to
assume the defense of such action with counsel reasonably satisfactory
to the indemnified party. The failure to deliver written notice to the
indemnifying party within a reasonable time after the commencement of
any such action shall not relieve such indemnifying party of any
liability to the indemnified party under this Section 10 except if, and
only to the extent that, the indemnifying party is actually prejudiced
thereby; and such failure to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 10.
(d) The obligations of the Company to any particular Holder and
of such Holder to the Company shall survive for a period of two (2)
years from the completion of any offering of Registrable Securities of
such Holder pursuant to the last registration statement under this
Agreement in which such Holder's Registrable Securities were included.
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(e) If for any reason the foregoing indemnity is unavailable,
then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such losses, claims,
damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and the indemnified
party as well as any other relevant equitable considerations. The
relative fault 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 or on behalf of the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement
or omission. 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 that was not guilty of fraudulent
misrepresentation. Notwithstanding anything to the contrary in this
Section 10, no Holder shall be required, pursuant to this Section 10, to
contribute any amount in excess of the net proceeds received by such
Holder from the sale of Registrable Securities in the offering to which
the losses, claims, damages, liabilities or expenses of the indemnified
party relate.
11. Termination. This Agreement will terminate as between the Company
and any particular Holder upon the earlier of (i) three (3) years after the
closing of a Qualified Initial Public Offering and (ii) such time when Rule
144(k) or another similar exception under the Securities Act is available for
the sale of all of such Holder's Registrable Securities; provided, however, that
the obligations of the Company and such Holder contained in Section 10 hereof
shall survive any such termination for a period of two (2) years from the
completion of any offering of Registrable Securities of such Holder pursuant to
the last registration statement under this Agreement in which such Holder's
Registrable Securities were included.
12. Assignment of Registration Rights. The rights to cause the Company
to register Registrable Securities pursuant to this Agreement may be assigned in
whole or in part by a Holder to one or more transferees or assignees of not less
than 50,000 shares of Registrable Securities owned by such Holder (as adjusted
for any stock splits, stock dividends, stock combinations or similar events);
provided that, in each case, as a condition to such transfer or assignment, the
Holder shall give prior written notice to the Company of such transfer or
assignment (which notice shall set forth the identity of the transferee or
assignee) and such transferee or assignee shall deliver to the Company a written
instrument by which such transferee or assignee agrees to be bound by the
obligations imposed on the transferring Holder under this Agreement, to the same
extent as if such transferee or assignee was a party hereto.
13. "Market Stand-Off" Agreement. Each Holder hereby agrees that, during
the period not to exceed 270 days following the effective date of a registration
statement of the Company filed under the Securities Act in connection with the
Company's Qualified Initial Public Offering, it shall not, to the extent
requested by the Company and the representative of the underwriters of such
Qualified Initial Public Offering, sell or otherwise transfer or dispose of
(other than to donees who agree to be similarly bound) any shares of Class A
Common Stock issuable upon conversion of the Series C Stock, except for shares
of Class A Common Stock included in such registration (if any), provided that
all officers and directors of the Company are similarly restricted.
14. Changes in Registrable Securities. If, and as often as, there are
any changes in the Registrable Securities by way of stock split, stock dividend,
combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions of this Agreement, as may be
required, so that the rights and privileges granted hereby shall continue with
respect to the Registrable Securities as so changed. Without limiting the
generality of the foregoing, the Company will require any successor by merger or
consolidation to assume and agree to be bound by the terms of this Agreement as
a condition to any such merger or consolidation.
9
15. Further Assurances. Each party hereto shall do and perform or cause
to be done and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments and documents as
any other party hereto reasonably may request in order to carry out the intent
and accomplish the purposes of this Agreement.
16. Amendment; Waiver. Any term, covenant, agreement or condition of
this Agreement may be amended, and compliance therewith may be waived (either
generally or in a particular circumstance and either retroactively or
prospectively), (i) as to the Company, by a written instrument signed by the
Company, and (ii) as to the Holders, by one or more written instruments signed
by the Holders that hold 51% or more of the Common Share Equivalents then held
by all Holders. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon the Holders and the Company. As used herein,
"Common Share Equivalents" means shares of Class A Common Stock at the time
outstanding as a result of conversion of Series C Stock and shares of Class A
Common Stock issuable upon conversion of shares of Series C Stock at the time
outstanding.
