EXHIBIT 10.1
EXHIBIT C
FORM OF
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"),
dated as of ___________, 2002, by and among divine, inc., a Delaware
corporation, with headquarters located at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000 (the "COMPANY"), and the undersigned buyers (each, a "BUYER" and
collectively, the "BUYERS") amends and restates in its entirety that certain
Registration Rights Agreement, dated as of May 31, 2002, by and among the
Company and the Buyers.
RECITALS
A. In connection with, and pursuant to that certain Securities Purchase
Agreement by and among the parties hereto, dated as of May 29, 2002 (the
"ORIGINAL PURCHASE AGREEMENT"), the Company issued to certain of the Buyers
shares (the "INITIAL PREFERRED SHARES") of the Company's Series B Convertible
Preferred Stock, par value $0.001 per share (the "SERIES B PREFERRED STOCK"),
which are convertible into shares of Class A common stock, par value $0.001 per
share (the "COMMON STOCK") of the Company (as converted, the "INITIAL CONVERSION
SHARES") in accordance with the terms of the Company's Certificate of
Designations, Preferences and Rights of the Series B Preferred Stock filed with
the Secretary of State of the State of Delaware on May 30, 2002, as amended by
the Series B Certificate of Amendment (as defined in the Second Amended and
Restated Purchase Agreement (as defined below)) (as amended, the "SERIES B
CERTIFICATE OF DESIGNATIONS").
B. In connection with, and pursuant to, that certain Second Amended and
Restated Securities Purchase Agreement by and among the parties hereto, dated as
of July 24, 2002, (the "SECOND AMENDED AND RESTATED PURCHASE AGREEMENT"), the
Company has agreed, upon the terms and subject to the conditions of the Second
Amended and Restated Purchase Agreement, to issue and sell to the Buyers shares
of the Series B-1 Convertible Preferred Stock, par value $0.001 per share (the
"SERIES B-1 PREFERRED STOCK") of the Company (the "MANDATORY PREFERRED SHARES"
and, together with the Initial Preferred Shares, the "PREFERRED SHARES"), which
shall be convertible into shares of Common Stock of the Company (as converted,
the "MANDATORY CONVERSION SHARES" and, together with the Initial Conversion
Shares, the "CONVERSION SHARES"), in accordance with the terms of the Company's
Certificate of Designations, Preferences and Rights of the Series B-1 Preferred
Stock filed with the Secretary of State of the State of Delaware on July 17,
2002, as amended by the Series B-1 Certificate of Amendment (as defined in the
Second Amended and Restated Purchase Agreement) (as amended, the "SERIES B-1
CERTIFICATE OF DESIGNATIONS"). Capitalized terms used, and not otherwise
defined, herein shall have the respective meanings set forth in the Second
Amended and Restated Purchase Agreement.
C. To induce the Buyers to execute, deliver and perform the Second Amended
and Restated Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute (collectively, the
"1933 ACT"), and applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the Buyers
hereby agree as follows:
1. DEFINITIONS.
In addition to the capitalized terms elsewhere defined herein, the
following terms, when used herein, shall have the following meanings, unless the
context otherwise requires:
a. "EFFECTIVENESS DEADLINE" means May 31, 2003.
b. "INVESTOR" means a Buyer, any transferee or assignee thereof to
whom a Buyer assigns its rights under this Agreement and who agrees to become
bound by the provisions of this Agreement in accordance with Section 8(b) and
any transferee or assignee thereof to whom a transferee or assignee assigns its
rights under this Agreement and who agrees to become bound by the provisions of
this Agreement in accordance with Section 8(b).
c. "PERSON" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, other entity, an
unincorporated organization and a governmental or any department or agency
thereof.
d. "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing one or more Registration
Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on a continuous
or delayed basis ("RULE 415"), and the declaration or ordering of effectiveness
of such Registration Statement(s) by the SEC.
e. "REGISTRABLE SECURITIES" means (i) the Initial Conversion Shares
issued or issuable upon conversion of the Initial Preferred Shares, (ii) the
Mandatory Conversion Shares issued or issuable upon conversion of the Mandatory
Preferred Shares and (iii) any shares of capital stock issued or issuable with
respect to the Initial Conversion Shares and the Mandatory Conversion Shares as
a result of any stock split, stock dividend, recapitalization, exchange or
similar event or otherwise; PROVIDED, HOWEVER, that Registrable Securities shall
not include any such shares (a) which have been disposed of pursuant to an
effective registration statement under the 1933 Act, (b) sold or otherwise
transferred in a transaction in which the rights under the provisions of this
Agreement have not been assigned, or (c) which have been sold under Rule 144.
f. "REGISTRATION STATEMENT" means a registration statement or
registration statements of the Company filed under the 1933 Act covering the
Registrable Securities.
g. "RULE 144" means Rule 144 promulgated by the SEC.
h. "SEC" means the United States Securities and Exchange Commission.
