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FIFTH AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT (the
"Agreement"), dated as of August 29, 2001,
among EXCHANGE APPLICATIONS, INC., a
Delaware corporation (the "Corporation"),
and INVESTORS (as herein defined).
Insight and the Corporation are party to the Fourth Amended
and Restated Registration Rights Agreement, dated July 26, 2001 (the "Fourth
Amended and Restated Registration Rights Agreement").
Insight, the other Investors and the Corporation hereby desire
to amend and restate the Fourth Amended and Restated Registration Rights
Agreement as hereinafter set forth.
The Investors own or have the right to purchase or otherwise
acquire shares of the capital stock of the Corporation. The Corporation and the
Investors deem it to be in their respective best interests to set forth the
rights of the Investors in connection with public offerings and sales of the
Common Stock. To that end, the Corporation and the Investors hereby set forth
this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
covenants and obligations hereinafter set forth, the Corporation and the
Investors hereby agree as follows:
Section 1. Definitions.
As used in this Agreement, the following terms shall have the
following meanings:
(a) "Affiliate" means, with respect to any specified Person,
any other Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such specified Person. As used in this definition, the term "control"
(including, with correlative meaning, the terms "controlling," "controlled by"
and "under common control with") as used with respect to any Person, means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting Securities, by contract or otherwise.
(b) "April 16 Warrant" means the Warrant dated as of April 16,
2001, issued by the Corporation to Insight.
(c) "August 29 Warrants" means the warrants dated as of the
date hereof, issued by the Corporation to certain of the Investors.
(d) "Business Day" means any day that is not a Saturday,
Sunday, legal holiday or other day on which banks are required to be closed in
New York and Massachusetts.
(e) "Closing Date" means the date hereof.
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(f) "Commission" means the Securities and Exchange Commission
or any other Federal agency at the time administering the Securities Act.
(g) "Common Stock" means the common stock, $.001 par value per
share, of the Corporation.
(h) "Convertible Debentures" means, collectively, the (i) U.S.
$7,322,251.30 principal amount 12% Senior Subordinated Convertible Debenture,
plus any accrued and unpaid interest thereon, and (ii) U.S. $5,055,890.41
principal amount 12% Senior Subordinated Convertible Debenture, plus any accrued
and unpaid interest thereon, each of (i) and (ii) dated as of July 26, 2001,
issued by the Corporation and eXstatic to Insight, and (iii) U.S. $15,500,000
principal amount 12% Senior Subordinated Convertible Debentures, plus any
accrued and unpaid interest thereon, dated the date hereof, issued by the
Corporation and eXstatic to certain Investors.
(i) "Corporation" shall have the meaning ascribed to such term
in the Caption.
(j) "Counsel" shall have the meaning ascribed to such term in
Section 6(b).
(k) "Exchange Act" means the Securities Exchange Act of 1934
or any successor Federal statute, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect from time
to time.
(l) "eXstatic" means eXstatic Software, Inc., a Washington
corporation and wholly owned subsidiary of the Corporation.
(m) "Group" means:
(i) in the case of any Investor who is an individual, (i) such
Investor, (ii) the spouse, parent, sibling or descendants of such
Investor, (iii) all trusts for the benefit of such Investor, and (iv)
all Persons principally owned by and/or organized or operating for the
benefit of any of the foregoing and (v) all Affiliates of such
Investor;
(ii) in the case of any Investor that is a partnership, (i)
such Investor, (ii) its limited, special, venture and general partners,
(iii) any Person to which such Investor shall transfer all or
substantially all of its assets, and (iv) all Affiliates and employees
of and consultants to, such Investor or any of its Affiliates; and
(iii) in the case of any Investor which is a corporation or a
limited liability company, (i) such Investor, (ii) its Investors or
members as the case may be, (iii) any Person to which such Investor
shall Transfer all or substantially all of its assets, and (iv) all
Affiliates of such Investor.
(n) "Information" shall have the meaning ascribed to such term
in Section 6(i).
(o) "Insight" means, collectively, InSight Venture Partners,
IV, L.P., InSight Venture Partners (Cayman) IV, L.P., InSight Venture Partners
IV (Fund B), L.P. and InSight Venture Partners IV (Co-Investors), L.P., and
their respective Affiliates.
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(p) "Inspectors" shall have the meaning ascribed to such term
in Section 6(i).
(q) "Investors" means the Persons set forth on Schedule I and
each additional Person who shall execute a counterpart signature page hereto,
and, subject to Section 15 hereof, includes any successor to, or assignee or
transferee of, any such Person who or which agrees in writing to be treated as
an Investor hereunder and to be bound by the terms and comply with all
applicable provisions hereof.
(r) "New Insight Warrant" means the Warrant dated as of the
date hereof, issued by the Corporation to Insight.