17. Binding Effect. This Agreement shall be binding on and inure to the
benefit of the parties hereto and their respective legal representatives,
successors and permitted assigns (as provided in Section 12 hereof). Nothing in
this Agreement, express or implied, is intended to confer upon any Person, other
than the parties hereto and their respective legal representatives, successors
and permitted assigns, any rights, remedies, obligations or liabilities under or
by reason of this Agreement, except as expressly provided herein.
18. Applicable Law. The laws of the state of New York shall govern the
interpretation, validity and performance of the terms of this Agreement.
19. Judicial Proceedings. Any judicial proceeding involving any dispute,
controversy or claim arising out of or relating to this Agreement or the rights
or interests of any of the parties hereto or the breach or alleged breach of
this Agreement, whether arising during, at or after the termination of this
Agreement (each of the foregoing disputes, controversies and claims hereinafter
referred to as an "Agreement Dispute"), shall be brought only in a federal or
state court located in the county, city and state of New York, and each of the
parties hereto (i) unconditionally accepts the exclusive jurisdiction of such
courts and any related appellate court and irrevocably agrees to be bound by any
judgment rendered thereby and (ii) irrevocably waives any objection such party
may now have or hereafter has as to the venue of any such proceeding brought in
such a court or that such court is an inconvenient forum. Each of the parties
hereto hereby waives trial by jury in any judicial proceeding to which they are
parties involving an Agreement Dispute.
10
20. Notices. All notices and other communications required or permitted
hereunder, shall be dated and in writing and shall be personally delivered,
mailed by registered or certified mail, postage prepaid, return receipt
requested, or otherwise delivered by a nationally-recognized overnight courier,
addressed to the address set forth below:
If to the Company:
XxxxxxxXxx.xxx, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
with a copy to:
XxxxxxxXxx.xxx, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
If to any Investor, to the address set forth next to its name on
any signature page attached hereto.
If to any Holder, to such Holder's address as set forth in the
books and records of the Company.
Any such notice or communication shall be deemed to have been
received (A) in the case of personal delivery, on the date of such
delivery, (B) in the case of a nationally-recognized overnight courier,
on the next business day after the date when sent, and (C) in the case
of mailing, on the third business day following that on which the piece
of mail containing such communication is posted.
21. Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to its subject matter and supersedes all prior
agreements and understandings between the parties with respect to its subject
matter.
22. Severability. 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 or invalid under applicable
law, such provision will be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of this Agreement.
23. Descriptive Headings. The section and other headings contained in
this Agreement are for convenience of reference only and shall not affect the
meaning or interpretation of this Agreement.
24. Neutral Construction. The parties to this Agreement agree that this
Agreement was negotiated fairly between them at arm's length and that the final
terms of this Agreement are the product of the parties' negotiations. Each party
represents and warrants that it has sought and received legal counsel of its own
choosing with regard to the content of this Agreement and the rights and
obligations affected hereby. The parties agree that this Agreement shall be
deemed to have been jointly and equally drafted by them, and that the provisions
of this Agreement therefore should not be construed against a party or parties
on the grounds that the party or parties drafted or was more responsible for
drafting the provision(s).
11
25. Counterparts. This Agreement may be executed in two or more
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPANY:
XXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx
Executive Vice President
INVESTORS:
Address: METROPOLITAN INTERNET PARTNERS I, LLC
-------
c/o Insignia Internet
Initiatives, Inc.
000 Xxxxxxxx Xxxxxx,
Xxxxx 000 By: MIP I, LLC, its Managing Member
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: President By: Insignia Internet Initiatives, Inc.,
its Managing Member
By: /s/ Xxxx Xxxxxxx
------------------------------------
Xxxx Xxxxxxx
President
Address: BLACKACRE CAPITAL MANAGEMENT, LLC
-------
Blackacre Capital
Management, LLC
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000 By: /s/Xxxxxx Xxxxxx
-----------------------------------
Attention: Xxxxxx Xxxxxx Xxxxxx Xxxxxx
Managing Director