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2. REGISTRATION.
a. MANDATORY REGISTRATION. The Company shall prepare, and, as
soon as reasonably practicable but in no event later than the earlier of (i) 45
days prior to May 31, 2003 or (ii) 30 days after the expiration of the lock-up
provisions set forth in Section 5(m) of the Second Amended and Restated Purchase
Agreement pursuant to Section 5(m)(ii) therein (the "LOCK-UP EXPIRATION") if
Form S-3 is available for the Registration Statement or 60 days after the
Lock-Up Expiration if Form S-3 is unavailable for such registration (the "FILING
DEADLINE"), file with the SEC the Registration Statement on Form S-3 covering
the resale of all of the Registrable Securities. In the event that Form S-3 is
unavailable for such a registration, the Company shall use such other form as is
available for such a registration, subject to the provisions of Section 2(c).
The Registration Statement prepared pursuant hereto shall register for resale at
least that number of shares of Common Stock equal to the aggregate number of
Registrable Securities issued and outstanding or deemed issued and outstanding
on an as-converted basis as of the trading day immediately preceding the date
the Registration Statement is initially filed with the SEC (as if all of the
Mandatory Preferred Shares then issuable under the Second Amended and Restated
Purchase Agreement were issued and outstanding on such date), subject to
adjustment as provided in Section 2(d). The Company shall use its best efforts
to have the Registration Statement declared effective by the SEC as soon as
reasonably practicable, but in no event later than the Effectiveness Deadline.
b. LEGAL COUNSEL. Subject to Section 5 hereof, the Buyers holding
a majority of the Registrable Securities and Preferred Shares (on an as
converted basis) shall have the right to select one legal counsel to review and
oversee any offering pursuant to this Section 2 ("LEGAL COUNSEL"), which shall
be Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx or such other counsel as thereafter
designated by the holders of a majority of the Registrable Securities. The
Company shall reasonably cooperate with Legal Counsel in performing the
Company's obligations under this Agreement.
c. INELIGIBILITY FOR FORM S-3. In the event that Form S-3 is not
available for the registration of the resale of Registrable Securities
hereunder, the Company shall (i) register the resale of the Registrable
Securities on another appropriate form reasonably acceptable to the holder of a
majority of the Registrable Securities and (ii) undertake to register the
Registrable Securities on Form S-3 as soon as such form is available, provided
that the Company shall maintain the effectiveness of the Registration Statement
then in effect until such time as a Registration Statement on Form S-3 covering
the Registrable Securities has been declared effective by the SEC.
d. SUFFICIENT NUMBER OF SHARES REGISTERED. In the event that the
number of shares available under a Registration Statement filed pursuant to
Section 2(a) is insufficient to cover all of the Registrable Securities required
to be covered by such Registration Statement, the Company shall amend the
Registration Statement, or file a new Registration Statement (on the short form
available therefor, if applicable), or both, so as to cover at least 110% of the
aggregate number of the Registrable Securities required to be covered by such
Registration Statement as of the trading day immediately preceding the date of
the filing of such amendment or new Registration Statement, in each case, as
soon as practicable, but in any event not later than fifteen
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(15) days after the necessity therefor arises. The Company shall use it best
efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof.