(s) "Other Shares" means at any time those shares of Common
Stock which do not constitute Primary Shares or Registrable Shares.
(t) "Person" means any individual, partnership, corporation,
group, trust, limited liability company or other legal entity.
(u) "Primary Shares" means at any time the authorized but
unissued shares of Common Stock and shares of Common Stock held by the
Corporation in its treasury.
(v) "Records" shall have the meaning ascribed to such term in
Section 6(i).
(w) "Registrable Shares" means, with respect to any Investor,
(i) the shares of Common Stock held by such Investor, (ii) the shares of Common
Stock issuable upon conversion of the Convertible Debentures, (iii) the shares
of Common Stock issuable upon exercise of the April 16 Warrant, (iv) shares of
Common Stock issuable upon exercise of the New Insight Warrant, (v) shares of
Common Stock issuable upon exercise of the August 29 Warrants, (vi) the shares
of Common Stock issuable upon exercise of the Series A Preferred Stock, which
shares in each of (i), (ii), (iii), (iv), (v), and (vi) constitute Restricted
Shares.
(x) "Registration Statement" means any registration statement
of the Corporation which covers any of the Registrable Shares, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
(y) "Requisite Investors" means any two of the following three
Persons: (1) Insight, (2) THK Private Equities and (3) Boston Pipes.
(z) "Restricted Shares" means shares of Common Stock held by
the Investors issued or issuable upon conversion of the Convertible Debentures,
the Series A Preferred Stock or upon exercise of the Warrants which have not
been registered under the Securities Act. As to any particular Restricted
Shares, once issued, such Restricted Shares shall cease to be Restricted Shares
when (i) they have been registered under the Securities Act, the registration
statement in connection therewith has been declared effective and they have been
disposed of pursuant to such effective registration statement, (ii) such shares
are eligible to be sold or distributed pursuant to Rule 144 within any
consecutive three-month period (including, without limitation, Rule 144(k)), or
(iii) they shall have ceased to be outstanding.
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(aa) "Rule 144" means Rule 144 promulgated under the
Securities Act or any successor rule thereto or any complementary rule thereto
(such as Rule 144A).
(bb) "SEC" means the U.S. Securities and Exchange Commission.
(cc) "Securities Act" means the Securities Act of 1933 or any
successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
(dd) "Series A Preferred Stock" means the Series A Convertible
Redeemable Preferred Stock, $.001 par value per share, of the Corporation.
(ee) "Shelf Registration" shall have the meaning ascribed to
it in Section 4(b).
(ff) "Silicon Valley Shares" means collectively the shares of
Common Stock issuable upon exercise of the Warrant, dated (i) April 24, 2001,
and (ii) July 26, 2001, both (i) and (ii) issued by the Corporation to Silicon
Valley Bank.
(gg) "Warrants" means, collectively, the (i) April 16 Warrant,
(ii) the New Insight Warrant and (iii) the August 29 Warrants.
Section 2. Required Registration.
(a) From and after the Closing Date, if the Requisite
Investors shall in writing state that such holders desire to sell Registrable
Shares in the public securities markets and request the Corporation to effect
the registration under the Securities Act of Registrable Shares, the Corporation
shall promptly use commercially reasonable efforts to effect the registration
under the Securities Act of the Registrable Shares which the Corporation has
been so requested by the Requisite Investors to register.
(b) Anything contained in Section 2(a) to the contrary
notwithstanding, the Corporation shall not be obligated to effect any
registration under the Securities Act pursuant to Section 2(a) except in
accordance with the following provisions:
(i) The Corporation shall not be obligated to use commercially
reasonable efforts to file and cause to become effective (A) more than
two Registration Statements initiated pursuant to this Section 2(a);
provided, however, that if the Investors were unable to sell at least
90% of the Registrable Shares requested to be included in the last
registration initiated by such group of Investors pursuant to Section
2(a) as a result of an underwriter's cutback, then additional
registrations shall be added to this Section 2(b) until the foregoing
condition is satisfied for such initiating group of Investors, or (B)
any Registration Statement during any period in which any other
Registration Statement (other than on Form S-4 or Form S-8 promulgated
under the Securities Act or any successor forms thereto) pursuant to
which Primary Shares or Other Shares are to be or were sold has been
filed and not withdrawn or has been declared effective within the prior
90 days.
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(ii) The Corporation may delay the filing or effectiveness of
any Registration Statement for a period of up to 90 days after the date
of a request for registration pursuant to Section 2(a), if at the time
of such request (i) the Corporation is engaged, or has fixed plans to
engage within 90 days of the time of such request, in a firm commitment
underwritten public offering of Primary Shares in which the Investors
holding Registrable Shares may include such Registrable Shares pursuant
to Section 3 or (ii) the Corporation reasonably determines that such
registration and offering would interfere with any material transaction
involving the Corporation; provided, however, that the Corporation may
only delay the filing or effectiveness of a registration statement
pursuant to this Section 2(b) for a total of 90 days after the date of
a request for registration.
