AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT Dated as of August 27, 2009 by and among XStream Systems, Inc. and the Investors named herein
Exhibit
4.3
EXECUTION COPY
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
Dated as of August 27, 2009
by and among
XStream Systems, Inc.
and
the Investors named herein
TABLE OF CONTENTS
| 1. | Demand Registrations | 2 | ||||||
| (a) | Requests for Registration | 2 | ||||||
| (b) | Short-Form Registrations | 2 | ||||||
| (c) | Number of Registrable Securities | 2 | ||||||
| (d) | Priority on Demand Registrations | 2 | ||||||
| (e) | Selection of Underwriters | 3 | ||||||
| (f) | Other Registration Rights | 3 | ||||||
| 2. | Piggyback Registrations | 3 | ||||||
| (a) | Right to Piggyback | 3 | ||||||
| (b) | Priority on Primary Registrations | 3 | ||||||
| (c) | Priority on Secondary Registrations | 4 | ||||||
| 3. | Holdback Agreements | 4 | ||||||
| (a) | General | 4 | ||||||
| (b) | Material Development Condition | 4 | ||||||
| 4. | Registration Procedures | 5 | ||||||
| (a) | General | 6 | ||||||
| 5. | Registration Expenses | 8 | ||||||
| (a) | Payment | 8 | ||||||
| (b) | Reimbursement | 8 | ||||||
| 6. | Indemnification | 8 | ||||||
| (a) | Company | 8 | ||||||
| (b) | Holders | 9 | ||||||
| (c) | Notice | 10 | ||||||
| (d) | Survival | 10 | ||||||
| 7. | Participation in Underwritten Registrations | 10 | ||||||
| (a) | General | 10 | ||||||
| (b) | Regulation M | 11 | ||||||
| (c) | Suspension | 11 | ||||||
| 8. | Current Public Information | 11 | ||||||
| 9. | Termination of Rights Hereunder | 11 | ||||||
| 10. | Definitions | 11 | ||||||
| 11. | Miscellaneous | 15 | ||||||
| (a) | No Inconsistent Agreements | 15 | ||||||
| (b) | Remedies | 15 | ||||||
| (c) | Amendments and Waivers | 15 | ||||||
| (d) | Successors and Assigns | 15 | ||||||
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| (e) | Severability | 15 | ||||||
| (f) | Counterparts and Gender References | 15 | ||||||
| (g) | Headings; Exhibits | 16 | ||||||
| (h) | Governing Law | 16 | ||||||
| (i) | Notices | 16 | ||||||
| (j) | Submission to Jurisdiction; Waiver of Jury Trial | 16 | ||||||
| (k) | Aggregation of Stock | 17 | ||||||
| (l) | Assignment of Registration Rights | 17 | ||||||
| (m) | Xxxxxxxxx Xxxxxxx Represents the Company | 17 | ||||||
| Schedules and Exhibits | ||||||||
| Schedule I | Investors | |||||||
| Exhibit A | Form of Joinder Agreement | |||||||
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AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of
August 27, 2009 by and among XStream Systems, Inc., a Delaware corporation (the “Company”), and the
Persons named on Schedule I attached hereto as Investors (individually an “Investor” and
collectively the “Investors”).
RECITALS
WHEREAS, pursuant to the Original Purchase Agreement, on the First Closing Date certain of the
Investors purchased shares of the Series A Preferred Stock (the “First Round Investors”);
WHEREAS, pursuant to the Original Purchase Agreement, on the Second Closing Date certain of
the Investors purchased Series B Units (the “Second Round Investors”);
WHEREAS, pursuant to the Original Purchase Agreement, on the Third Closing Date certain of the
Investors purchased additional Series B Units (the “Third Round Investors”);
WHEREAS, pursuant to numerous Equity Participation Closings (as defined in the Original
Purchase Agreement), certain of the Investors purchased Series C Units (the “Series C Investors”);
WHEREAS, pursuant to the Series D Preferred Stock Purchase Agreement dated as of the date of
this Agreement (the “Series D Purchase Agreement”), by and among the Company and the Investors
party thereto (the “Series D Investors”), the Series D Investors have purchased shares of the
Company’s Series D Redeemable Convertible Preferred Stock, $.0001 par value per share (the “Series
D Preferred Stock”), together with warrants to purchase shares of Common Stock;
WHEREAS, the Company and the First Round Investors, the Second Round Investors, the Third
Round Investors and the Series C Investors are parties to that certain Registration Rights
Agreement, dated as of the First Closing Date, as amended by that certain First Amendment, dated as
of the Second Closing Date (the “Registration Rights Agreement”);
WHEREAS, the Company, the First Round Investors, the Second Round Investors, the Third Round
Investors and the Series C Investors, desire to amend the Registration Rights Agreement to, among
other things, allow the Series D Investors who are not already parties to the Registration Rights
Agreement to become parties thereto and to include the Series D Preferred Stock and the Series D
Warrants as “Registrable Securities”;
WHEREAS, the execution and delivery of this Agreement by the Company and the holders of at
least a majority of the Registrable Securities is a condition to the obligations of the Series D
Investors under the Series D Purchase Agreement.
