Exhibit 4.3
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this "Agreement")
is made as of March 14, 2000, by and among XXXXXXX.XXX, INC., a Delaware
-----------------
corporation (formerly, Tioga Systems, Inc., the "Company"), and the parties
listed on Schedule 1 attached hereto.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Investors (as defined in Section 1 hereof) possess certain
registration rights and other rights pursuant to a Registration Rights Agreement
dated as of June 14, 1999, between the Company and such Investors (the "1999
Agreement"); and
WHEREAS, the 1999 Agreement provided that it could be amended, discharged
or terminated under certain circumstances; and
WHEREAS, the undersigned Investors who were a party to the 1999 Agreement
desire to terminate the 1999 Agreement and to accept the rights created pursuant
hereto in lieu of the rights granted to them under the 1999 Agreement; and
WHEREAS, the Company and General Electric Company ("GE") are entering into
a licensing agreement (the "License Agreement") pursuant to which the Company
desires to sell and issue to GE a warrant to purchase up to 119,167 shares of
the Company's Series C Convertible Preferred Stock, par value $0.0001 per share
(the "Series C Stock"); and
WHEREAS, a condition to GE entering into the License Agreement is that the
Company and GE enter into this Agreement in order to provide GE with certain
rights to register shares of the Company's common stock issuable upon conversion
of shares of the Company's Series C Stock; and
WHEREAS, the Company and the prior Investors desire to induce GE to enter
into the Licensing Agreement by agreeing to the terms and conditions set forth
herein, GE's obligations under which are conditioned on the execution and
delivery of this Agreement by such Investors, holders of at least a majority of
the Registrable Securities and the Company:
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, and for other consideration, the receipt and adequacy of which are
hereby acknowledged, the Investors who are parties to the 1999 Agreement hereby
agree that the 1999 Agreement shall be superseded and replaced in its entirety
by this Agreement, and the parties hereto further agree as follows:
1. Definitions. For purposes of this Agreement:
"Common Shares" means the shares of common stock, par value $0.0001 per
share, of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Form S-3" means such form under the Securities Act as in effect on the
date hereof or any registration form under the Securities Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
"Holder" means an Investor (to the extent that such Investor is a holder of
Registrable Securities) or any assignee thereof in accordance with Section 11.
"Investors" shall mean GE and persons who possessed registration and other
rights pursuant to the 1999 Agreement immediately prior to its termination
hereby.
"Majority in interest of the Holders" means Holders holding a majority of
the Registrable Securities held by all Holders.
"Person" means any individual, partnership, joint venture, corporation,
limited liability company, association, trust or any other entity or
organization.
"Preferred Stock" means the Series B Stock and the Series C Stock.
"Qualified IPO" means a firm commitment underwritten public offering by the
Company of shares of Common Stock (i) pursuant to a registration statement on
Form S-1 under the Securities Act of 1933, as amended (or any successor form)
and (ii) with a pre-money valuation of the Company of at least $125 million and
resulting in gross proceeds to the Company of $15 million.
"Qualifying Request" means a request from one or more Holders owning in the
aggregate at least thirty percent (30%) of the Registrable Securities held by
the Holders.
"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.
"Registrable Securities" means (i) any Common Shares issuable (without
regard to any restriction or conversion that may be applicable to any particular
holder of Preferred Stock) or issued upon conversion of the Preferred Stock, and
(ii) any Common Shares issued (or issuable upon conversion or exercise of any
warrant, right or other securities which is issued) as a dividend or other
distribution with respect to, or in exchange for or in replacement of, or upon
conversion of, such Preferred Stock, Common Shares, warrants, rights or other
securities; provided, however, that any shares of Preferred Stock or Common
Shares sold by a Person in a transaction in which such Person's rights under
this Agreement are not assigned pursuant to Section 11 below shall cease to be
Registrable Securities from and after the time of such sale.
The number of shares of "Registrable Securities then outstanding" shall be
determined by the number of Common Shares outstanding, and the number of Common
Shares issuable, which are Registrable Securities.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Stockholders" means Xxxx Xxxxxx, a resident of the State of
California, Xxxxx Xxx, a resident of the State of California, Xxxxx Xxxx, a
resident of the State of California, and Xxxxx Xxxx, a resident of the State of
California.
