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EXHIBIT 4.1
SECOND AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
This Second Amended and Restated Registration Rights Agreement is made
as of September 21, 1999, by and among Virage, Inc., a Delaware corporation
("Company"), each of the persons listed on the Schedule of Purchasers attached
hereto ("Purchasers") and each of the persons listed on the Schedule of Existing
Shareholders attached hereto ("Existing Shareholders").
RECITALS:
A. The Company, various of the Purchasers and various of the Existing
Shareholders have previously entered into the Amended and Restated Registration
Rights Agreement dated January 27, 1999.
B. The Company, the Purchasers and the Existing Shareholders desire to
amend and restate the Amended and Restated Registration Rights Agreement dated
January 27, 1999 in its entirety as set forth herein.
C. Concurrently with the execution of this Agreement, the Purchasers are
purchasing shares of Series E Preferred Stock ("Series E Preferred") of the
Company and the Company is entering into this Second Amended and Restated
Registration Rights Agreement in consideration of such purchase.
1. Definitions. As used in this Agreement, the following terms shall
have the following respective meanings:
(a) "Investor" shall mean any holder of Underlying Common Stock,
but only if such holder is a Purchaser or a transferee of registration rights
from an Investor as permitted under Section 11. An Investor shall include a
registered owner of all or any portion of the Series A Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Series E Preferred to the
extent of the shares of Common Stock remaining issuable upon conversion thereof.
(b) "Underlying Common Stock" shall mean (i) the shares of Common
Stock issued upon conversion of the Series A, Series B, Series C, Series D and
Series E Preferred and (ii) the shares of Common Stock remaining issuable upon
conversion of the outstanding Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred and Series E Preferred, together with all shares
of Common Stock and other securities issued or issuable in respect of the Common
Stock referred to in clauses (i) and (ii) by reason of stock splits, stock
dividends, combinations, mergers, exchanges or other reclassifications or
recapitalizations, provided that the term "Underlying Common Stock" shall
exclude all shares of Common Stock sold by an Investor in an offering registered
under the Securities Act or Rule 144 thereunder.
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(c) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Securities and Exchange Commission thereunder.
(d) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar federal statute, and the rules and regulations
of the Securities and Exchange Commission thereunder.
(e) "Holder" shall mean the Investors and the Existing
Shareholders.
(f) "Registrable Stock" shall mean the Underlying Common Stock
and Common Stock held by, or issuable upon, exercise, conversion or exchange of
options, warrants or convertible or exchangeable securities held by, the
Existing Shareholders, provided that the term "Registrable Stock" shall exclude
all shares of Common Stock sold by an Existing Shareholder in an offering
registered under the Securities Act or Rule 144 thereunder.
(g) "Purchaser" shall mean a purchaser of the Series E Preferred
and their permitted transferees.
(h) "Series A Preferred" shall mean Preferred Stock, no par
value, of the Company and designated as Series A Preferred Stock.
(i) "Series B Preferred" shall mean Preferred Stock, no par
value, of the Company and designated as Series B Preferred Stock.
(j) "Series C Preferred" shall mean Preferred Stock, no par
value, of the Company and designated as Series C Preferred Stock.
(k) "Series D Preferred" shall mean Preferred Stock, no par
value, of the Company and designated as Series D Preferred Stock.
(l) "Series E Preferred" shall mean Preferred Stock, no par
value, of the Company and designated as Series E Preferred Stock.
2. Demand Registration
(a) Exercise of Right. If at any time after the earlier of the
Company's initial registered public offering or the second anniversary of the
closing of the initial sale and issuance of the Series E Preferred (the "Series
E Closing") and prior to the tenth anniversary of the Series E Closing (but not
within three months of the effective date of a Registration Statement other than
on Form S-4 or S-8 or an equivalent successor form), the Company receives a
request from Investors of at least 50% of the Underlying Common Stock or at
least 50% of the Series E Preferred ("Initiating Investors") for the
registration of at least 25% of the Underlying Common Stock held by the
Initiating Investors (or any lesser percentage if the anticipated aggregate
offering price, net of underwriting discounts and commissions, is more than
$2,000,000), the Company will prepare and file with the Securities and Exchange
Commission a Registration Statement with respect to a public offering of the
Underlying Common Stock which the Investors making such request desire to
include in a public offering. In the event that a request for
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registration is made by less than all of the Investors, the Company will notify
within ten (10) days after receipt thereof all other Investors of such request
and any other Investor must notify the Company within thirty (30) days after
such notice from the Company if it wishes to join in the request. The Company
shall cause a Registration Statement to be filed as soon as practicable but in
no event later than ninety (90) days after receipt of the initial request for
registration, provided that the Company may defer the filing of a Registration
Statement for up to ninety (90) days after the request for registration is made
if the Board of Directors of the Company determines in good faith that it would
be seriously detrimental to the Company to file the Registration Statement
without such deferral; provided, however, that the Company may not utilize this
right more than once in any twelve (12) month period. The Company shall use its
best efforts to cause such Registration Statement to become effective as
promptly as practicable and to remain effective for at least one hundred eighty
(180) days.