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NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Demand Registrations.
(a) Requests for Registration. At any time following the earlier of (i) the fifth
(5th) anniversary of the date hereof and (ii) six (6) months after the Company has
completed its initial public offering of Common Stock pursuant to a registration statement declared
effective under the Securities Act (the “Company’s IPO”), holders holding at least thirty percent
(30%) of the Registrable Securities (collectively, the “Thirty Percent Holders”) may request
registration under the Securities Act of all or a portion of their Registrable Securities (provided
that the aggregate offering price of the Registrable Securities to be registered is at least
$30,000,000) on Form S-1 or any similar long-form registration (“Long-Form Registration”) or, if
available, holders holding at least fifty percent (50%) of the Registrable Securities
(collectively, the “Majority Holders”) may, subject to Section 1(b), request registration
under the Securities Act of all or a portion of their Registrable Securities on Form S-3 or any
similar short-form registration (“Short-Form Registration”). All registrations requested pursuant
to this Section 1(a) and 1(b) are collectively referred to herein as “Demand
Registrations”. The Thirty Percent Holders shall be entitled to request two (2) Demand
Registrations under this Section 1(a). Any Demand Registration shall be an underwritten
registration if requested by the holders.
(b) Short-Form Registrations. In addition to the Long-Form Registration provided pursuant
to Section 1(a), the Majority Holders shall be entitled to that number of Short-Form
Registrations as described below; provided that (i) the aggregate offering price of the Registrable
Securities to be registered is at least $1,000,000 for each registration and (ii) the Company shall
not be required to cause more than three (3) such Short-Form Registrations to become effective in
any twelve (12) month period. Demand Registrations shall be Short-Form Registrations whenever the
Company is permitted to use Form S-3 or any other similar short-form registration. After the
Company has become subject to the reporting requirements of the Exchange Act, the Company shall use
its commercially reasonable efforts to make Short-Form Registrations available for the sale of
Registrable Securities.
(c) Number of Registrable Securities. Each request for a Demand Registration shall
specify the approximate number of Registrable Securities requested to be registered and the
anticipated per share price range for such offering. Within ten (10) days after receipt of any
request for a Demand Registration, the Company will give written notice of such requested
registration to all other holders of Registrable Securities and, subject to Section 1(d)
below, will include in such registration all Registrable Securities with respect to which the
Company has received written requests for inclusion therein within fifteen (15) days after the
receipt of the Company’s notice. The Company will pay all Registration Expenses in connection with
any Demand Registration.
(d) Priority on Demand Registrations. The Company will not include in any Demand
Registration any securities that are not Registrable Securities without the prior written consent
of the holders of a majority of the Registrable Securities included in such registration. If a
Demand Registration is an underwritten offering and the managing underwriters advise the
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Company in writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering, exceeds the number
of Registrable Securities and other securities, if any, which can be sold therein without adversely
affecting the marketability of the offering, the Company will include in such registration, prior
to the inclusion of any securities that are not Registrable Securities, the number of Registrable
Securities requested to be included that in the opinion of such underwriters can be sold without
adversely affecting the marketability of the offering and within the price range of such offering,
pro rata among the respective holders of such Registrable Securities on the basis of the number of
shares of Registrable Securities that such holder has requested to be included in such
registration.
(e) Selection of Underwriters. Holders of a majority of the Registrable Securities to be
included in a Demand Registration shall have the right to select the investment banker(s) and
managing underwriter(s) to administer an offering initiated as a Demand Registration, subject to
the Company’s approval which shall not be unreasonably withheld.
(f) Other Registration Rights. The Company shall not grant to any Persons the right to
request the Company to register any equity securities of the Company, or any securities convertible
or exchangeable into or exercisable for such securities, without the prior written consent of the
holders of a majority of the Registrable Securities.
2. Piggyback Registrations.
(a) Right to Piggyback. Whenever the Company proposes to register any of its securities
under the Securities Act (other than pursuant to a Demand Registration, which shall be governed by
Section 1, or a registration on Form S-4 or Form S-8 or any successor or similar forms) and
the registration form to be used may be used for the registration of Registrable Securities (a
“Piggyback Registration”), whether or not for sale for its own account, the Company will give
prompt written notice to all holders of Registrable Securities of its intention to effect such a
registration and, subject to Sections 2(b) and 2(c), shall include in such
registration all Registrable Securities with respect to which .the Company has received
written requests for inclusion therein within fifteen (15) days after delivery of the Company’s
notice.
(b) Priority on Primary Registrations. If a Piggyback Registration is an underwritten
primary registration on behalf of the Company, and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering without adversely affecting the
marketability of such offering, then the Company will include in such registration (a) first, the
securities the Company proposes to sell, (b) second, the Registrable Securities requested to be
included in such registration, pro rata among the holders of such securities on the basis of the
number of securities so requested to be included therein owned by each such holder and (c) third,
other securities requested to be included in such registration, pro rata among the holders of such
securities on the basis of the number of securities so requested to be included therein owned by
each such holder. Notwithstanding the foregoing, the holders of Registrable Securities shall be
entitled to include in any primary registration of the Company’s securities at least thirty percent
(30%) of the aggregate amount of the securities registered in such registration; provided that this
sentence will not apply to the registration for the Company’s
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IPO if no securities other than those sold on behalf of the Company and the holders of
Registrable Securities are included in such registration.