e. EFFECT OF FAILURE TO FILE AND OBTAIN AND MAINTAIN
EFFECTIVENESS OF REGISTRATION STATEMENT. If (i) a Registration Statement
covering Registrable Securities required to be filed by the Company pursuant to
this Agreement is not declared effective by the SEC on or before the
Effectiveness Deadline or (ii) on any day after the Registration Statement has
been declared effective by the SEC sales of the Registrable Securities required
to be included on such Registration Statement cannot be made (other than during
an Allowable Grace Period (as defined in Section 3(m))) pursuant to the
Registration Statement (including, without limitation, because of a failure to
keep the Registration Statement effective, to disclose such information as is
necessary for sales to be made pursuant to the Registration Statement or to
register sufficient shares of Common Stock), then, as partial relief for the
damages to any holder by reason of any such delay in or reduction of its ability
to sell the underlying shares of Common Stock (which remedy shall not be
exclusive of any other remedies available at law or in equity), the Company
shall pay to each Buyer then holding Registrable Securities (or Preferred
Shares) covered by such Registration Statement an amount in cash equal to two
percent (2%) of the portion of the Purchase Price attributable to such
Registrable Securities (or Preferred Shares) then held by such Buyer, for each
thirty (30) day period the applicable Registration Statement is not effective or
available (other than during an Allowable Grace Period) for the sale of at least
all the Registrable Securities required to be included on such Registration
Statement (or a lesser pro rata payment amount if such period is less than
thirty (30) days); provided however, that notwithstanding anything in this
Agreement to the contrary, the parties hereto hereby agree that, with respect to
any underwritten registration hereunder, the Effectiveness Deadline and
Allowable Grace Period, as the case may be, shall be automatically extended to
the extent a delay is caused by the underwriter or the underwriting process,
including, but not limited to, any failure to register any Registrable
Securities in said registration as a result of an underwriter's cut-back under
Section 2(g) hereof. The payments to which a holder shall be entitled pursuant
to this Section 2(e) are referred to herein as "REGISTRATION DELAY PAYMENTS."
Registration Delay Payments shall be paid on the earlier of (I) the last day of
the calendar month during which such Registration Delay Payments are incurred
and (II) the third Business Day after the event or failure giving rise to the
Registration Delayed Payments is cured.
f. SELECTION OF UNDERWRITERS. The Buyers holding a majority of
the Registrable Securities and Preferred Shares (on an as converted basis) shall
have the right to select an underwriter(s), if any, for the Registrable
Securities to be registered pursuant to Section 2(a), subject to the Company's
written approval of such underwriter, such written approval not to be
unreasonably withheld.
g. In the event that a registration hereunder is underwritten, if
a representative of the underwriters advises the Investors in writing that
marketing factors require a limitation of the number of securities to be
underwritten (including Registrable Securities) because the number of securities
to be underwritten is likely to have an adverse effect on the price, timing or
the distribution of securities to be offered, then the number of securities that
may be included in the underwriting shall be allocated, first, to the Investors
on a pro rata basis based
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on the total number of Registrable Securities held by the Investors and second
to the Company and other holders of registration rights to the extent they are
participating in such offering. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
3. RELATED OBLIGATIONS.
At such time as the Company is obligated to file a Registration
Statement with the SEC pursuant to Section 2(a) or 2(d), the Company will use
its best efforts to effect the registration of the Registrable Securities
covered by such Registration Statement in accordance with the intended method of
disposition thereof and, pursuant thereto, the Company shall have the following
obligations:
a. The Company shall promptly prepare and file with the SEC a
Registration Statement with respect to the applicable Registrable Securities
(but in no event later than the Filing Deadline) and use its best efforts to
cause such Registration Statement relating to the applicable Registrable
Securities to become effective as soon as practicable after such filing (but in
no event later than the Effectiveness Deadline). The Company shall use its best
efforts to keep each Registration Statement effective pursuant to Rule 415 at
all times until the earlier of (i) the date as of which the Investors may sell
all of the Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or successor thereto) promulgated under the
1933 Act or (ii) the date on which the Investors shall have sold all the
Registrable Securities covered by such Registration Statement (each, a
"REGISTRATION PERIOD"), which Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein) shall not contain any
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, in light of the
circumstances in which they were made, not misleading.
b. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424 promulgated
under the 1933 Act, as may be necessary to keep such Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by such Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of in accordance with the intended methods of disposition by the seller or
sellers thereof as set forth in such Registration Statement. In the case of
amendments and supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this Section 3(b)) by
reason of the Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any
analogous report under the Securities Exchange Act of 1934, as amended (the
"1934 ACT"), the Company shall have incorporated such report by reference into
the Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act report is filed
which created the requirement for the Company to amend or supplement the
Registration Statement.