(b) Underwriting. If the Initiating Investors intend to
distribute the Underlying Common Stock covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to subsection (a) and the Company shall include such information in its
written notice to the other Investors. The right of any Investor to registration
pursuant to this Section shall be conditioned upon such Investor's participation
in such underwriting and the inclusion of such Investor's Underlying Common
Stock in the underwriting (unless otherwise mutually agreed by a majority in
interest of the Initiating Investors, the managing underwriter and such
Investor) to the extent provided herein. The Company shall (together with all
Investors proposing to distribute their Underlying Common Stock) enter into an
underwriting agreement in customary form with the managing underwriter selected
for such underwriting by a majority in interest of the Initiating Investors.
(c) Marketing Limitations. Notwithstanding any other provision of
this Section if the managing underwriter advises the Initiating Investors in
writing that marketing factors require a limitation of the number of shares to
be underwritten, then the Initiating Investors shall so advise all Investors
holding Underlying Common Stock and the number of shares of Underlying Common
Stock that may be included in the registration and underwriting shall be
allocated among all Investors desiring to participate in such registration in
proportion, as nearly as practicable, to the respective shares of Underlying
Common Stock held by such Investors at the time of filing the Registration
Statement and no securities held by any person other than an Investor shall be
included therein. No Underlying Common Stock or other securities excluded from
the underwriting by reason of the underwriter's marketing limitation shall be
included in such registration. Except with the consent of the Investors who own
at least the 67% of the Underlying Common Stock to be included in the
registration, the Company shall not include securities for its own account or
for the account of any person (other than the shares of Common Stock held by the
Investors that are included in the registration in accordance with the provision
of this Section 2) in any registration undertaken pursuant to this subsection
and neither the Company nor any person or Investor whose shares were not
included in the registration shall sell any such securities in a public offering
until at least one hundred eighty (180) days following the effective date of the
registration or, for such other period as may be determined by Investors of at
least 67% of the Underlying Common Stock.
(d) Withdrawal. Any Investor may, at any time prior to the
effectiveness of a Registration Statement, withdraw its Underlying Common Stock
therefrom. The Company shall
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be obligated to register Underlying Common Stock pursuant to this Section 2 on
only two occasions; provided that if prior to the effectiveness of a
Registration Statement, the number of Investors participating or the number of
shares of Underlying Common Stock included would not be sufficient to initiate a
registration pursuant to this Section 2, the Company may withdraw its
Registration Statement and, unless such insufficiency resulted from shares of
Underlying Common Stock being withdrawn as a result of a material adverse event
or circumstance relating to the Company which was not known to the Initiating
Investors at the time of their request for registration, the Company will be
deemed to have satisfied one of its obligations to register Underlying Common
Stock under this Section 2.
3. Piggyback Registration.
(a) Right to Join in Registration. If at any time prior to the
expiration of ten (10) years following the date of the Series E Closing the
Company proposes to file a Registration Statement under the Securities Act
seeking registration of any securities of the Company for sale for cash to the
public either for its own account or for the account of any holder of securities
of the Company, the Company shall notify, in writing, each Holder of its
intention to file such Registration Statement and in addition to, and
independent of, the rights afforded by Section 2, will afford each Holder the
opportunity to request inclusion in such Registration Statement of all or any
part of its Registrable Stock. If any Holder desires to join in such
Registration Statement, it shall, within thirty (30) days after the date of
mailing such notice by the Company, notify the Company, in writing, of the
number of shares of Registrable Stock it desires to include in any such
Registration Statement. If a Holder requests inclusion of any Registrable Stock
in such Registration Statement and if such public offering is to be
underwritten, the Company will cause the underwriters of the offering to
purchase and sell such Registrable Stock. The right of any Holder to
registration pursuant to this Section shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Stock in the underwriting unless otherwise agreed to by the Company.