(c) Priority on Secondary Registrations. If a Piggyback Registration is an underwritten
secondary registration on behalf of holders of the Company’s securities other than holders of
Registrable Securities, and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration exceeds the number
which can be sold in such offering without adversely affecting the marketability of the offering,
then the Company shall include in such registration (a) first, the securities requested to be
included therein by the holders requesting such registration and the Registrable Securities
requested to be included in such registration, pro rata among the holders of such securities on the
basis of the number of securities so requested to be included therein owned by each such holder and
(b) second, other securities requested to be included in such registration, pro rata among the
holders of such securities on the basis of the number of securities so requested to be included
therein owned by each such holder.
3. Holdback Agreements.
(a) General. The Company (i) shall not effect any public sale or distribution of its
equity securities, or any securities convertible into or exchangeable or exercisable for such
securities (except pursuant to registrations on Form X-0, Xxxx X-0 or any successor forms), during
(A) with respect to the Company’s IPO, the one hundred eighty (180) day period beginning on the
effective date of the registration statement relating thereto (unless the managing underwriters
otherwise agree) and (B) with respect to any underwritten Demand Registration or any underwritten
Piggyback Registration, the ninety (90) day period beginning on the effective date of the
registration statement relating thereto, and (ii) shall use all commercially reasonable efforts to
cause each holder of its Common Stock, or any securities convertible into or exchangeable or
exercisable for Common Stock (on a fully-diluted basis), other than Common Stock or any such
securities purchased in the open market or pursuant to Rule 144 adopted by the Securities and
Exchange Commission (“SEC”) under the Securities Act (as such may be amended from time to time)
(“Rule 144”), to agree not to effect any public sale or distribution (including sales pursuant to
Rule 144) of any such securities during such period, in each case except as part of such
underwritten registration, and in each case unless the underwriters managing the registered public
offering otherwise agree.
(b) Material Development Condition.
(i) With respect to any registration statement filed or to be filed pursuant to a
Demand Registration or a Piggyback Registration, if the Board of Directors of the Company
determines in good faith that it would (because of the existence of any acquisition or
corporate reorganization or other transaction, financing activity or other development
involving the Company) be materially detrimental (a “Material Development Condition”) to the
Company for such a registration statement to be filed, to become effective or to be
maintained effective or for sales of Registrable Securities to continue pursuant to the
registration statement, the Company shall be entitled, upon the giving of a written notice
that a Material Development Condition has occurred (a “Delay
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Notice”) from an officer of the Company to any holder included or to be included in
such registration statement,
(1) to cause sales of Registrable Securities by such holder pursuant to such
registration statement to cease,
(2) to cause such registration statement to be withdrawn and the effectiveness
of such registration statement terminated, or
(3) in the event no such registration statement has yet been filed or declared
effective, to delay filing or effectiveness of any such registration statement
until, in the good faith judgment of the Company, such Material Development
Condition no longer exists (notice of which the Company shall promptly deliver to
any holder of Registrable Securities with respect to which any such registration
statement has been filed).
(ii) Notwithstanding the foregoing provisions of this Section 3(b):
(1) the Company agrees to make all necessary disclosure of the existence or
occurrence of the circumstances giving rise to a Material Development Condition as
promptly as is reasonably practicable and to use all commercially reasonable efforts
to minimize the duration of such cessation or delay, which period shall in no event
exceed sixty (60) consecutive days from the sending of its Delay Notice to a holder
or holders of Registrable Securities with respect to such Material Development
Condition;
(2) in the event a registration statement is filed and subsequently withdrawn
by reason of any existing or anticipated Material Development Condition as
hereinbefore; provided that the Company shall cause a new registration statement
covering the same Registrable Securities as those covered by the original
registration statement to be filed with the SEC as soon as practicable after such
Material Development Condition expires or, if sooner, not later than the expiration
of such sixty (60) day period referred to in clause (1) above;
(3) in the event the Company elects not to withdraw or terminate the
effectiveness of any such registration statement but to cause a holder or holders to
refrain from selling Registrable Securities for any period during the Registration
Period (as defined below), the Registration Period with respect to such holders and
such Registrable Securities shall be extended by the number of days during the
Registration Period that such holders are required to refrain from selling
Registrable Securities; and
(4) the Company may only send or impose one (1) Delay Notice during any period
of twelve (12) consecutive months.
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4. Registration Procedures.
