REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated March 8, 2000, is made by and
between U.S. INTERACTIVE, INC., a Delaware corporation (the "Company"), and the
stockholders of the Company listed on Schedule A hereto (the "Stockholders").
RECITALS
WHEREAS, concurrently with this execution of this Agreement, Soft Plus,
Inc., a California corporation ("Soft Plus"), has merged (the "Merger") with and
into First Acquisition Co., a Delaware corporation and a wholly owned subsidiary
of the Company ("Acquisition Co."), pursuant to an Agreement and Plan of Merger
dated February 1, 2000 (the "Merger Agreement"), among the Company, Acquisition
Co., Soft Plus and the stockholders of Soft Plus signatory thereto;
WHEREAS, pursuant to the Merger, each of the Stockholders will receive
shares of the Company's common stock, $.001 par value (the "Common Stock"), in
the amounts set forth opposite the names of the Stockholders on Schedule A
hereto;
WHEREAS, pursuant to Section 9.1 of the Merger Agreement, the Company
and the Stockholders are entering into this Agreement to provide certain
piggyback and S-3 registration rights to the Stockholders with respect to
certain of the shares of Common Stock to be received by such Stockholders
pursuant to the Merger, subject to the limitations and conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing premises and
intending to be legally bound, the parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the meanings
set forth below, and the definitions shall be equally applicable to the singular
and the plural:
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Excluded Registration" shall mean (i) a registration in connection
with a merger, reorganization or exchange offer involving the issuance of the
Company's securities, including without limitation a registration on Form S-4 or
any successor form adopted by the SEC, or (ii) a registration in connection with
a stock option or stock purchase plan or other employee benefit plan of the
Company, including without limitation a registration pursuant to Form S-8 or any
successor form adopted by the SEC.
"Insider Stockholder" shall mean any Stockholder designated as an
"Insider Stockholder" on Schedule A hereto.
"Outside Stockholder" shall mean any Stockholder who is not an Insider
Stockholder or a Principal Stockholder.
"Principal Stockholder" shall mean any Stockholder designated as a
"Principal Stockholder" on Schedule A hereto.
"Register", "registered", and "registration" refer to a registration
effected by preparing and filing a registration statement or similar document in
compliance with the Securities Act and the declaration or ordering of
effectiveness of such registration statement or document by the SEC.
"Registrable Shares" shall have the meaning set forth in Section 2
hereof.
"Securities Act" means the Securities Act of 1933, as amended.
"SEC" means the Securities and Exchange Commission.
2. Piggyback Registration Rights
(a) If the Company proposes to register any of its Common Stock under the
Securities Act (other than an Excluded Registration) in connection with
a firm underwritten public offering of such Common Stock at any time
after the date hereof and prior to the second anniversary hereof (a
"Post-Closing Offering"), then the Stockholders shall have the right,
subject to the limitations and conditions set forth in this Agreement
(including without limitation the underwriting requirements set forth
in Section 6 hereof), to have the following shares of Common Stock
owned by them (such Stockholder's "Registrable Shares") registered
under such registration statement (the "piggyback registration
rights"):
(b) In connection with the Company's first Post-Closing Offering, if any,
after the date hereof and prior to the second anniversary hereof (the
"First Post-Closing Offering"), each Outside Stockholder shall have
piggyback registration rights with respect to thirty percent (30%) of
the lesser of (i) the number of shares of Common Stock issued to such
Outside Stockholder pursuant to the Merger as set forth on Schedule A
hereto which are Registrable Shares, or (ii) the number of shares of
Common Stock owned by such Outside Stockholder which are Registrable
Shares on the date on which the Company files a registration statement
in connection with such First Post-Closing Offering. No Stockholder
other than the Outside Stockholders shall have piggyback registration
rights in connection with a First Post-Closing Offering.
(c) In connection with the Company's second Post-Closing Offering, if any,
after the date hereof and prior to the second anniversary hereof (the
"Second Post-Closing Offering"), (a) each Stockholder (other than a
Principal Stockholder) shall have piggyback registration rights with
respect to thirty-five percent (35%) of the lesser of (i) the number of
shares of Common Stock issued to such Stockholder pursuant to the
Merger as set forth on Schedule A hereto, less any shares of Common
Stock of such Stockholder registered in connection with the First
Post-Closing Offering, which are Registrable Shares or (ii) the number
of shares of Common Stock owned by such Stockholder which are
Registrable Shares on the date on which the Company files a
registration statement in connection with such Second Post-Closing
Offering; and (b) each Principal Stockholder shall have piggyback
registration rights with respect to fifteen percent (15%) of the lesser
of (i) the number of shares of Common Stock issued to such Principal
Stockholder pursuant to the Merger as set forth on Schedule A hereto,
which are Registrable Securities, or (ii) the number of shares of
Common Stock owned by such Principal Stockholder which are Registrable
Securities on the date on which the Company files a registration
statement in connection with such Second Post-Closing Offering.