(iii) With respect to any registration pursuant to this
Section 2(a), the Corporation shall give notice of such registration to
the Investors who do not request registration hereunder and to the
holders of all Other Shares which are entitled to registration rights
and the Corporation may include in such registration any Primary Shares
or Other Shares; provided, however, that if the managing underwriter
advises the Corporation that the inclusion of all Registrable Shares,
Primary Shares and/or Other Shares proposed to be included in such
registration would interfere with the successful marketing (including
pricing) of the Registrable Shares proposed to be included in such
registration, then the number of Registrable Shares, Primary Shares
and/or Other Shares proposed to be included in such registration shall
be included in the following order:
(A) first, pro rata among (x) the Registrable Shares
requested by the Investors to be included in such registration
(or, if necessary, such Registrable Shares pro rata among the
holders thereof based upon the number of Registrable Shares
requested to be registered by each such Investor), (y) the
Other Shares (only to the extent required by an effective
Registration Rights Agreement entered into prior to March 28,
2001 between the Corporation and the holders of such Other
Shares) and (z) the Silicon Valley Shares;
(B) second, the Primary Shares; and;
(C) third, the Other Shares which are entitled to
registration rights.
(c) A requested registration under Section 2(a) may be
rescinded as to all of the Registrable Shares requested to be so registered
prior to such registration being declared effective by the Commission by written
notice from such Requisite Investors to the Corporation; provided, however, that
such rescinded registration shall not be deemed a Registration Statement
initiated pursuant to Section 2(a) for the purpose of Section 2(b)(i)(A) if the
Corporation shall have been reimbursed for all out-of-pocket expenses incurred
by the Corporation in connection with such rescinded registration.
Section 3. Piggyback Registration.
(a) From and after the Closing Date, if the Corporation at any
time proposes for any reason to register Primary Shares or Other Shares under
the Securities Act (other than on
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Form S-4 or Form S-8 promulgated under the Securities Act or any successor forms
thereto), it shall give written notice to the Investors of its intention to so
register such Primary Shares or Other Shares at least 30 days before the initial
filing of such Registration Statement and, upon the written request, delivered
to the Corporation within 20 days after delivery of any such notice by the
Corporation, of the Investors to include in such registration Registrable Shares
(which request shall specify the number of Registrable Shares proposed to be
included in such registration and shall state that the Investors desire to sell
such Registrable Shares in the public securities markets), the Corporation shall
use commercially reasonable efforts to cause all such Registrable Shares to be
included in such registration on the same terms and conditions as the securities
otherwise being sold in such registration; provided, however, that if the
managing underwriter advises the Corporation that the inclusion of all
Registrable Shares requested to be included in such registration would interfere
with the successful marketing (including pricing) of the Primary Shares or Other
Shares proposed to be registered by the Corporation, then the number of Primary
Shares, Registrable Shares and Other Shares) proposed to be included in such
registration shall be included in the following order:
(i) first, pro rata among (w) the Corporation and the holders
of Other Shares initiating such registration, as the case may be, (x)
Investors requesting their Registrable Shares be included in such
registration (or, if necessary, such Registrable Shares pro rata among
the holders thereof based upon the number of Registrable Shares
requested to be registered by each such holder), (y) the Other Shares
(only to the extent required by an effective Registration Rights
Agreement entered into prior to March 28, 2001 between the Corporation
and the holders of such Other Shares) and (z) the Silicon Valley
Shares; and
(ii) second, the Other Shares which are entitled to
registration rights and are held by holders who are not initiating such
registration under this Section 3.
(b) The number of requests permitted by the Investors pursuant
to this Section 3 shall be unlimited.
Section 4. Registrations on Form S-3 and Pursuant to Rule 415.
(a) Registration on Form S-3. Anything contained in Section 2
to the contrary notwithstanding, from and after the Closing Date, at such time
as the Corporation shall have qualified for the use of Form S-3 promulgated
under the Securities Act or any successor form thereto, each Investor holding
Registrable Shares then outstanding shall have the right to request in writing
that the Corporation effect the registration of Registrable Shares on Form S-3
or such successor form, which request or requests shall (i) specify the number
of Registrable Shares intended to be sold or disposed of and the holders thereof
and (ii) state the intended method of disposition of such Registrable Shares.
The Corporation shall use commercially reasonable efforts to promptly effect the
registration under the Securities Act of the Registrable Shares so requested to
be registered. A requested registration on Form S-3 or any such successor form
in compliance with this Section 4(a) shall not count as a registration statement
initiated pursuant to Section 2(a) for purposes of Section 2 (b)(i)(A) and,
except as otherwise expressly provided in this Section 4(a), shall otherwise be
subject to Section 2. The number of requests permitted by the Investors pursuant
to this Section 4(a) shall be unlimited; provided, however, that the
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Investors shall not be permitted to effect more than one registration pursuant
to this Section 4(a) during any 180-day period.