(b) Marketing Limitation. If the managing underwriter determines
that marketing factors require a limitation of the number of shares to be
underwritten, the Company shall so advise the Holders and the other persons
distributing their securities through such underwriting, and (i) Common Stock
held (or issuable upon conversion or exercise of securities held) by any person
who does not have contractual rights of registration shall first be excluded,
(ii) if such exclusion is not sufficient, Common Stock held (or issuable upon
conversion or exercise of securities held) by the Existing Shareholders and any
person, other than Holders, who are not excluded under clause (i) above shall be
excluded, and (iii) if such exclusion is not sufficient, shares of Underlying
Common Stock held by the Investors shall be excluded to the extent required to
permit the number of shares of Underlying Common Stock that may be included in
the registration and underwriting to be allocated among all such Investors and
other persons in proportion, as nearly as practicable, to the number of shares
of Underlying Common Stock held by all such Investors at the time of filing the
Registration Statement, provided that (i) no such inclusion of Registrable Stock
or Common Stock by the underwriter may reduce the securities being offered by
the Company for its own account in the first such underwriting and may not
reduce such securities being offered by the Company for its own account by more
than twenty percent (20%) in any subsequent underwriting, and (ii) except as
provided above with respect to Existing Shareholders, no securities held by an
employee (or former employee) of the
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Company may be included in the registration without the prior written consent of
Investors holding at least 67% of the Underlying Common Stock held by the
Investors and to be included in the registration. No Common Stock, Registrable
Stock or other securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration.
Holders who hold securities of the Company which were not included in the
registration shall not sell such securities in a public offering until at least
one hundred eighty (180) days following the effective date of the registration,
or for such other shorter period as may be determined by the Company and
Investors holding at least 67% of the Underlying Common Stock held by all
Investors.
(c) Withdrawal. The Company may decline to file a Registration
Statement after notice to each Holder, or withdraw a Registration Statement
after filing and after such notice, but prior to the effectiveness thereof,
provided that it shall promptly notify each Holder, in writing, of any such
action. Any Holder may, at any time prior to the effectiveness of a Registration
Statement filed pursuant to this Section 3, withdraw its Registrable Stock
therefrom. The fact that any Registrable Stock has been the subject of a request
for registration pursuant to this Section 3 shall not prevent such Common Stock
from being the subject of future requests for registration pursuant to this
Section 3 or Sections 2 or 4 if such Registrable Stock was not sold in a public
offering pursuant to the Registration Statement with respect to which the prior
request was made.
4. Form S-3 Registration. The Company will use its best efforts to
qualify for registration on Form S-3 (references to Form S-3 to include any
substantially equivalent successor form) and to that end, the Company shall
register (whether or not required by law to do so) its Common Stock under the
Exchange Act within twelve (12) months following the effective date of the first
registration of any securities of the Company, provided that securities have
been sold to the public pursuant to such registration. After the Company has
qualified for the use of Form S-3, the Investors holding Underlying Common Stock
shall have the right to request an unlimited number of registrations on Form S-3
under this Section 4 (each such request shall be in writing and shall state the
number of the shares of Underlying Common Stock to be disposed of and the
intended method of disposition of such shares by such Investor or Investors),
provided that the Company shall not be required to effect more than two
registrations pursuant to this Section 4 in any twelve-month period, and shall
not be required to effect a registration unless the Investors requesting
registration propose to dispose of shares of Underlying Common Stock that they
reasonably anticipate will have an aggregate disposition price (before deduction
of underwriting discounts and expenses of sale) of at least $750,000. The
Company shall give notice to all Investors of the receipt of a request for
registration pursuant to this Section 4 and shall provide a reasonable
opportunity for other Investors to participate in the registration. Subject to
the foregoing, the Company shall use its best efforts to effect promptly the
registration of all shares of Underlying Common Stock on Form S-3, to the extent
requested by the Investors.
5. State Qualification. In connection with any registration of
Registrable Stock pursuant to Sections 2, 3 or 4 or the sale of Registrable
Stock pursuant to Rule 144 under the Securities Act, the Company will use its
best efforts to qualify the offering under such state securities laws as the
Holders requesting registration shall reasonably request or to otherwise satisfy
the requirements of such state securities laws.