(a) General. Whenever the holders of Registrable Securities have requested that any
Registrable Securities be registered pursuant to this Agreement, the Company will use its
reasonable best efforts to effect the registration of such Registrable Securities in accordance
with the intended method of disposition thereof, and pursuant thereto the Company will as
expeditiously as possible:
(i) prepare and file with the SEC a registration statement with respect to such
Registrable Securities and thereafter use its reasonable best efforts and take all necessary
action to cause such registration statement to become effective;
(ii) prepare and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective for a period of either (A) not less than six (6) months
(subject to extension pursuant to Section 7(c) below) or (B) such shorter period as
will terminate when all of the securities covered by such registration statement have been
disposed of in accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement (but in any event not before the expiration
of any longer period required under the Securities Act) (the “Registration Period”), and to
comply with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement until such time as all of such securities
have been disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in the registration statement;
(iii) furnish to each seller of Registrable Securities such number of copies of such
registration statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus) and such other documents
as such seller may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such seller;
(iv) use commercially reasonable efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as any seller
reasonably requests and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller of Registrable Securities to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such seller
(provided, however, that the Company will not be required to (A) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify but for
this subparagraph, (B) subject itself to taxation in any such jurisdiction or (C) consent to
general service of process in any such jurisdiction);
(v) notify each seller of such Registrable Securities at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, upon discovery that,
or upon the discovery of the happening of any event as a result of which, the prospectus
included in such registration statement contains an untrue statement of a material fact or
omits any fact necessary to make the statements therein not misleading in the light of the
circumstances under which they were made, and, at the request of any such seller, the
Company shall prepare and furnish to such seller a reasonable number of
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copies of a supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any fact necessary to make the statements
therein not misleading;
(vi) cause all such Registrable Securities to be listed on each securities exchange on
which similar securities issued by the Company are then listed and, if not so listed, to be
listed on a national securities exchange or over-the-counter market and, if listed on the
FINRA automated quotation system, use all commercially reasonable efforts to secure
designation of all such Registrable Securities covered by such registration statement as a
NASDAQ “national market system security” within the meaning of Rule 11Aa2-1 of the Exchange
Act or, failing that, to secure NASDAQ authorization for such Registrable Securities;
(vii) provide a transfer agent and registrar for all such Registrable Securities not
later than the effective date of such registration statement;
(viii) enter into such customary agreements (including underwriting agreements) and
take all such other actions as the holders of a majority of the Registrable Securities being
sold or the underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities (including, without limitation, effecting a stock
split or a combination of shares prior to the Company’s IPO);
(ix) upon reasonable notice and during normal business hours, make available for
inspection by any seller of Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement and any attorney, accountant or other
agent retained by any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, in each case, reasonably required to
conduct due diligence or otherwise in connection with an underwritten offering, and cause
the Company’s officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement, subject to such underwriter, attorney,
accountant or other agent being bound by reasonable agreements or duties of confidentiality;
(x) otherwise use commercially reasonable efforts to comply with all the applicable
rules and regulations of the SEC, and to make generally available to its security holders,
as soon as reasonably practicable, an earnings statement covering the period of at least
twelve (12) months beginning with the first day of the Company’s first full calendar quarter
after the effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(xi) permit any holder of Registrable Securities which holder, in its reasonable
judgment, might be deemed to be an underwriter or a controlling person of the Company, to
participate in the preparation of such registration or comparable statement and to require
the insertion therein of material, furnished to the Company in writing,
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which in the reasonable judgment of such holder and its counsel should be included and
which are acceptable to the Company (which approval shall not be unreasonably withheld); and
(xii) in the event of the issuance of any stop order suspending the effectiveness of a
registration statement, or of any order suspending or preventing the use of any related
prospectus or suspending the qualification of any Common Stock included in such registration
statement for sale in any jurisdiction, upon receiving notice or obtaining knowledge
thereof, the Company will use all commercially reasonable efforts promptly to obtain the
withdrawal of such order.
5. Registration Expenses.
(a) Payment. All reasonable and customary expenses incident to the Company’s performance
of or compliance with this Agreement (whether with respect to a Demand Registration or Piggyback
Registration), including, without limitation, all registration and filing fees, fees of any
transfer agent and registrar, fees and expenses of compliance with securities or blue sky laws,
printing expenses, FINRA fees and expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and its independent certified public accountants and other
Persons retained by the Company (all such expenses being herein called “Registration Expenses”),
but excluding underwriting discounts and commissions, shall be borne by the Company;
provided that a Demand Registration which is withdrawn at the sole request of the holders
of a majority of the Registrable Securities who demanded such Demand Registration will not count as
a Demand Registration if the Company is reimbursed by such holders for all reasonable out-of-pocket
expenses incurred by the Company in connection with such registration; provided, further,
however, that if at the time of such withdrawal, the holders of such Registrable Securities have
learned of a material adverse change in the condition, business, or prospects of the Company from
that known to such holders at the time of their request and have withdrawn the request with
reasonable promptness after learning of such information, then the holders of such Registrable
Securities shall not be required to pay any of such expenses and the Demand Registration that was
withdrawn shall not count as one of the permitted Demand Registrations hereunder.
(b) Reimbursement. In connection with each Demand Registration and each Piggyback
Registration, the Company shall reimburse the holders of Registrable Securities covered by such
registration for the reasonable fees and disbursements of one (1) counsel chosen by the holders of
a majority of the Registrable Securities covered by such registration.