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c. The Company shall permit Legal Counsel to review and comment upon
(i) the Registration Statement prior to its filing with the SEC and (ii) all
other Registration Statements and all amendments and supplements to all
Registration Statements (except for Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K and any similar or
successor reports) filed under and pursuant to this Agreement prior to their
filing with the SEC. The Company shall not submit a request for acceleration of
the effectiveness of any Registration Statement or any amendment or supplement
thereto without the prior approval of Legal Counsel, which consent shall not be
withheld unless Legal Counsel has reasonable objections to disclosures in the
Registration Statement relating to (I) the Registrable Securities or the
Preferred Shares or (II) the Investors. The Company shall furnish to Legal
Counsel, without charge, (i) any correspondence from the SEC or the staff of the
SEC to the Company or its representatives relating to any Registration
Statement, (ii) promptly after the same is prepared and filed with the SEC, one
copy of any Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits and (iii) upon the effectiveness of any Registration
Statement, one copy of the prospectus included in such Registration Statement
and all amendments and supplements thereto. The Company shall reasonably
cooperate with Legal Counsel in performing the Company's obligations pursuant to
this Section 3.
d. The Company shall furnish to each Investor whose Registrable
Securities are included in any Registration Statement, without charge, (i)
promptly after the same is prepared and filed with the SEC, at least one copy of
such Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference, all
exhibits and each preliminary prospectus, (ii) upon the effectiveness of any
Registration Statement, such number of copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Investor may reasonably request) as they may reasonably
request and (iii) such other documents, including copies of any preliminary or
final prospectus, as such Investor may reasonably request from time to time in
order to facilitate the disposition of the Registrable Securities owned by such
Investor.
e. The Company shall use its best efforts to cause such Registrable
Securities to be registered with or approved by such other governmental agencies
or authorities as may be necessary to consummate the disposition of such
Registrable Securities pursuant to a Registration Statement; provided, however,
that the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction.
f. The Company shall notify Legal Counsel and each Investor in writing
of the happening of any event, as promptly as practicable after becoming aware
of such event, as a result of which the prospectus included in a Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading (provided that in no event shall such notice contain any
material,
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nonpublic information), and promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and deliver
such number of copies of such supplement or amendment to Legal Counsel and each
Investor as Legal Counsel or such Investor may reasonably request. The Company
shall also promptly notify Legal Counsel and each Investor in writing (i) when a
prospectus or any prospectus supplement or post-effective amendment has been
filed, and when a Registration Statement or any post-effective amendment has
become effective (notification of such effectiveness shall be delivered to Legal
Counsel and each Investor by facsimile on the same day of such effectiveness and
by overnight mail), (ii) of any request by the SEC for amendments or supplements
to a Registration Statement or related prospectus or related information, and
(iii) of the Company's reasonable determination that a post-effective amendment
to a Registration Statement would be appropriate.
g. The Company shall use its best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration Statement,
or the suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension at the earliest possible
moment and to notify Legal Counsel and each Investor who holds Registrable
Securities being sold of the issuance of such order and the resolution thereof
or its receipt of actual notice of the initiation or threat of any proceeding
for such purpose.
h. The Company shall cooperate with the Investors who hold Registrable
Securities being offered and, to the extent applicable, facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations or amounts,
as the case may be, as the Investors may reasonably request and registered in
such names as the Investors may request.
i. The Company shall provide a transfer agent and registrar of all
such Registrable Securities not later than the effective date of the applicable
Registration Statement.
j. The Company shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any registration
hereunder.
k. Within five (5) Business Days after a Registration Statement which
covers applicable Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to deliver,
to the transfer agent for such Registrable Securities (with copies to the
Investors whose Registrable Securities are included in such Registration
Statement) confirmation that such Registration Statement has been declared
effective by the SEC in the form attached hereto as EXHIBIT A.
l. The Company shall take all other actions reasonably necessary to
expedite and facilitate disposition by Investors of Registrable Securities
pursuant to a Registration Statement.