"Series B Stock" means the Series B Convertible Preferred Stock, par value
$0.0001 per share.
"Series C Stock" has the meaning ascribed thereto in the recitals above.
"Stockholders' Rights Agreement" means that certain Amended and Restated
Stockholders' Rights Agreement, by and among the Company and each of the
Stockholders that are signatories thereto, of even date herewith.
"Violation" means any of the following statements, omissions or violations:
(i) any untrue statement or alleged untrue statement of a material fact
contained in a registration statement under this Agreement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto or any documents filed under state securities or "blue
sky" laws in connection therewith, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (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.
2. Request for Registration.
(a) If at any time which is the earlier of (i) more than one hundred eighty
(180) days after the initial public offering of the Company's securities and
(ii) June 14, 2002, the Company shall receive a written Qualifying Request that
the Company file a registration statement under the Securities Act, then the
Company shall, within ten (10) days of the receipt thereof, give written notice
of such request to all Holders and shall, subject to the limitations of Section
2(b) below, effect as soon as practicable, and in any event within sixty (60)
days of the receipt of such request, the registration under the Securities Act
of all Registrable Securities which the Holders request to be registered within
twenty (20) days of the mailing of such notice by the Company in accordance with
Section 18 below; provided, however, that (i) Registrable Securities having at
least a proposed aggregate offering price of $3,000,000 are to be registered,
and (ii) the Company shall be obligated to effect only two (2) registrations
pursuant to this Section 2(a). Except as otherwise provided in Section 6 hereof,
registrations which are not consummated shall not be counted for this purpose.
(b) If Holders intend to distribute the Registrable Securities covered by
their request by means of an underwriting, they shall so advise the Company and
the Company shall include such information in the written notice referred to in
Section 2(a). In such event, the right of any Holder to include such Holder's
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Regis-
trable Securities in the underwriting (unless otherwise mutually agreed between
the Holders making the Qualifying Request and such Holder) to the extent
provided herein. A majority in interest of the Holders participating in the
underwriting shall, after consultation with the Board of Directors of the
Company, select the managing underwriter or underwriters in such underwriting,
such underwriter(s) to be reasonably satisfactory to the Company. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company as provided in Section 4(f)) enter into an
underwriting agreement in customary form with the underwriter or underwriters so
selected for such underwriting: provided, however, that no such Holder shall be
required to make any representations or warranties except as they relate to such
Holder's ownership of shares and authority to enter into the underwriting
agreement and to such Holder's intended method of distribution, and the
liability of such Holder shall be limited to an amount equal to the net proceeds
from the offering received by such Holder. Notwithstanding any other provision
of this Section 2, if the underwriter advises the Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Holders shall so advise the Company and the Company shall
so advise all Holders of Registrable Securities which would otherwise be
underwritten pursuant hereto, and the number of shares of Registrable Securities
that may be included in the underwriting shall be allocated (i) first to the
Holders making the Qualifying Request, and (ii) thereafter among all other
Holders thereof, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each such other Holder.
(c) In addition to any other rights to demand registration pursuant to this
Section 2, Holders shall have the right to demand on an unlimited basis that the
Company, at the Company's expense, include any or all of their Registrable
Securities, in a registration statement on Form S-3 under the 1933 Act for the
purpose of attempting to effect the public sale of such shares; provided,
however, that (i) such Holders making such a demand under this Section 2(c) own
in the aggregate at least five percent (5%) of the Registrable Securities; (ii)
Registrable Securities having at least a proposed aggregate offering price of
$1,000,000 are to be registered; (iii) Form S-3 is available with respect to the
Registrable Securities; and (iv) the Company shall not be required to prepare
and file a registration statement on Form S-3 for the purpose of attempting to
effect the public sale of shares as provided for in this Section 2(c) more than
once in any six (6) month period. The other terms and conditions relating to a
demand registration referred to in this Section 2 shall be applicable to a
demand registration referred to in this Section 2(c), as the same may be
applicable.