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(d) A share of Common Stock shall cease to be a Registrable Share when (i)
a registration statement covering such share has been declared
effective by the SEC and such share has been disposed of by a
Stockholder pursuant to such effective registration statement, (ii)
such share is held by the Company or one of its subsidiaries or
otherwise ceases to be outstanding, or (iii) such share may be sold
pursuant to paragraph (k) of Rule 144 of the SEC, if applicable.
(e) If the Company intends to undertake a First Post-Closing Offering or a
Second Post-Closing Offering, the Company shall give written notice of
such intention to each Stockholder owning Registrable Shares with
respect to such Post-Closing Offering by registered or certified mail
at least thirty (30) days prior to the filing of the registration
statement for such Post-Closing Offering. If any such Stockholder
desires to have some or all of his or her Registrable Shares included
in such proposed registration statement, such Stockholder shall make a
written request to the Company not more than twenty (20) days after the
Stockholder's receipt of the notice from the Company. Upon receipt of
timely notice from any such Stockholder, the Company shall afford such
Stockholder the opportunity to have the Registrable Shares of such
Stockholder registered under such registration statement, subject to
the limitations and conditions set forth in this Agreement.
(f) Notwithstanding any provision in this Agreement, the Merger Agreement
or any other agreement to the contrary: (i) the Company shall have no
obligation whatsoever to attempt or undertake any Post-Closing
Offering; (ii) the Company shall have the right at any time after it
has given notice to any Stockholder of its intention to undertake a
Post-Closing Offering, irrespective of whether such Stockholder has
made a written request for inclusion of any of his or her Registrable
Shares, to elect not to file any proposed registration statement or to
withdraw the same after the filing but prior to the effective date
thereof; and (iii) the Stockholders shall not have any piggyback
registration rights with respect to any registration of the Company's
securities other than in connection with a First Post-Closing Offering
or a Second Post-Closing Offering.
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3. Form S-3 Registration
On the sixth month anniversary after the Merger, or soon as reasonably
practicable thereafter, the Company shall effect a registration on Form S-3 of
all First Released Shares (as defined in the Merger Agreement) and any related
qualification or registration required for the offering and sale of such shares
under the securities or blue sky law of states to the extent required by Section
4(e) below. The Company will:
(a) effect such registration and all such qualifications and registrations
as would permit or facilitate the sale and distribution of all First
Released Shares, provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance,
pursuant to this Section 3(a): (i) if Form S-3 is not available for
such offering by the Holders; (ii) if the Company shall furnish to the
Holders a certificate signed by the President of the Company stating
that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its
stockholders for such Form S-3 Registration to be effected at such
time, in which event the Company shall have the right to defer the
filing of the Form S-3 registration statement for a period of not more
than 120 days; provided, however, that the Company shall not utilize
this right more than once in any twelve month period; and
(b) pay all costs (excluding any transfer taxes, fees and expenses of any
Stockholder's counsel, and any underwriting discounts or selling
commissions or other charges of any broker-dealer acting on behalf of
any Stockholder), fees and expenses in connection with all registration
statements filed pursuant to this Section 3 hereof, including without
limitation the Company's legal and accounting fees and expenses,
printing expenses and blue sky fees and expenses.
4. Covenants of the Company with Respect to Registration
In connection with any registration under Section 2 hereof, the Company
covenants and agrees as follows:
(a) The Company shall prepare and file with the SEC a registration
statement with respect to the Registrable Shares and use its best
efforts to cause such registration statement to become effective, and
upon the request of the holders of a majority of the Registrable Shares
registered thereunder, use its best efforts to cause any registration
statement to keep such registration statement effective for up to one
hundred twenty (120) days.
(b) The Company shall prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement.
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(c) The Company shall furnish the Stockholders such number of prospectuses
and such other documents as they may reasonably request in order to
facilitate the disposition of the Registrable Shares owned by them and
all material correspondence with the SEC relating to such registration.
(d) The Company shall pay all costs (excluding any transfer taxes, fees and
expenses of any Stockholder's counsel, and any underwriting discounts
or selling commissions or other charges of any broker-dealer acting on
behalf of any Stockholder), fees and expenses in connection with all
registration statements filed pursuant to Section 2 hereof, including
without limitation the Company's legal and accounting fees and
expenses, printing expenses and blue sky fees and expenses.