m. Notwithstanding anything to the contrary in Section 3(g), at any
time after the applicable Registration Statement has been declared effective by
the SEC, the Company may
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suspend the use or effectiveness of any Registration Statement (a "GRACE
PERIOD") (and the Investors hereby agree not to offer or sell any Registrable
Securities pursuant to such Registration Statement during such Grace Period) if
there is material non-public information about the Company that the Company
reasonably determines not to be in the best interests of the Company to disclose
and that the Company is not otherwise required to disclose; provided, that the
Company shall promptly (i) notify the Investors in writing of such suspension
and the date on which the Grace Period will begin and (ii) notify the Investors
in writing of the date on which the Grace Period ends; and, provided further,
that no Grace Period shall exceed forty-five (45) consecutive days and during
any 365 day period such Grace Periods shall not exceed an aggregate of ninety
(90) days provided that no Grace Period arising out of the same set of facts,
circumstances or transactions shall be permitted for consecutive forty-five (45)
day periods of days (an "ALLOWABLE GRACE PERIOD"). For purposes of determining
the length of a Grace Period above, the Grace Period shall begin on and include
the date the holders receive the notice referred to in clause (i) and shall end
on and include the later of the date the holders receive the notice referred to
in clause (ii) and the date referred to in such notice. The provisions of
Section 3(g) hereof shall not be applicable during any Allowable Grace Period.
Upon expiration of the Grace Period, the Company shall again be bound by the
first sentence of Section 3(f) with respect to the information giving rise
thereto unless such material non-public information is no longer applicable.
n. In the event of any underwritten public offering, the Company shall
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter(s) of such offering. Each
Investor participating in such underwriting shall also enter into and perform
its obligations pursuant to such an agreement.
o. The Company shall obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to the managing underwriters, if any) in customary
form addressed to the Investors and the underwriters, if any, covering such
matters as are customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by the Investors
and such underwriters (it being agreed that the matters to be covered by such
opinion or a written statement by such counsel delivered in connection with such
opinions shall include, without limitation, an opinion, subject to reasonable
and customary qualifications as of the date of the opinion and as of the
effective date of the Registration Statement relating to the registration or
most recent post-effective amendment thereto, as the case may be, regarding the
absence from such registration statement and the prospectus included therein, as
then amended or supplemented, including the documents incorporated by reference
therein, of an untrue statement of a material fact or the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading).
p. The Company shall obtain "comfort letters" and updates thereof from
the independent public accountants of the Company (and, if necessary, any other
independent public accountants of any subsidiary of the Company or of any
business acquired by the Company for which financial statements and financial
data are, or are required to be, included in the Registration Statement),
addressed to the Investors and the underwriters, in customary form and
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covering matters of the type customarily covered in comfort letters in
connection with primary underwritten offerings.
q. The Company shall deliver such other customary documents and
certificates as may be reasonably requested by the Investors and the managing
underwriters, if any, including those to evidence compliance with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the Company.
r. Promptly after the filing of a Registration Statement hereunder,
the Company shall promptly secure the listing of all of the Registrable
Securities covered by such Registration Statement upon each national securities
exchange and automated quotation system, if any, upon which shares of Common
Stock shall be so listed (subject to notice of issuance) and shall maintain, so
long as any other shares of Common Stock shall be so listed, such listing of
such Registrable Securities.
4. OBLIGATIONS OF THE INVESTORS.
a. At least three (3) Business Days prior to the first anticipated
filing date of a Registration Statement, the Company shall notify each Investor
in writing of the information the Company reasonably requires from each such
Investor if such Investor elects to have any of such Investor's Registrable
Securities included in such Registration Statement. It shall be a condition
precedent to the obligations of the Company to complete the registration
pursuant to this Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably required to effect the registration of such Registrable Securities
and shall execute such documents in connection with such registration as the
Company may reasonably request.
b. Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any Registration
Statement hereunder, unless such Investor no longer holds any Registrable
Securities or has notified the Company in writing of such Investor's election to
exclude all of such Investor's Registrable Securities from such Registration
Statement.
c. Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(g) or
the first sentence of 3(f), such Investor will immediately discontinue
disposition of Registrable Securities pursuant to any Registration Statement(s)
covering such Registrable Securities until such Investor's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(g) or the
first sentence of 3(f) or receipt of notice that no supplement or amendment is
required and, if so directed by the Company, such Investor shall deliver to the
Company, or destroy all copies in such Investor's possession, any prospectus
covering such Registrable Securities current at the time of receipt of such
notice. Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended shares of Common Stock to a transferee of
an
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Investor in accordance with the terms of the Second Amended and Restated
Purchase Agreement in connection with any sale of Registrable Securities with
respect to which an Investor has entered into a contract for sale prior to the
Investor's receipt of a notice from the Company of the happening of any event of
the kind described in Section 3(g) or the first sentence of 3(f) and for which
the Investor has not yet settled.