6. Indemnification. In the event that any Registrable Securities are included in an
effective registration statement under Section 1 or 2:
(a) Company. The Company agrees to indemnify and hold harmless, to the extent permitted
by law, each holder of Registrable Securities, such holder’s officers and directors and each Person
who controls such holder (within the meaning of the Securities Act) against any losses, claims,
damages, liabilities (joint or several) and expenses to which such holder or any such director or
officer or controlling person may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or
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actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or
are based upon (i) any untrue or alleged untrue statement of a material fact contained in any
registration statement, prospectus or preliminary prospectus or any 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 Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Securities Act, the Exchange Act or any state securities law in
connection with the offering covered by such registration statement, and the Company shall
reimburse such holder and each such director, officer and controlling Person for all reasonable
legal and any other reasonable expenses incurred by them in connection with investigating or
defending any such loss, claim, liability, expenses, action or proceeding; provided, however, that
the Company shall not be liable in any such case to the extent that any such loss, claim, damage,
liability or expense (or action or proceeding in respect thereof) arises out of or is based upon an
untrue statement or alleged untrue statement of a material fact, or omission or alleged omission of
a material fact, made in such registration statement, any such prospectus or preliminary prospectus
or any amendment or supplement thereto, in reliance upon, and in conformity with, written
information prepared and furnished to the Company by such holder for use therein or by such
holder’s failure to deliver a copy of the registration statement prospectus or any amendments or
supplements thereto after the Company has furnished such holder with a sufficient number of copies
of the same. In connection with an underwritten offering, the Company will indemnify such
underwriters, their officers and directors and each Person who controls such underwriters (within
the meaning of the Securities Act) to the same extent as provided above with respect to the
indemnification of the holders of Registrable Securities.
(b) Holders. In connection with any registration statement in which a holder of
Registrable Securities is participating, each such holder shall furnish to the Company in writing
such information and affidavits as the Company reasonably requests for use in connection with any
such registration statement or prospectus and, to the extent permitted by law, shall indemnify and
hold harmless the Company, its directors and officers and each other Person who controls the
Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities
and expenses, to which the Company or any such director or officer or controlling Person may become
subject under the Securities Act or otherwise, to the extent that such losses, claims, damages,
liabilities or expenses (or actions or proceedings, whether commenced or threatened, in respect
thereof) result from (i) any untrue or alleged untrue statement of a material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement
thereto, but only to the extent that such untrue statement is contained in such registration
statement, any such prospectus or preliminary prospectus or any amendment or supplement thereto, in
reliance upon and in conformity with written information prepared and furnished to the Company by
such holder for use therein, (ii) any omission or alleged omission of a material fact required to
be stated therein or necessary to make the statements therein not misleading, but only to the
extent that such untrue statement or omission is made in such registration statement, any such
prospectus or preliminary prospectus or any amendment or supplement thereto, in reliance upon and
in conformity with written information prepared and furnished to the Company by such holder for use
therein or (iii) any violation or alleged violation by the holder of Registrable Securities of the
Securities Act, but only to the extent that such violation or alleged violation relates to written
information prepared
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and furnished to the Company by such holder for use in such registration statement, prospectus
or preliminary prospectus, and such holder shall reimburse the Company and each such director,
officer and controlling Person for all reasonable legal and any other reasonable expenses incurred
by them in connection with investigating or defending any such loss, claim, damage, liability,
expense, action or proceeding; provided, however, that the obligation to indemnify shall be several
and not joint, for each holder of Registrable Securities, and shall be limited to the net amount of
proceeds received by such holder from the sale of Registrable Securities pursuant to such
registration statement.
(c) Notice. Any Person entitled to indemnification hereunder will (1) give prompt written
notice to the indemnifying party of any claim with respect to which it seeks indemnification and
(ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying
party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified
party; provided, that the indemnified party may participate in such defense at such party’s
expense. If such defense is assumed, the indemnifying party may 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 (with the written advice of counsel) of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such indemnified parties with
respect to such claim. The failure of an indemnified party to give written notice promptly as
required by this subsection (c) shall not affect such indemnified party’s rights under this
Section 6 except to the extent such failure is actually prejudicial to the rights and
obligations of the indemnifying party.
(d) Survival. The indemnification 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. The Company also agrees to make such provisions, as are reasonably requested by any
indemnified party, for contribution to such party in the event the Company’s indemnification is
unavailable for any reason.
7. Participation in Underwritten Registrations.
(a) General. No Person may participate in any registration hereunder which is
underwritten unless such Person (i) cooperates with the Company as reasonably requested by the
Company in the connection with the preparation of the registration statement, and for so long as
the Company is obligated to file and keep effective the registration statement, provides to the
Company, in writing, for use in the registration statement, all such information regarding such
Person and its plan of distribution of the Registrable Securities as may be reasonably necessary to
enable the Company to prepare the registration statement and prospectus covering the Registrable
Securities, to maintain the currency of and effectiveness thereof and otherwise to comply with all
applicable requirements of law in connection therewith, (ii) agrees to sell such Person’s
securities on the basis provided in any underwriting arrangements approved by the Person or Persons
entitled hereunder to approve such arrangements (including, without
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limitation, pursuant to the terms of any over-allotment or “green shoe” option requested by
the managing underwriter(s)), except that no holder of Registrable Securities shall be required to
sell more than the number of Registrable Securities that such holder has requested the Company to
include in any registration, and (iii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably required under the
terms of such underwriting arrangements; provided that no holder of Registrable Securities included
in any underwritten registration shall be required to make any representations or warranties to the
Company or the underwriters other than representations and warranties regarding such holder and
such holder’s intended method of distribution.