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6. Expenses of Registration. In connection with any Registration
Statements prepared and filed in accordance with Sections 2, 3 or 4, the Company
will bear the entire expense of the (i) preparation and filing of such
Registration Statement, (ii) furnishing of such number of copies of the
prospectus included therein as may be reasonably required in connection with the
offering, (iii) qualification of such offering under such state securities laws
as the Holders requesting registration shall request, (iv) the fees and expenses
of counsel for the Company and the fees and expenses of one counsel for the
Holders. The Holders shall pay all selling expenses attributable to their
Registrable Stock that is included in the Registration Statement, including
underwriting commissions and discounts.
7. Legal Opinion; Accountant's Letter. The Company shall furnish to each
Holder of Registrable Stock included in a Registration Statement a signed
counterpart, addressed to each such Holder and their underwriters, if any, of:
(i) an opinion of counsel for the Company, dated the
effective date of the Registration Statement; and
(ii) a "comfort" letter signed by the independent public
accountants who have certified the Company's financial statements included in
the Registration Statement; covering substantially the same matters with respect
to the Registration Statement (and the prospectus included therein) and (in the
case of the accountants' letter) with respect to the events subsequent to the
date of the financial statements, as are customarily covered (at the time of
such registration) in opinions of issuer's counsel and in accountants' letters
delivered to underwriters in connection with underwritten public offerings of
securities.
8. Indemnification.
(a) Indemnification by Company. In the event of any registration
of any of its securities under the Securities Act pursuant to this Agreement,
the Company shall indemnify and hold harmless each Holder requesting or joining
in a registration of such securities, each of its officers, directors and
partners and such Holder's legal counsel and accountants, each underwriter (as
defined in the Securities Act) and each controlling person of each of the
foregoing, if any, (within the meaning of the Securities Act or Exchange Act)
against any losses, claims, damages or liabilities, joint or several (or actions
in respect thereof), including any of the foregoing incurred in the settlement
of any litigation, commenced or threatened, to which any of them may be subject
under the Securities Act or Exchange Act or any other statute or at common law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (A) any untrue statement (or alleged
untrue statement) of any material fact contained in any offering circular or
Registration Statement under which such securities were registered under the
Securities Act, any preliminary prospectus or final prospectus contained
therein, or any summary prospectus issued in connection with any securities
being registered, or any amendment or supplement thereto, or any other document,
or (B) any 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 (C) any violation by the Company of the Securities Act or any
Blue Sky law or any other statute or common law, or any rule or regulation
promulgated under the Securities Act or Exchange Act or any Blue Sky law or any
other law, applicable to the Company in connection with any such registration,
qualification or compliance, and shall
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reimburse each such person entitled to indemnification under this subsection (a)
for any legal or other expenses reasonably incurred by such person in connection
with investigating or defending any such loss, claim, damage, liability or
action including if requested by Holders holding a majority of the Registrable
Stock included in the registration, the fees and disbursements of separate
counsel designated by Holders holding a majority of such Registrable Stock;
provided, however, that the Company shall not be liable to any such person in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any untrue statement (or alleged untrue statement
unless it is ultimately determined that such alleged untrue statement is not
actionable) or omission (or alleged omission unless it is ultimately determined
that such alleged omission is not actionable) made in such offering circular,
Registration Statement, preliminary prospectus, summary prospectus, prospectus,
or amendment or supplement thereto, or any other document, in reliance upon and
in conformity with written information furnished to the Company by such person,
specifically for use therein. The indemnity provided for herein shall remain in
full force and effect regardless of any investigation made by or on behalf of
the person seeking indemnification and shall survive transfer of such securities
by such Holder.
(b) Indemnification by Holders. The Company may require as a
condition to having the Registrable Stock included among the securities as to
which such registration is being effected that each Holder requesting or joining
in a registration agree (severally and not jointly) to indemnify the Company,
its directors and officers and its legal counsel and accountants, each
underwriter (as defined in the Securities Act), each controlling person of each
of the foregoing and each other such Holder, each of its officers, directors and
partners and each controlling person of such Holder, against any losses, claims,
damages or liabilities (or actions in respect thereof), including any of the
foregoing incurred in the settlement of any litigation, commenced or threatened,
joint or several, to which any of them may become subject under the Securities
Act or Exchange Act or under any other statute or at common law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement (or alleged untrue statement) of any
material fact contained in any offering circular or Registration Statement under
which such securities were registered under the Securities Act at the request of
such Holder pursuant to this Agreement, any preliminary prospectus or final
prospectus contained therein, or any summary prospectus issued in connection
with any securities being registered, or any amendment or supplement thereto, or
any omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, in
each case to the extent that such untrue statement (or alleged untrue statement)
or omission (or alleged omission) was made in such Registration Statement,
preliminary prospectus, summary prospectus, prospectus or amendment or
supplement thereto, solely in reliance upon and in conformity with written
information furnished to the Company by such Holder specifically for use
therein, and to reimburse such persons for any legal or other expenses
reasonably incurred in connection with investigating or defending any such loss,
claim, damage, liability or action, provided that a Holder's total liability
under any indemnity given pursuant to this subsection (b) shall not exceed the
net proceeds received by such Holder from the sale of stock pursuant to the
registration.