5. EXPENSES OF REGISTRATION.
All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees,
fees and disbursements of Legal Counsel (up to an aggregate of $10,000) in
connection with registration filing or qualification pursuant to Sections 2 and
3 of this Agreement and fees and disbursements of counsel for the Company shall
be paid by the Company.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a Registration
Statement under this Agreement:
a. The Company agrees to indemnify, to the fullest extent permitted by
law, each Investor participating in the registration, and each of its partners,
members, managers, officers and directors and each Person who controls such
holders (within the meaning of the 0000 Xxx) against all losses, claims,
damages, liabilities and expenses (including without limitation, attorneys'
fees) ("LIABILITIES") caused by (i) any untrue or alleged untrue statement of
material fact contained in any Registration Statement or any prospectus or
preliminary prospectus or amendment thereof or supplement thereto, (ii) any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any violation
or alleged violation by the Company of the 1933 Act, the 1934 Act, any state
securities law or any rule or regulation promulgated under the 1933 Act, 1934
Act, or any state securities law, in each case in connection with such
registration, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by such Investor expressly for
use therein or by such Investor's failure to deliver a copy of the Registration
Statement or prospectus or any amendments or supplements thereof or thereto
after the Company has furnished such Investor with a sufficient number of copies
of the same. The payments required by this Section 6(a) will be made
periodically during the course of the investigation or defense, as and when
bills are received or expenses incurred.
b. Each Investor participating in a registration shall furnish to the
Company in writing such information and affidavits as the Company reasonably
requests relating to information about the Investor for use in connection with
any Registration Statement or any prospectus, preliminary prospectus, amendment
or supplement thereof or thereto relating thereto and, to the fullest extent
permitted by law, shall indemnify the Company, its directors and officers and
each Person who controls the Company (within the meaning of the 0000 Xxx)
against any Liabilities resulting from any untrue or alleged untrue statement of
material fact
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contained in such Registration Statement or any prospectus, preliminary
prospectus, amendment or supplement thereof or thereto, or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but only to the extent that such
untrue statement or omission related to such Investor and is contained in any
information or affidavit so furnished in writing by such Investor specifically
for use in such Registration Statement or any prospectus, preliminary
prospectus, amendment or supplement thereof or thereto; PROVIDED that the
obligation to indemnify hereunder will be several, not joint and several, among
the Investors holding such Registrable Securities, and the liability of each
such Investor under this Section 6 shall be limited to the net amount received
by such Investor from the sale of Registrable Securities pursuant to such
Registration Statement.
c. PROCEDURE. Any Person entitled to indemnification hereunder shall
(i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification, provided any such failure shall not
relieve the indemnifying party of liability hereunder, except to the extent that
the indemnifying party is prejudiced or injured by such failure, and (ii) unless
in such indemnified party's reasonable judgment an actual or potential conflict
of interest between such indemnified and indemnifying parties may exist with
respect to such claim, permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party. If
such defense is assumed, the indemnifying party will not be subject to any
liability for any settlement made by the indemnified party without its consent
(but such consent will not be unreasonably withheld). An indemnifying party who
is not entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party an actual or potential conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect to which (x) any
indemnified party is or could have been a party and (y) indemnity has or could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
for claims that are the subject matter of such proceeding.
d. CONTRIBUTION. To the extent any indemnification by an indemnifying
party provided for in this Section 6 is prohibited or limited by law, the
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Liabilities in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and the indemnified party in connection with the
statements or omissions which resulted in such Liabilities, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of material fact or omission or
alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
11
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined solely by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 0000 Xxx) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
e. SURVIVAL. The indemnification and contribution provided for under
this Agreement will remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party and will survive the
transfer of securities.
7. COMPLIANCE WITH RULE 144.
At the request of an Investor proposing to sell securities in
compliance with Rule 144, the Company will (i) forthwith furnish to such
Investor, upon request, a written statement of compliance with the filing
requirements of the SEC as set forth in Rule 144, as such rule may be amended
from time to time, and (ii) use its reasonable best efforts to make available to
the public and such Investor such information as will enable such Investor to
make sales pursuant to Rule 144.