(b) Registration Pursuant to Rule 415.
(i) Anything contained in Section 2 to the contrary
notwithstanding, from and after the Closing Date, at such time as the
Corporation shall have qualified for use of a registration statement
filed pursuant to Rule 415 of the Securities Act or such successor
rule, the Requisite Investors shall have the right to request in
writing that the Corporation effect a continuous or delayed
registration of Registrable Shares on a registration statement filed
pursuant to Rule 415 of the Securities Act or such successor rule (a
"Shelf Registration"), which request shall (i) specify the number of
Registrable Shares intended to be sold or disposed of and the holders
thereof and (ii) state the intended method of disposition of such
Registrable Shares. The Corporation shall use commercially reasonable
efforts to promptly effect the registration under the Securities Act of
the Registrable Shares so requested to be registered and shall cause
such registration statement to become and remain effective for such
period as may be reasonably necessary to effect the sale of such
Registrable Securities, but in no event longer than 180 days. A
requested registration made pursuant to this Section 4(b) shall not
count as a registration statement initiated pursuant to Section 2(a)
for purposes of Section 2(b)(i)(A) and, except as otherwise provided on
this 4(b), shall otherwise be subject to Section 2. The number of
requests permitted by the Investors pursuant to this Section 4(b) shall
be one.
(ii) If and whenever the Corporation is required by the
provisions of this Section 4(b) to effect the registration of
Registrable Securities under Rule 415 of the Securities Act, the
Corporation will:
(A) prepare and file with the SEC such amendments to
such Shelf Registration and supplements to the prospectus
contained therein as may be necessary to keep such Shelf
Registration effective for such period as may be reasonably
necessary to effect the sale of such Registrable Securities,
but in no event longer than 180 days;
(B) prepare and promptly file with the SEC and
promptly notify the Investors of the filing of such amendment
or supplement to such Shelf Registration or prospectus as may
be necessary to correct any statements or omission if, at the
time when a prospectus relating to such Registrable Securities
is required to be delivered under the Securities Act, any
event shall have occurred as the result of which any such
prospectus or any other prospectus as then in effect would
include 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 in which they were
made, not misleading and promptly provide to the Investors
sufficient copies of such amended or supplemented prospectus
so that it can be delivered to the Investors of the
Registrable Securities as required by the Securities Act and
the regulations thereunder;
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(C) advise the Investors, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of
any stop order by the SEC suspending the effectiveness of such
Shelf Registration or the initiation or threatening of any
proceeding for that purpose, promptly use its commercially
reasonable efforts to prevent the issuance of any stop order
or to obtain its withdrawal if such stop order should be
issued and promptly notify the Investors of the forbearance,
lifting or withdrawal of such stop order or proceeding;
Section 5. Holdback Agreement.
If the Corporation at any time pursuant to Sections 2 or 3 of
this Agreement shall register under the Securities Act Registrable Shares held
by the Investors for sale to the public pursuant to an underwritten offering,
the Corporation shall not effect any public sale or distribution of securities
similar to those being registered, or any securities convertible into or
exercisable or exchangeable for such securities, for such period as shall be
determined by the Corporation and the managing underwriters, which period shall
not be less than 5 days.
Section 6. Preparation and Filing.