(b) Regulation M. During such time as a holder of Registrable Securities may be engaged
in a distribution of the Registrable Securities, such holder shall comply with Regulation M
promulgated under the Exchange Act and pursuant thereto it shall, among other things, (i) not
engage in any stabilization activity in connection with the securities of the Company in
contravention of such regulation and (ii) distribute the Registrable Securities under the
registration statement solely in the manner described in the registration statement.
(c) Suspension. Each Person that is participating in any registration hereunder agrees
that, upon receipt of any notice from the Company of the happening of any event of the kind
described in Section 4(a)(v) above, such Person will forthwith discontinue the disposition
of its Registrable Securities, as the case may be, pursuant to the registration statement until
such Person’s receipt of the copies of a supplemented or amended prospectus as contemplated by such
Section 4(a)(v). In the event the Company shall give any such notice pursuant to this
subsection (c), the applicable time period mentioned in Section 4(a)(ii) during which a
Registration Statement is to remain effective shall be extended by the number of days during the
period from and including the date of the giving of such notice to and including the date when each
seller of Registrable Securities covered by such registration statement shall have received the
copies of the supplemented or amended prospectus contemplated by Section 4(a)(v).
8. Current Public Information. At all times after the Company has filed a registration
statement with the SEC which has become effective pursuant to the requirements of either the
Securities Act or the Exchange Act, the Company will file all reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC
thereunder, and will take such further action as any holder or holders of Registrable Securities
may reasonably request, all to the extent required to enable such holders to sell Registrable
Securities pursuant to Rule 144 or any similar rule or regulation hereafter adopted by the SEC.
9. Termination of Rights Hereunder. The rights set forth in Section 1 or
2 shall terminate three (3) years following the consummation of the Company’s IPO, provided
that the Company is then subject to the reporting requirements of Section 12 or 15(d) of the
Exchange Act.
10. Definitions.
“Affiliate” means as to any Person (a) any Person which directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control with
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such Person; (b) any Person who is a director, partner, member or officer (i) of such Person,
or (ii) of any Person described in clause (a) above; or (c) any Person who is related to a Person
described in clauses (a) or (b) above by blood or marriage. For purposes of this definition,
“control” shall include the ownership of 10% or more of the voting securities of such Person.
“Agreement” has the meaning specified in the preamble.
“Common Stock” means the common stock, $.0001 par value per share, of the Company.
“Company” has the meaning specified in the preamble.
“Company’s IPO” has the meaning specified in Section 1(a).
“Delay Notice” has the meaning specified in Section 3(b).
“Demand Registrations” has the meaning specified in Section 1(a).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“First Closing Date” means March 14, 2007.
“First Round Investors” has the meaning specified in the recitals and includes any Permitted
Transferees (as defined in the Shareholders Agreement).
“GT” has the meaning specified in Section 11(m).
“Investor” and “Investors” have the respective meanings specified in the preamble.
“Long-Form Registration” has the meaning specified in Section 1(a).
“Majority Holders” has the meaning specified in Section 1(a).
“Material Development Condition” has the meaning specified in Section 3(b).
“Original Purchase Agreement” means the Series A Preferred Stock Purchase Agreement, dated as
of the First Closing Date, as amended by a First Amendment dated as of Second Closing Date, as
further amended by a Second Amendment dated as of the Third Closing Date, as further amended by a
Third Amendment dated as of October 16, 2008 and as further amended by a Fourth Amendment dated as
of February 26, 2009, by and among the Company and the purchasers of the securities named therein
(as the same may be amended, modified, restated or replaced).
“Person” means any individual, corporation, partnership, company, limited liability company,
joint venture, association, bank, business trust or other entity, whether or not legal entities, or
any governmental entity or agency or political subdivision thereof.
“Piggyback Registration” has the meaning specified in Section 2(a).
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“Preferred Stock” means the Company’s (i) Series A Redeemable Convertible Preferred Stock,
$.0001 par value per share, (ii) Series B Redeemable Convertible Preferred Stock, $.0001 par value
per share, (iii) Series C Redeemable Convertible Preferred Stock, $.0001 par value per share and
(iv) Series D Redeemable Convertible Preferred Stock, $.0001 par value per share.