(c) Notice of Claim. Each party entitled to indemnification under
this Agreement (the "Indemnified Party") shall give notice to the party required
to provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has written notification of any claim as to which indemnity
may be sought, and shall permit the
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Indemnifying Party to assume the defense of any such claim or any litigation
resulting therefrom, provided that (i) if the claim is made under clause (a)
above, the Holders of a majority of the Registrable Stock included in the
Registration will have the right to designate separate counsel, (ii) if separate
counsel is not designated under clause (i) counsel for the Indemnifying Party,
who shall conduct the defense of such claim or litigation, shall be approved by
the Indemnified Party (whose approval shall not unreasonably be withheld), and
the Indemnified Party may participate in such defense at the Indemnified Party's
expense, and (iii) the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this subsection (c). No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect of such
claim or litigation.
9. Contribution. If the indemnification provided for in Section 9 is for
any reason held to be unavailable, or insufficient to hold harmless an
Indemnified Party with respect to any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Party shall contribute to the amount
paid or payable by such Indemnified Party as a result of such losses, claims,
damage or liabilities 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 that resulted
in such losses, claims, damages or liabilities as well as any other relevant
equitable considerations; provided, however that each Holder's liability under
this Section 10 shall not exceed such Holder's net proceeds from the offering of
securities made in connection with a registered offering pursuant to this
Agreement. 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. For purposes of this Section 10 each person, if any, who
controls, within the meaning of the Securities Act, any Indemnified Party shall
have the same rights to contribution as such Indemnified Party, and each person,
if any, who controls the Company within the meaning of the Securities Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company. Any party entitled to contribution, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 10, will notify such party or parties from whom contribution
may be sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section 10. Notwithstanding the
foregoing, to the extent that the provisions on indemnification and contribution
contained in the underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall be controlling.
10. Transfer of Registration Rights. The rights to cause the Company to
register Underlying Common Stock granted to the Investors may only be assigned
to a transferee in
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connection with the transfer or assignment by an Investor of at least 20% of the
Underlying Common Stock (including the Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred and/or Series E Preferred) held by such
Investor or to any transferee or assignee who is an affiliate, a general or
limited partner or retired general or limited partner of such Investor or any
affiliate of such Investor or a limited partnership or limited liability company
member or retired limited liability company member of such transferee or
assignee, provided that such transfer or assignment is otherwise effected in
accordance with applicable securities laws and that any such transferee or
assignee agrees in writing to be bound by the terms of this Agreement. The
rights of an Existing Shareholder under this Agreement are not transferable or
assignable (voluntarily, involuntarily or by operation of law) except they may
be assigned in connection with a Permitted Family Transfer (as defined under the
Purchasers and Existing Shareholders Agreement dated April 3, 1995 by and among
the Company and the individuals and entities set forth therein) and in the event
of a Permitted Family Transfer the term "Existing Shareholder" shall include
such permitted transferees.
11. Information by Holder. The Holder or Holders of Registrable Stock
included in any registration shall furnish to the Company such information
regarding such Holder or Holders and the distribution proposed by such Holder or
Holders as the Company may request in writing and as shall be required in
connection with any registration referred to in this Agreement.
12. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Securities and Exchange Commission which
may at any time permit the sale of the Underlying Common Stock to the public
without registration, after such time as a public market exists for the Common
Stock of the Company, the Company agrees to:
(a) Public Information. Make and keep public information
available, as those terms are understood and defined in Rule 144 under the
Securities Act, at all times after the effective date of the first registration
under the Securities Act filed by the Company for an offering of its securities
to the general public and to use its best efforts to cause its Common Stock to
be quoted in the National Association of Securities Dealers, Inc.'s electronic
interdealer quotation system known as NASDAQ.
(b) Filing. File with the Securities and Exchange Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and Exchange Act (at any time after it has become subject to such
reporting requirements).