8. MISCELLANEOUS.
a. OTHER REGISTRATION RIGHTS. The Company may hereafter grant to any
Person or Persons the right to request the Company to register any equity
securities of the Company, or any securities convertible or exchangeable into or
exercisable for such securities, without the prior written consent of the
holders of the Registrable Securities; provided, however, the securities held by
such Person or Persons may not have priority over Registrable Securities under
Section 2(g).
b. ASSIGNMENT OF REGISTRATION RIGHTS. The registration rights of the
Holder under this Agreement with respect to any Registrable Securities may be
assigned to any Person who acquires such Registrable Securities; PROVIDED that
(a) the Investor shall give the Company written notice at or prior to the time
of such assignment stating the name and address of the assignee and identifying
the shares with respect to which the rights under this Agreement are being
assigned; (b) such assignee shall agree in writing, in form and substance
reasonably satisfactory to the Company, to be bound to the same extent and in
the same capacity as the Investor by the provisions of this Agreement; and (c)
such assignee acknowledges, immediately following such assignment, the further
disposition of such securities by such assignee is restricted under the 1933
Act.
c. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto will bind and inure to the benefit of the
respective permitted successors and assigns of the parties hereto, whether so
expressed or not.
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d. SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
e. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement
are inserted for convenience of reference only and do not constitute a part of,
and shall not be utilized in interpreting, this Agreement.
f. NOTICES. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); (iii) one (1) Business Day after deposit
with a nationally recognized overnight delivery service or (iv) five (5) days
after deposit in the U.S. mail, return receipt requested, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company:
divine, inc.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
With a copy to:
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
If to Legal Counsel:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Day
If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer's representatives as set forth
on the Schedule of Buyers, or to such other address and/or facsimile number
and/or to the attention of such other person as the
13
recipient party has specified by written notice given to each other party five
(5) days prior to the effectiveness of such change. Written confirmation of
receipt or deposit in the U.S. mail, as the case may be, (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission, (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service or (D) by a
signed return receipt in accordance with clause (i), (ii), (iii), or (iv) above,
respectively.
g. GOVERNING LAW. The corporate laws of the State of Delaware shall
govern all issues concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of Delaware, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of Delaware. Each party hereby irrevocably
submits to the non-exclusive jurisdiction of the state and federal courts
sitting in the State of Delaware, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
h. AMENDMENTS AND WAIVERS. The provisions of this Agreement may be
amended upon the written agreement of the Company and the Investors holding a
majority of the Registrable Securities, determined as if all of the Preferred
Shares then outstanding have been converted into Registrable Securities without
regard to any limitations on conversion of the Preferred Shares. Any waiver,
permit, consent or approval of any kind or character on the part of any holders
of any provision or condition of this Agreement must be made in writing and
shall be effective only to the extent specifically set forth in writing.
i. FINAL AGREEMENT. This Agreement, constitutes the complete and final
agreement of the parties concerning the matters referred to herein and
supersedes all prior agreements and understandings.
14
j. EXECUTION. This Agreement may be executed in identical
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.
k. CONSENTS. All consents and other determinations to be made by the
Investors pursuant to this Agreement shall be made, unless otherwise specified
in this Agreement, by Investors holding a majority of the Registrable
Securities, determined as if all of the Preferred Shares then outstanding have
been converted into Registrable Securities without regard to any limitations on
conversion of the Preferred Shares.
l. CONSTRUCTION. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent and no
rules of strict construction will be applied against any party.
m. SUCCESSORS AND ASSIGNS. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
* * * * * *
15
IN WITNESS WHEREOF, the Buyers and the Company have caused this Amended and
Restated Registration Rights Agreement to be duly executed as of the date first
written above.
COMPANY:
divine, inc.
By:
--------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President and
General Counsel
IN WITNESS WHEREOF, the Buyers and the Company have caused this Amended and
Restated Registration Rights Agreement to be duly executed as of the date first
written above.
BUYERS:
OAK INVESTMENT PARTNERS IX,
LIMITED PARTNERSHIP
---------------------------------------
Xxxxxxx X. Xxxxxx
Managing Member of Oak Associates IX, LLC
The General Partner of Oak Investment
Partners IX, Limited Partnership
IN WITNESS WHEREOF, the Buyers and the Company have caused this Amended and
Restated Registration Rights Agreement to be duly executed as of the date first
written above.