If and whenever the Corporation is under an obligation
pursuant to the provisions of this Agreement to effect the registration of any
Registrable Shares, the Corporation shall, as expeditiously as practicable:
(a) use commercially reasonable efforts to cause a
Registration Statement that registers such Registrable Shares to become and
remain effective for a period of 180 days or until all of such Registrable
Shares have been disposed of (if earlier);
(b) furnish, at least five Business Days before filing a
Registration Statement that registers such Registrable Shares, a prospectus
relating thereto or any amendments or supplements relating to such a
Registration Statement or prospectus, to one counsel selected by the Investors
("Counsel") copies of all such documents proposed to be filed (it being
understood that such five-Business Day period need not apply to amendments or
successive drafts of the same document proposed to be filed so long as such
amendments or successive drafts are supplied to Counsel in advance of the
proposed filing by a period of time that is customary and reasonable under the
circumstances);
(c) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective for
at least an additional period of 90 days or until all of such Registrable Shares
have been disposed of (if earlier) and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of such Registrable
Shares;
(d) promptly notify Counsel in writing (i) of the receipt by
the Corporation of any notification with respect to any comments by the
Commission with respect to such registration statement or prospectus or any
amendment or supplement thereto or any request by the Commission for the
amending or supplementing thereof or for additional information with respect
thereto, (ii) of the receipt by the Corporation of any notification with respect
to the
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issuance by the Commission of any stop order suspending the effectiveness of
such registration statement or prospectus or any amendment or supplement thereto
or the initiation or threatening of any proceeding for that purpose and (iii) of
the receipt by the Corporation of any notification with respect to the
suspension of the qualification of such Registrable Shares for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purposes;
(e) use its best efforts to register or qualify such
Registrable Shares under such other securities or blue sky laws of such
jurisdictions as the holders of the Registrable Shares reasonably request and do
any and all other acts and things which may be reasonably necessary or advisable
to enable such holders to consummate the disposition in such jurisdictions of
such holders' Registrable Shares; provided, however, that the Corporation will
not be required to qualify generally to do business, subject itself to general
taxation or consent to general service of process in any jurisdiction where it
would not otherwise be required to do so but for this paragraph (e);
(f) furnish to the holders of such Registrable Shares such
number of copies of a summary prospectus, if any, or other prospectus, including
a preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as such holders may reasonably request in order to
facilitate the public sale or other disposition of such Registrable Shares;
(g) without limiting subsection (e) above, use its best
efforts to cause such Registrable Shares to be registered with or approved by
such other governmental agencies or authorities of the United States as may be
necessary by virtue of the business and operations of the Corporation to enable
the holders of such Registrable Shares to consummate the disposition of such
Registrable Shares;
(h) notify the holders of such Registrable Shares on a timely
basis at any time when a prospectus relating to such Registrable Shares is
required to be delivered under the Securities Act within the appropriate period
mentioned in subparagraph (a) of this Section 6, 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 light of the circumstances then existing
and, at the request of such holders, prepare and furnish to such holders a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the offerees
of such shares, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing;
(i) make available upon reasonable notice and during normal
business hours, for inspection by any underwriter participating in any
disposition pursuant to such Registration Statement and any attorney, accountant
or other agent retained by the underwriter (the "Inspectors"), all pertinent
financial and other records, pertinent corporate documents and properties of the
Corporation (collectively, the "Records"), as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause the
Corporation's officers, directors and employees to supply all information
(together with the Records, the "Information")
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reasonably requested by any such Inspector in connection with such Registration
Statement. Any of the Information which the Corporation determines in good faith
to be confidential, and of which determination the Inspectors are so notified,
shall not be disclosed by the Inspectors unless (i) the disclosure of such
Information is necessary to avoid or correct a misstatement or omission in the
registration statement, (ii) the release of such Information is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction or (iii)
such Information has been made generally available to the public, and the
Investors agree that they will, upon learning that disclosure of such
Information is sought in a court of competent jurisdiction, give notice to the
Corporation and allow the Corporation, at the Corporation's expense, to
undertake appropriate action to prevent disclosure of the Information deemed
confidential;
(j) if required by the underwriters, use commercially
reasonable efforts to obtain from its independent certified public accountants
"cold comfort" letters in customary form and at customary times and covering
matters of the type customarily covered by cold comfort letters;
(k) if required by the underwriters, use commercially
reasonable efforts to obtain from its counsel an opinion or opinions in
customary form;
(l) provide a transfer agent and registrar (which may be the
same entity and which may be the Corporation) for such Registrable Shares;
(m) issue to any underwriter to which the holders of such
Registrable Shares may sell shares in such offering certificates evidencing such
Registrable Shares;
(n) use commercially reasonable efforts to qualify such
Registrable Shares for listing on the Nasdaq Stock Market or such other national
securities exchange on which the Corporation shall from time to time list its
securities;
(o) otherwise use commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission; and
(p) subject to all the other provisions of this Agreement, use
commercially reasonable efforts to take all other commercially reasonable steps
necessary to effect the registration of such Registrable Shares contemplated
hereby.
Each holder of the Registrable Shares upon receipt of any
notice from the Corporation of any event of the kind described in Section 6(h)
hereof, shall forthwith discontinue disposition of the Registrable Shares
pursuant to the registration statement covering such Registrable Shares until
such holder's receipt of the copies of the supplemented or amended prospectus
contemplated by Section 6(h) hereof, and, if so directed by the Corporation,
such holder shall deliver to the Corporation all copies, other than permanent
file copies then in such holder's possession, of the prospectus covering such
Registrable Shares at the time of receipt of such notice.
Section 7. Expenses.
All expenses incurred by the Corporation in complying with
Section 6, including, without limitation, all registration and filing fees
(including all expenses incident to filing with
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the National Association of Securities Dealers, Inc.), fees and expenses of
complying with securities and blue sky laws, printing expenses, fees and
expenses of the Corporation's counsel and accountants and reasonable fees and
expenses of Counsel shall be paid by the Corporation.
Section 8. Indemnification.