(c) Evidence of Compliance. So long as an Investor owns any
Underlying Common Stock to furnish to the Investor forthwith upon request (i) a
written statement by the Company as to its compliance with the reporting
requirements of said Rule 144 (at any time after ninety (90) days after the
effective date of the first registration statement filed by the Company for an
offering of its securities to the general public) and of the Securities Act and
Exchange Act (at any time after it has become subject to such reporting
requirements), (ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents of the Company and other
information in the possession of or reasonably obtainable by the Company as an
Investor may reasonably request in availing itself of any rule or regulation of
the Commission allowing an Investor to sell any such securities without
registration.
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(d) Other Action. The Company, at its expense, will also take
such other action necessary or desirable to permit the Investors to sell the
Underlying Common Stock pursuant to the requirements of Rule 144 and all
applicable securities laws of such states as the Investors desiring to sell the
Underlying Common Stock shall request.
13. Other Registration Rights. The Company will not grant to any
existing or future holder of its securities any rights to require the Company to
register such securities under the Securities Act that are more favorable than
those provided for herein and will not grant any registration rights that
diminish or adversely affect the registration rights of Investors hereunder or
that could result in a reduction in the amount of any securities of the
Investors that are included in any registration if the managing underwriter in
any offering determined that marketing factors required the limitation of the
number of shares of Common Stock or other securities to be included in the
offering, provided that the foregoing shall not prohibit the Company from
granting future purchasers of securities the right to participate with the
Investors on a pro rata basis in the exercise of "piggyback" registration rights
in offerings where no marketing cutback rights are exercised by the
underwriters.
14. Notices. All notices hereunder shall be in writing and shall be
given by personal delivery or by registered or certified mail (postage prepaid
and return receipt requested) or by courier or other delivery service (which
obtains a receipt evidencing delivery) or by facsimile transmission addressed
(i) to any Purchaser at its address as set forth in the Schedule of Purchasers,
(ii) to any Existing Shareholder at his address set forth in the Schedule of
Existing Shareholders, (iii) to any subsequent Holder at its address which it
gives in the manner herein specified to the other parties to this Agreement and
(iv) to the Company, at its address set forth below:
Virage, Inc.
000 Xxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Lego, President
Facsimile: (000) 000-0000
or such other address as any party may designate to the other parties hereto in
accordance with the aforesaid procedure. All notices shall be deemed to have
been given as of the date of personal delivery, delivery by a courier or as of
the date of deposit in the United States mail, as the case may be.
15. Assignment, Binding Effect. This Agreement shall inure to the
benefit of and be binding upon the parties and their respective permitted
transferees, heirs, executors, legal representatives and successors; provided
that an Existing Shareholder's rights hereunder may only be assigned in
connection with a Permitted Family Transfer as provided in Section 11.
16. Remedies. The rights of the parties under this Agreement are unique
and, accordingly, the parties intend that in addition to all other legal or
equitable remedies available, injunctive relief and the remedy of specific
performance may be utilized in the event of the breach or threatened breach of
this Agreement.
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17. Entire Agreement. This Agreement contains the sole and entire
understanding of the parties with respect to its subject matter, and all prior
negotiations, discussions, commitments and understandings heretofore had between
them with respect thereto are merged herein.
18. Amendments and Waivers. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally or in writing, except
that any term of this Agreement may be amended and the observance of any such
term may be waived (either generally or in a particular instance either
retroactively or prospectively) with (but only with) the written consent of the
Company and the Investors holding at least 67% of the Underlying Common Stock;
provided that (i) no such amendment or waiver shall affect the provisions of
Section 3(b) and this Section 18 without the written consent of all Investors,
and (ii) any amendment that has a material adverse effect on the rights of the
Existing Shareholders under any section of this Agreement which specifically
grants rights to the Existing Shareholders, shall also require the written
consent of Existing Shareholders holding at least a majority of the Registrable
Stock held by all Existing Shareholders. No such waiver shall extend to or
affect any obligation not expressly waived.
19. Counterparts. This Agreement may be executed in more than one
counterpart, each of which shall be deemed to be an original and which,
together, shall constitute one and the same instrument.
20. Governing Law. The validity, legality, enforceability and
interpretation of this Agreement shall be governed by the laws of the State of
California, without giving effect to principles of conflicts of laws.
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IN WITNESS WHEREOF, this Agreement has been duly executed on the date
hereinabove set forth.
COMPANY:
VIRAGE, INC.
By: /s/ Xxxx Lego
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Its: President and Chief Executive Officer
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PURCHASERS:
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By:
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Name:
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Its:
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