“Registrable Securities” means (i) any Common Stock issued or issuable upon the conversion or
redemption of the Preferred Stock or any Warrants, (ii) any Common Stock issued or issuable
directly or indirectly with respect to the securities referred to in clause (i) by way of stock
dividend, stock conversion or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization and (iii) any other shares of
Common Stock held by Persons holding securities described in clause (i). As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities (x) when they have
been distributed to the public pursuant to an offering registered under the Securities Act, (y)
when they have been sold to the public through a broker, dealer or market maker in compliance with
Rule 144 under the Securities Act (or any similar rule then in force) or (z) when they may be sold
without registration in compliance with Rule 144(k) under the Securities Act (or any similar rule
then in force). For purposes of this Agreement, a Person shall be deemed to be the holder of
Registrable Securities, and the Registrable Securities shall be deemed to be outstanding and in
existence, whenever such Person has the right to acquire such Registrable Securities upon
conversion of Preferred Stock, exercise of Warrants or conversion or exercise of any other
securities held by such Person, whether or not such acquisition has actually been effected, and
such Person shall be entitled to exercise the rights of a holder of such Registrable Securities
hereunder.
“Registration Expenses” has the meaning specified in Section 5(a).
“Registration Period” has the meaning specified in Section 4(a)(ii).
“Registration Rights Agreement” has the meaning specified in the recitals.
“Rule 144” has the meaning specified in Section 3(a).
“SEC” has the meaning specified in Section 3(a).
“Second Closing Date” means December 19, 2007.
“Second Round Investors” has the meaning specified in the recitals and includes any Permitted
Transferees (as defined in the Shareholders Agreement).
“Securities Act” means the Securities Act of 1933, as amended.
“Series A Preferred Stock” means the Series A Redeemable Convertible Preferred Stock, $.0001
par value per share of the Company.
“Series B Preferred Stock” means the Series B Redeemable Convertible Preferred Stock, $.0001
par value per share of the Company.
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“Series B Unit” means one Series B Preferred Share and five (5) Series B Warrants.
“Series B Warrant” means a warrant to purchase one share of Common Stock in the form attached
as Exhibit A to the Series B Warrant Agreement.
“Series B Warrant Agreement” means the Amended and Restated Series B Warrant Agreement, dated
as of the date of this Agreement, by and among the Company and the holders thereof.
“Series C Investors” has the meaning specified in the recitals and includes any Permitted
Transferees (as defined in the Shareholders Agreement).
“Series C Preferred Stock” means the Series C Redeemable Convertible Preferred Stock, $.0001
par value per share of the Company.
“Series C Unit” means one Series C Preferred Share and five (5) Series C Warrants.
“Series C Warrant” means a warrant to purchase one share of Common Stock in the form attached
as Exhibit A to the Series C Warrant Agreement.
“Series C Warrant Agreement” means the Amended and Restated Series C Warrant Agreement, dated
as of the date of this Agreement, by and among the Company and the holders thereof.
“Series D Investors” has the meaning specified in the recitals and includes any Permitted
Transferees (as defined in the Shareholders Agreement).
“Series D Preferred Stock” has the meaning specified in the recitals.
“Series D Purchase Agreement” has the meaning specified in the recitals (as the same may be
amended, modified, restated or replaced).
“Series D Warrant” means a warrant to purchase one share of Common Stock in the form attached
as Exhibit A to the Series D Warrant Agreement.
“Series D Warrant Agreement” means the Series D Warrant Agreement, dated as of the date of
this Agreement, by and among the Company and the Series D Investors.
“Shareholders Agreement” means the Second Amended and Restated Securityholders’ Agreement,
dated as of the date of this Agreement, by and among the Company and the securityholders of the
Company named therein (as the same may be amended, modified, restated or replaced).
“Short-Form Registration” has the meaning specified in Section 1(a).
“Third Closing Date” means May 30, 2008.
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“Third Round Investors” has the meaning specified in the recitals and includes any Permitted
Transferees (as defined in the Shareholders Agreement).
“Thirty Percent Holders” has the meaning specified in Section 1(a).
“Warrants” means the Series B Warrants, the Series C Warrants and the Series D Warrants.
11. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not hereafter enter into any agreement
with respect to its securities which is inconsistent with or violates the rights granted to the
holders of Registrable Securities in this Agreement.
(b) Remedies. Any Person having rights under any provision of this Agreement shall be
entitled to enforce such rights specifically to recover damages caused by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law. The parties hereto
agree and acknowledge that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that any party may in its sole discretion apply to any court of
law or equity of competent jurisdiction (without posting any bond or other security) for specific
performance and for other injunctive relief in order to enforce or prevent violation of the
provisions of this Agreement; provided, however, that no party hereto shall have any right to
obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this
Agreement as a result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
(c) Amendments and Waivers. Except as otherwise provided herein, the provisions of this
Agreement may be amended or waived only upon the prior written consent of the Company and the
holders of a majority of the Registrable Securities.
(d) Successors and Assigns. Subject to Section 11(l), this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties hereto and their
respective legal successors and assigns.
(e) Severability. If any provision of this Agreement shall be held to be illegal, invalid
or unenforceable, such illegality, invalidity or unenforceability shall attach only to such
provision and shall not in any manner affect or render illegal, invalid or unenforceable any other
provision of this Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
(f) Counterparts and Gender References. This Agreement may be executed in several
counterparts (including by means of separate signature pages, which may be attached hereto) by one
or more of the parties, each of which shall be deemed an original, and all of said counterparts
(and signature pages) shall be deemed to constitute or be part of one and the same instrument. One
or more counterparts of this Agreement may be delivered by facsimile or electronically with the
intention that delivery by such means shall have the same effect as delivery of an original
counterpart thereof. All gender references shall be deemed modified to fit the context.