(e) The Company will take all necessary action which may be required in
connection with qualifying or registering the Registrable Shares
included in a registration statement for offering and sale under the
securities or blue sky laws of such states as reasonably are requested
by the Stockholders, provided that the Company shall not be obligated
to qualify as a foreign corporation to do business under the laws of
any such jurisdiction.
(f) Use its best efforts to furnish, on the date that the registration
statement with respect to any Registrable Shares becomes effective, (i)
an opinion, dated such date, of the counsel representing the Company
for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and to the Stockholders
requesting registration of Registrable Shares and (ii) a letter dated
such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the
Stockholders requesting registration of Registrable Shares.
(g) The Company shall notify each Stockholder owning Registrable Shares
covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act
of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
5. Obligations of the Stockholders
(a) It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this Agreement with respect to the
Registrable Shares of any Stockholder that such Stockholder shall
furnish to the Company such information regarding him, her or itself,
the Registrable Shares held by him, her or it, and the intended method
of disposition of such Registrable Shares as shall be requested by the
Company to effect the registration of such Registrable Shares.
(b) No Stockholder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any registration or offering of the
Company's securities as the result of any controversy that might arise
with respect to the interpretation or implementation of this Agreement.
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6. Underwriting Requirements
Notwithstanding any provision in this Agreement to the contrary, the
Company shall not be required to include the Registrable Shares of any
Stockholder in any underwriting unless such Stockholder accepts the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it (or by other persons entitled to select the underwriters), and then only in
such quantity as the underwriters determine in their sole discretion would not
be reasonably likely to jeopardize the success of the offering by the Company.
If the total amount of shares, including the Registrable Shares, requested by
the Company's stockholders to be included in such offering exceeds the amount of
shares that the underwriters determine in their sole discretion is compatible
with the success of the offering, then the Company shall be required to include
in the offering only that number of such shares, including Registrable Shares,
if any, which the underwriters determine in their sole discretion would not be
reasonably likely to jeopardize the success of the offering. Any reduction with
respect to a selling Stockholder shall be pro-rata with all other selling
Stockholders based upon the aggregate amount of Registrable Shares requested to
be included in such registration owned by all selling Stockholders.
7. Indemnification Rights
(a) The Company shall indemnify each Stockholder and each person, if any,
who controls any such Stockholder within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act, against all
loss, claim, damage, expense or liability (including all expenses
reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which any of them may become subject under the
Securities Act, the Exchange Act or any other statute, common law or
otherwise, arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained (x) in such registration
statement (as from time to time amended and supplemented); (y) in any
post effective amendment or amendments or (z) in any application or
other document or written communication (in this Section 7 collectively
referred to herein as an "application") executed by the Company or
based upon written information furnished by the Company filed in any
jurisdiction in order to qualify the Registrable Shares under the
securities laws thereof or filed with the SEC, any state securities
commission or agency, the National Association of Securities Dealers,
Inc., the Nasdaq Stock Market or any securities exchange, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements contained therein
not misleading, unless such statement or omission was made in reliance
upon and in conformity with written information furnished to the
Company by a Stockholder expressly for use in such registration
statement, any amendment or supplement thereto or any application, as
the case may be. If any action is brought against any Stockholder or
any controlling person of such Stockholder in respect of which
indemnity may be sought against the Company pursuant to this Section
7(a), such Stockholder or such controlling person shall, within sixty
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(60) days after the receipt of a summons or complaint, notify the
Company in writing of the institution of such action and the Company
shall assume the defense of such action, including the employment and
payment of fees and expenses of counsel, but the failure to give such
notice shall not affect such indemnified person's right to
indemnification hereunder except to the extent that the Company's
defense of such action was materially adversely affected thereby. Such
Stockholder or such controlling person shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of such Stockholder or such
controlling person unless the employment of such counsel shall have
been authorized in writing by the Company in connection with the
defense of such action, or the Company shall not have employed counsel
to have charge of the defense of such action or such indemnified party
or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to those
available to the Company (in which case the Company shall not have the
right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events the fees and expenses for all
of such Stockholder and/or such controlling person shall be borne by
the Company. Except as expressly provided in the previous sentence, in
the event that the Company shall have assumed the defense of any such
action or claim, the Company shall not thereafter be liable to such
Stockholder or such controlling person in investigating, preparing or
defending any such action or claim. The Company agrees to notify within
sixty (60) days a Stockholder of the commencement of any litigation or
proceedings against the Company or any of its officers, directors or
controlling persons in connection with the offering and sale of the
Registrable Shares or in connection with such registration statement.