(a) In connection with any registration of any Registrable
Shares under the Securities Act pursuant to this Agreement, the Corporation
shall indemnify and hold harmless the holders of Registrable Shares, each
underwriter, broker or any other Person acting on behalf of the holders of
Registrable Shares, and each other Person, if any, who controls any of the
foregoing Persons within the meaning of the Securities Act against any losses,
claims, damages or liabilities, joint or several (or actions in respect
thereof), to which any of the foregoing Persons 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 an
untrue statement or allegedly untrue statement of a material fact contained in
the registration statement under which such Registrable Shares were registered
under the Securities Act, any preliminary prospectus or final prospectus
contained therein or otherwise filed with the Commission, any amendment or
supplement thereto or any document incident to registration or qualification of
any Registrable Shares, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading or, with respect to
any prospectus, necessary to make the statements therein in light of the
circumstances under which they were made not misleading, or any violation by the
Corporation of the Securities Act or state securities or blue sky laws
applicable to the Corporation and relating to action or inaction required of the
Corporation in connection with such registration or qualification under such
state securities or blue sky laws; and shall reimburse the holders of
Registrable Shares, such underwriter, such broker or such other Person acting on
behalf of the holders of Registrable Shares and each such controlling Person for
any legal or other expenses reasonably incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Corporation shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action
(including any legal or other expenses incurred) arises out of or is based upon
an untrue statement or allegedly untrue statement or omission or alleged
omission made in said registration statement, preliminary prospectus, final
prospectus, amendment, supplement or document incident to registration or
qualification of any Registrable Shares in reliance upon and in conformity with
written information furnished to the Corporation by the holders of Registrable
Shares or their counsel or underwriter specifically for use in the preparation
thereof; provided further, however, that the foregoing indemnity agreement is
subject to the condition that, insofar as it relates to any untrue statement,
allegedly untrue statement, omission or alleged omission made in any preliminary
prospectus but eliminated or remedied in the final prospectus (filed pursuant to
Rule 424 of the Securities Act), such indemnity agreement shall not inure to the
benefit of any Investor, underwriter, broker or other Person acting on behalf of
holders of the Restricted Shares, from whom the Person asserting any loss,
claim, damage, liability or expense purchased the Restricted Shares which are
the subject thereof, if a copy of such final prospectus had been made available
to such Person and such Investor, underwriter, broker or other Person acting on
behalf of holders of the Registrable Shares and such final prospectus was not
delivered to such Person with or prior to the written confirmation of the sale
of such Registrable Shares to such Person.
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(b) In connection with any registration of Registrable Shares
under the Securities Act pursuant to this Agreement, each holder of Registrable
Shares shall severally and not jointly indemnify and hold harmless (in the same
manner and to the same extent as set forth in the preceding paragraph of this
Section 8) the Corporation, each director of the Corporation, each officer of
the Corporation who shall sign such registration statement, each underwriter,
broker or other Person acting on behalf of the holders of Registrable Shares and
each Person who controls any of the foregoing Persons within the meaning of the
Securities Act with respect to any statement or omission from such registration
statement, any preliminary prospectus or final prospectus contained therein or
otherwise filed with the Commission, any amendment or supplement thereto or any
document incident to registration or qualification of any Registrable Shares if
such statement or omission was made in reliance upon and in conformity with
written information furnished to the Corporation or such underwriter by such
holder specifically for use in connection with the preparation of such
registration statement, preliminary prospectus, final prospectus, amendment,
supplement or document; provided, however, that the maximum amount of liability
in respect of such indemnification shall be limited, in the case of each seller
of Registrable Shares to an amount equal to the net proceeds actually received
by such seller from the sale of Registrable Shares effected pursuant to such
registration.
(c) Promptly after receipt by an indemnified party of notice
of the commencement of any action involving a claim referred to in the preceding
paragraphs of this Section 8, such indemnified party will, if a claim in respect
thereof is made against an indemnifying party, give written notice to the latter
of the commencement of such action. The failure of any indemnified party to
notify an indemnifying party of any such action shall not (unless such failure
shall have a material adverse effect on the indemnifying party) relieve the
indemnifying party from any liability in respect of such action that it may have
to such indemnified party on account of this Section 8. In case any such action
is brought against an indemnified party, the indemnifying party will be entitled
to participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be responsible for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof; provided, however, that if any indemnified
party shall have reasonably concluded that there may be one or more legal or
equitable defenses available to such indemnified party which are additional to
or conflict with those available to the indemnifying party, or that such claim
or litigation involves or could have an effect upon matters beyond the scope of
the indemnity agreement provided in this Section 8, the indemnifying party shall
not have the right to assume the defense of such action on behalf of such
indemnified party (but shall have the right to participate therein with counsel
of its choice) and such indemnifying party shall reimburse such indemnified
party and any Person controlling such indemnified party for that portion of the
fees and expenses of any counsel retained by the indemnified party which is
reasonably related to the matters covered by the indemnity agreement provided in
this Section 8; provided, however, that the maximum amount of liability in
respect of such indemnification shall be limited, in the case of each seller of
Registrable Shares to an amount equal to the net proceeds actually received by
such seller from the sale of Registrable Shares effected pursuant to such
registration. If the indemnifying party is not entitled to, or elects not to,
assume the defense of a claim, it will not be obligated to pay the fees and
expenses of more than one counsel with respect to such claim.