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(g) Headings; Exhibits. The headings or other subdivisions in this Agreement are intended
solely for convenience or reference and shall be given no effect in the construction or
interpretation of this Agreement.
(h) Governing Law. The internal law of the State of Florida will govern all questions
concerning the construction, validity and interpretation of this Agreement, without regard to the
choice of law provisions of such state or any other state.
(i) Notices. All notices or other communications required or permitted hereunder shall be
in writing and shall be deemed given or delivered (a) when delivered personally, (b) if transmitted
by facsimile when confirmation of transmission is received, (c) if sent by registered or certified
mail, postage prepaid, return receipt requested, three (3) business days after mailing or (d) if
sent by reputable overnight courier service, one business day after delivery to such service, and
shall be addressed as follows:
If to the Company, to:
| XStream Systems, Inc. 00000 000xx Xxxxxxx Xxxxx 000 Xxxxxxxxx, XX 00000 Attention: Chief Executive Officer Facsimile: (000) 000-0000 |
with a copy to:
| Xxxxxxxxx Xxxxxxx, P.A. 0000 Xxxx Xxxxxx Xxxxxx Xxxxx 000 Xxxx Xxxxx, XX 00000 Attention: Xxxxx X. Xxxxxxx Facsimile: (000) 000-0000 |
If to any Investor, to such Investor’s address as set forth on Schedule I
hereto.
Any party may change the name and address of the designee to whom notice shall be sent by
giving written notice of such change to the other parties hereto.
(j) Submission to Jurisdiction; Waiver of Jury Trial.
(i) Each of the parties hereto hereby irrevocably submits in any suit, action or
proceeding arising out of or related to this Agreement, or any of the transactions
contemplated hereby, to the exclusive jurisdiction of the United States District Court for
the Southern District of Florida and the jurisdiction of any court of the State of Florida
located in Indian River County, Florida and, to the extent permissible by law, waives any
and all claims and objections that any such court is an inconvenient forum.
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(ii) EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY IN
ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN OR AMONG. ANY OF THE
PARTIES ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR ANY
OTHER INSTRUMENT OR DOCUMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH. ANY
PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(k) Aggregation of Stock. All shares of Registrable Securities held or acquired by
affiliated Persons or Persons under common management or control shall be aggregated together for
the purpose of determining the availability of any rights under this Agreement.
(l) Assignment of Registration Rights. The rights to cause the Company to register
Registrable Securities pursuant to Sections 1 and 2 may be assigned (but only with
all related obligations) by a holder to a transferee or assignee of such Registrable Securities
that is a Permitted Transferee (as defined in the Shareholders Agreement) of such holder; provided
that (A) the Company is, within a reasonable time after such transfer, furnished with written
notice of the name and address of such transferee or assignee and the Registrable Securities with
respect to which such rights are being assigned and (B) such transferee or assignee agrees in
writing to be bound by and subject to the terms and conditions of this Agreement in the form of
Joinder Agreement attached hereto as Exhibit A. For the purposes of determining the number
of shares of Registrable Securities held by a transferee or assignee, the holdings of a transferee
or assignee (1) that is a subsidiary, parent, partner, limited partner, retired partner, member,
retired member or stockholder of a holder, (2) that is an Affiliate of the holder, (3) who is a
holder’s immediate family member or (4) that is a trust for the benefit of an individual holder or
such holder’s immediate family member, shall be aggregated together and with those of the assigning
holder; provided that all transferees and assignees who would not qualify individually for
assignment of registration rights shall have a single attorney-in-fact for the purpose of
exercising any rights, receiving notices or taking any action under Sections 1 and
2. Notwithstanding the foregoing, any transferee of a Warrant shall be entitled to, and
shall become, a party to this Agreement as a condition to the transfer of such Warrant and shall be
considered an “Investor” and a holder of Registrable Securities with the rights and obligations
provided in this Agreement.
(m) Xxxxxxxxx Xxxxxxx Represents the Company. Each of the Investors hereby agrees and
acknowledges that the law firm of Xxxxxxxxx Traurig, P.A. (“GT”), hereby renders advice and counsel
solely to the Company. Each of the Investors hereby agrees and acknowledges that GT has not
represented any of the Investors in connection with this Agreement or any other agreement
contemplated by or in connection with this Agreement or the transactions contemplated by or in
connection with this Agreement, and that EACH OF THE SHAREHOLDERS HAS BEEN AND IS HEREBY ADVISED TO
RETAIN INDEPENDENT COUNSEL to advise each one of them regarding this Agreement and any other
agreement contemplated by this Agreement. Each of the Investors hereby waives, releases and
relinquishes any claim against GT or any of its shareholders, employees or agents from any conflict
of
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interest arising from this Agreement or the transactions contemplated in this Agreement or any
other agreement contemplated by this Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| COMPANY: XSTREAM SYSTEMS, INC. |
||||
| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Secretary | |||
| INVESTORS: |
||||
[Signature Page to A&R Registration Rights Agreement]