The Company further agrees that upon demand by an indemnified person,
at any time or from time to time, it will promptly reimburse such
indemnified person for any loss, claim, damage, liability, cost or
expense actually and reasonably paid by the indemnified person as to
which the Company has indemnified such person pursuant hereto.
Notwithstanding the foregoing provisions of this Section 7, any such
payment or reimbursement by the Company of fees, expenses or
disbursements incurred by an indemnified person in any proceeding in
which a final judgment by a court of competent jurisdiction (after all
appeals or the expiration of time to appeal) is entered against a
Stockholder or such indemnified person as a direct result of a
Stockholder or such person's gross negligence or willful misfeasance
will be promptly repaid to the Company.
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(b) Each selling Stockholder shall indemnify the Company, its officers and
directors and each other stockholder registering shares in such
registration statement and each person, if any, who controls the
Company or any such stockholder within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, against all loss,
claim, damage, expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim
whatsoever) to which they may become subject under the Securities Act,
the Exchange Act or any other statute, common law or otherwise, arising
from written information furnished by or on behalf of such Stockholder,
expressly for use in such registration statement. Each selling
Stockholder further agrees that upon demand by an indemnified person,
at any time or from time to time, such selling Shareholder will
promptly reimburse such indemnified person for any loss, claim, damage,
liability, cost or expense actually and reasonably paid by the
indemnified person as to which the Stockholder have indemnified such
person pursuant hereto. Notwithstanding the foregoing provisions of
this Section 7(b), any such payment or reimbursement by the selling
Stockholder of fees, expenses or disbursements incurred by an
indemnified person in any proceeding in which a final judgment by a
court of competent jurisdiction (after all appeals or the expiration of
time to appeal) is entered against the Company or such indemnified
person as a direct result of the Company or such person's gross
negligence or willful misfeasance will be promptly repaid to the
selling Stockholder.
(c) If the indemnification provided in this Section 7 is held by a court of
competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand
and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well an any other relevant equitable
consideration. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access
to information, and opportunity to correct or prevent such statement or
omission. In no event shall a person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) be
entitled to contribution from any person or entity who was not guilty
of fraudulent misrepresentation. Notwithstanding the foregoing, in no
event shall any contribution by a Stockholder exceed the net proceeds
from the offering received by such Stockholder, except in the case of
willful fraud by such Holder.
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(d) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions
in the underwriting agreement shall control.
(e) The obligations of the Company and Stockholders under this Section 7
shall survive the completion of any offering of Registrable Shares in a
registration statement under this Agreement.
8. General Provisions
(a) Neither this Agreement nor any provisions hereof shall be modified,
discharged or terminated except by an instrument in writing signed by
the party against whom any waiver, change, discharge or termination is
sought.
(b) Any notice, demand or other communication which any party hereto may be
required, or may elect, to give to anyone interested hereunder shall be
sufficiently given if: (a) deposited, postage prepaid, in a United
States mail letter box, registered or certified mail, return receipt
requested, addressed to such address as set forth next on Schedule A
hereto, or (b) delivered personally at such address.
(c) This Agreement may be executed through the use of separate signature
pages or in any number of counterparts, and each of such counterparts
shall, for all purposes, constitute one agreement binding on all
parties, notwithstanding that all parties are not signatories to the
same counterpart.
(d) Except as otherwise provided herein, this Agreement shall be binding
upon and inure to the benefit of the parties and their heirs,
executors, administrators, successors, legal representatives and
assigns.
(e) This Agreement and the documents referenced herein contain the entire
agreement of the parties and there are no representations, covenants or
other agreements except as stated or referred to herein and therein.
(f) This Agreement and the rights of the Stockholders hereunder shall not
be transferable or assignable by any Stockholder.
(g) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without giving effect to the
conflicts of law principles thereof.
(h) The use herein of the masculine pronouns "him" or "his" or similar
terms shall be deemed to include the feminine and neuter genders as
well and the use herein of the singular pronoun shall be deemed to
include the plural as well.
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IN WITNESS WHEREOF, each party, intending to be legally bound, has
caused this Agreement to be executed on its behalf by an officer thereunto duly
authorized, all as of the date first set forth above.
U.S. INTERACTIVE, INC.
By:____________________________________
Name:__________________________________
Title:_________________________________
STOCKHOLDERS:
_______________________________________
_______________________________________
_______________________________________
_______________________________________
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SCHEDULE A
Stockholder Stockholder Status Shares of Common Stock Stockholder Address
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