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(d) If the indemnification provided for in this Section 8 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, claim, damage, liability or action referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amounts paid or payable by such
indemnified party as a result of such loss, claim, damage, liability or action
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions which resulted in such loss, claim,
damage, liability or action as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party 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 indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties agree that it would not be just
and equitable if contribution pursuant hereto were determined by pro rata
allocation or by any other method or allocation which does not take account of
the equitable considerations referred to herein. No Person guilty of fraudulent
misrepresentation shall be entitled to contribution from any Person.
Section 9. Underwriting Agreement.
Notwithstanding the provisions of Sections 5, 6, 7 and 8, to
the extent that the Investors shall enter into an underwriting or similar
agreement, which agreement contains provisions covering one or more issues
addressed in such Sections, the provisions contained in such agreement
addressing such issue or issues shall control; provided, however, that any such
agreement to which the Corporation is not a party shall not be binding upon the
Corporation. No holder may participate in any underwritten registration
hereunder unless such holder (a) agrees to sell such holder's securities on the
basis provided in any underwriting arrangements and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably and customarily required under the terms of such
underwriting arrangements.
Section 10. Information.
Each Investor shall furnish to the Corporation such written
information regarding such Person and the distribution proposed by such Person
as the Corporation may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Agreement.
Section 11. Exchange Act Compliance.
The Corporation shall use commercially reasonable efforts to
comply with all of the reporting requirements of the Exchange Act applicable to
it (whether or not it shall be required to do so) and to comply with all other
public information reporting requirements of the Commission which are conditions
to the availability of Rule 144 for the sale of the Common Stock. The
Corporation shall cooperate with the Investors supplying such information as may
be necessary for the Investors to complete and file any information reporting
forms presently or hereafter required by the Commission as a condition to the
availability of Rule 144.
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Section 12. No Conflict of Rights.
The Corporation shall not, after the date hereof, grant any
registration rights which conflict with or impair the registration rights
granted hereby.
Section 13. Termination.
This Agreement shall terminate and be of no further force or
effect when there shall no longer be any Registrable Shares outstanding.
Section 14. Successors and Assigns.
This Agreement shall bind and inure to the benefit of the
Corporation and the Investors and, subject to Section 15, the respective
successors and assigns of the Corporation and the Investors.
Section 15. Assignment.
(a) Each Investor may assign its rights hereunder to (i) a
member of the Group of such Investor without the consent of the Corporation or
(ii) any other purchaser or transferee from such Investor of Restricted Shares
with the consent of the Corporation; provided, that any such assignment is in
connection with the assignment of at least 1,000,000 Registrable Shares;
provided, further, however, that any such purchaser or transferee shall, as a
condition to the effectiveness of such assignment, be required to execute a
counterpart to this Agreement agreeing to be treated as an Investor, whereupon
such purchaser or transferee shall have the benefits of, and shall be subject to
the restrictions contained in, this Agreement as if such purchaser or transferee
had originally been a party hereto and was originally included in the definition
of an Investor herein.
Section 16. Entire Agreement.
This Agreement and the other writings referred to herein or
therein or delivered pursuant hereto or thereto, contain the entire agreement
among the Investors and the Corporation with respect to the subject matter
hereof and supersede all prior and contemporaneous arrangements or
understandings with respect thereto, including, without limitation, the Fourth
Amended and Restated Registration Rights Agreement, all of which are hereby
automatically terminated in their entirety and of no further force or effect,
without any action by the parties thereto.
Section 17. Notices.
All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by telecopy,
nationally-recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be designated in
writing by such party to the other parties:
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(i) if to the Corporation, to:
Exchange Applications, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(ii) if to the Investors, to:
InSight Venture Partners
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
X'Xxxxxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxx X. Nissan, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Boston Pipes, LLC
0000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
with a copy to:
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Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
THK Private Equities
x/x Xxxxxxxx X. Xxxxxxxxxxxx
0000 Xx. Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Xxxxxx Xxxxxxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
(000) 000-0000
SKP Investments
Xxxxxx Family Foundation
000 Xxx Xxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
(000) 000-0000
All such notices, requests, consents and other communications shall be deemed to
have been delivered (a) in the case of personal delivery or delivery by
telecopy, on the date of such delivery, (b) in the case of dispatch by
nationally-recognized overnight courier, on the next Business Day following such
dispatch and (c) in the case of mailing, on the third Business Day after the
posting thereof.