BUYERS:
OAK IX AFFILIATES FUND, LIMITED
PARTNERSHIP
------------------------------------
Xxxxxxx X. Xxxxxx
Managing Member of Oak IX Affiliates, LLC
The General Partner of Oak IX Affiliates
Fund, Limited Partnership
IN WITNESS WHEREOF, the Buyers and the Company have caused this Amended and
Restated Registration Rights Agreement to be duly executed as of the date first
written above.
BUYERS:
OAK IX AFFILIATES FUND-A,
LIMITED PARTNERSHIP
---------------------------------------
Xxxxxxx X. Xxxxxx
Managing Member of Oak IX Affiliates, LLC
The General Partner of Oak IX Affiliates
Fund-A, Limited Partnership
IN WITNESS WHEREOF, the Buyers and the Company have caused this Amended and
Restated Registration Rights Agreement to be duly executed as of the date first
written above.
BUYERS:
OAK INVESTMENT PARTNERS X,
LIMITED PARTNERSHIP
---------------------------------------
Xxxxxxx X. Xxxxxx
Managing Member of Oak Associates X, LLC
The General Partner of Oak Investment
Partners X, Limited Partnership
IN WITNESS WHEREOF, the Buyers and the Company have caused this Amended and
Restated Registration Rights Agreement to be duly executed as of the date first
written above.
BUYERS:
OAK X AFFILIATES FUND,
LIMITED PARTNERSHIP
---------------------------------------
Xxxxxxx X. Xxxxxx
Managing Member of Oak X Affiliates, LLC
The General Partner of Oak X Affiliates
Fund, Limited Partnership
IN WITNESS WHEREOF, the Buyers and the Company have caused this Amended and
Restated Registration Rights Agreement to be duly executed as of the date first
written above.
BUYERS:
---------------------------------
Xxxxxx X. Xxxxxxxxxx
IN WITNESS WHEREOF, the Buyers and the Company have caused this Amended and
Restated Registration Rights Agreement to be duly executed as of the date first
written above.
BUYERS:
THE XXXXX X. XXXXX CHARITABLE
REMAINDER TRUST
By:
-----------------------------------
Name:
------------------------------
Its:
------------------------------
IN WITNESS WHEREOF, the Buyers and the Company have caused this Amended and
Restated Registration Rights Agreement to be duly executed as of the date first
written above.
BUYERS:
THE XXXXX FOUNDATION
By:
-----------------------------------
Name:
------------------------------
Its:
------------------------------
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
ATTN:
-------------------------------
RE: divine, inc.
Ladies and Gentlemen:
We are counsel to divine, inc., a Delaware corporation (the "COMPANY"), and
have represented the Company in connection with that certain Securities Purchase
Agreement and that certain Second Amended and Restated Securities Purchase
Agreement (collectively, the "PURCHASE AGREEMENTS") each entered into by and
among the Company and the buyers named therein (collectively, the "HOLDERS")
pursuant to which the Company issued to the Holders shares of its Series B
Convertible Preferred Stock, par value $0.001 per share (the "SERIES B PREFERRED
SHARES"), and shares of its Series B-1 Convertible Preferred Stock, par value
$0.001 per share (the "SERIES B-1 PREFERRED SHARES" and, together with the
Series B Preferred Shares, the "PREFERRED SHARES"), respectively, which are
convertible into shares of the Company's Class A Common Stock, par value $0.001
per share (the "COMMON STOCK"). Pursuant to the Second Amended and Restated
Securities Purchase Agreement, the Company also has entered into an Amended and
Restated Registration Rights Agreement with the Holders (the "REGISTRATION
RIGHTS AGREEMENT") pursuant to which the Company agreed, subject to the terms
and conditions thereof, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement), including the
shares of Common Stock issuable upon conversion of the Preferred Shares, under
the Securities Act of 1933, as amended (the "1933 ACT"). In connection with the
Company's obligations under the Registration Rights Agreement, on _____________,
200_, the Company filed a Registration Statement on Form S-3 (File No.
333-_____________) (the "REGISTRATION STATEMENT") with the Securities and
Exchange Commission (the "SEC") relating to the Registrable Securities subject
to the Conversion Notice attached hereto which names each of the Holders as a
selling stockholder thereunder.
In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities subject to the Conversion Notice attached hereto are available for
resale under the 1933 Act pursuant to the Registration Statement.
Very truly yours,
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
By:
-----------------------------------
cc: [LIST NAMES OF HOLDERS]