Section 18. Modifications; Amendments; Waivers.
The terms and provisions of this Agreement may not be modified
or amended, nor may any provision be waived, except pursuant to a writing
signed, in the case of a modification or amendment, by the Corporation and the
Investors holding at least a majority of the outstanding Registrable Shares at
such time, or in the case of a waiver, by the party against whom the waiver is
to be effective; provided, however, that any proposed modification, amendment or
waiver that uniquely and adversely affects an Investor shall require such
Investor's prior written approval.
Section 19. Counterparts.
This Agreement may be executed in any number of original or
facsimile counterparts, and each such counterpart hereof shall be deemed to be
an original instrument, but all such counterparts together shall constitute but
one agreement.
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Section 20. Headings.
The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be a
part of this Agreement.
Section 21. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly therein.
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IN WITNESS WHEREOF, the parties hereto have executed this
Fifth Amended and Restated Registration Rights Agreement on the date first
written above.
CORPORATION:
EXCHANGE APPLICATIONS, INC.
By: /s/ F. Xxxxxx Xxxxx
-----------------------------------------
Name: F. Xxxxxx Xxxxx
Title: Chief Financial Officer
19
INVESTORS:
INSIGHT VENTURE PARTNERS IV, L.P.
INSIGHT VENTURE PARTNERS (CAYMAN) IV, L.P.
INSIGHT VENTURE PARTNERS IV (FUND B), L.P.
INSIGHT VENTURE PARTNERS IV (CO-INVESTORS), L.P.
By: Insight Venture Associates IV, L.L.C.,
the general partner to each of the above-referenced
entities:
By: /s/ Xxxxx Xxxxxx
--------------------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
20
IN WITNESS WHEREOF, each of the undersigned has duly executed
this Fifth Amended and Restated Registration Rights Agreement as of the date
first written above.
SKP INVESTMENTS LLC
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------------------
Name: Xxxxxx Xxxxxxx
Title:
21
] IN WITNESS WHEREOF, each of the undersigned has duly executed
this Fifth Amended and Restated Registration Rights Agreement as of the date
first written above.
THK PRIVATE EQUITIES
By: /s/ Xxxxxxxx X. Xxxxxxxxxxxx
-------------------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxxxxx
Title: Principal
22
IN WITNESS WHEREOF, each of the undersigned has duly executed
this Fifth Amended and Restated Registration Rights Agreement as of the date
first written above.
XXXXXX FAMILY FOUNDATION
By: /s/ Xxxx Xxxxxx
-------------------------------------------------
Name: Xxxx Xxxxxx
Title: Trustee
23
IN WITNESS WHEREOF, each of the undersigned has duly executed
this Fifth Amended and Restated Registration Rights Agreement as of the date
first written above.
BOSTON PIPES, LLC
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------------------------
Name:
Title:
24
IN WITNESS WHEREOF, each of the undersigned has duly executed
this Fifth Amended and Restated Registration Rights Agreement as of the date
first written above.
/s/ Xxxxx Xxxxxxxx
---------------------------------------------------
XXXXX XXXXXXXX
25
SCHEDULE 1
Investors
InSight Venture Partners IV, L.P.
InSight Venture Partners (Cayman) IV, L.P.
InSight Venture Partners IV (Fund B), L.P.
InSight Venture Partners IV (Co-Investors), L.P.
SKP Investments LLC
THK Private Equities
Xxxxxx Family Trust
Boston Pipes, LLC
Xxxxxx Xxxxxxxx
26
TABLE OF CONTENTS
Page
Section 1. Definitions.................................................. 1
Section 2. Required Registration........................................ 4
Section 3. Piggyback Registration....................................... 5
Section 4. Registrations on Form S-3 and Pursuant to Rule 415........... 6
Section 5. Holdback Agreement........................................... 8
Section 6. Preparation and Filing....................................... 8
Section 7. Expenses.................................................... 10
Section 8. Indemnification............................................. 11
Section 9. Underwriting Agreement...................................... 13
Section 10. Information................................................. 13
Section 11. Exchange Act Compliance..................................... 13
Section 12. No Conflict of Rights....................................... 14
Section 13. Termination................................................. 14
Section 14. Successors and Assigns...................................... 14
Section 15. Assignment.................................................. 14
Section 16. Entire Agreement............................................ 14
Section 17. Notices..................................................... 14
Section 18. Modifications; Amendments; Waivers.......................... 16
Section 19. Counterparts................................................ 16
Section 20. Headings.................................................... 17
Section 21. Governing Law............................................... 17
i
27
FIFTH AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
DATED AS OF AUGUST 29, 2001,
AMONG
EXCHANGE APPLICATIONS, INC.
AND
THE
INVESTORS
IDENTIFIED HEREIN