(d) Notwithstanding the foregoing, if the Company shall furnish to Holders
requesting a registration statement pursuant to this Section 2, 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 shareholders for such registration statement to be filed by
reason of a material pending transaction and it is therefore essential to defer
the filing of such registration statement, the Company shall have the right to
defer such filing for a period of not more than ninety (90) days after receipt
of the request of such Holders; provided, however, that the Company may not
utilize this right more than once in any twelve (12) month period.
3. Company Registration. If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration effected
by the Company for
holders of the Company's equity securities other than the Holders) any of its
securities under the Securities Act in connection with the public offering of
such securities solely for cash (other than a registration on Form S-8 relating
solely to the sale of securities to participants in a Company stock plan or to
other compensatory arrangements to the extent includable on Form S-8, or a
registration on Form S-4), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within twenty (20) days after mailing of such notice by the Company
in accordance with Section 18, the Company shall, subject to the provisions of
Section 8, cause to be registered under the Securities Act all of the
Registrable Securities that each such Holder has requested to be registered. The
Company shall have no obligation under this Section 3 to make any offering of
its securities, or to complete an offering of its securities that it proposes to
make, and shall incur no liability to any Holder for its failure to do so.
4. Obligations of the Company. Whenever required under this Agreement to
effect the registration of any Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with respect to
such Registrable Securities 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 Securities being registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days or
until the Holders have completed the distribution referred to in such
registration statement, whichever occurs first (but in any event for at least
any period required under the Securities Act); provided that before filing such
registration statement or any amendments thereto, the Company will furnish to
the Holders copies of all such documents proposed to be filed.
(b) 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.
(c) Furnish to the Holders such number of copies of such registration
statement and of each amendment and supplement thereto (in each case including
all exhibits), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 under the Securities
Act, in conformity with the requirements of the Securities Act, and such other
documents as Holders may reasonably request in order to facilitate the
disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or "blue sky" laws of
such states or jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto (i) to qualify to do business in any state or jurisdiction
where it would not otherwise be required to qualify but for the requirements of
this clause (d), or (ii) to file a general consent to service of process in any
such state or jurisdiction.
(e) Use its best efforts to cause all Registrable Securities covered by
such registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
Company's business or operations to enable the seller or sellers thereof to
consummate the disposition of such Registrable Securities.
(f) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering.
(g) Notify each Holder of Registrable Securities 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 light of the circumstances then existing.
(h) Notify each Holder of Registrable Securities covered by such
registration statement and such Holder's underwriters, if any, and confirm such
advice in writing: (i) when the registration statement has become effective,
(ii) when any post-effective amendment to the registration statement becomes
effective and (iii) of any request by the SEC for any amendment or supplement to
the registration statement or prospectus or for additional information.
(i) Notify each Holder of Registrable Securities if at any time the SEC
should institute or threaten to institute any proceedings for the purpose of
issuing, or should issue, a stop order suspending the effectiveness of the
registration statement. Upon the occurrence of any of the events mentioned in
the preceding sentence, the Company will use its best efforts to prevent the
issuance of any such stop order or to obtain the withdrawal thereof as soon as
possible. The Company will advise each Holder of Registrable Securities promptly
of any order or communication of any public board or body addressed to the
Company suspending or threatening to suspend the qualification of any
Registrable Securities for sale in any jurisdiction.
(j) Furnish, at the request of any Holder requesting registration of
Registrable Securities pursuant to this Agreement, (i) on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Agreement, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective, 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 Holders requesting
registration of Registrable Securities and (ii) on the date that the
registration statement with respect to such securities becomes effective, a
"comfort" 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 Holders
requesting registration of Registrable Securities, and, if such securities are
being sold through underwriters, a reaffirmation of such letter on the date that
such Registrable Securities are delivered to the underwriters for sale.
(k) As soon as practicable after the effective date of the registration
statement, and in any event within sixteen (16) months thereafter, make
"generally available to its security holders" (within the meaning of Rule 158
under the Securities Act) an earning statement (which need not be audited)
covering a period of at least twelve (12) months beginning after the effective
date of the registration statement and otherwise complying with Section 11(a) of
the Securities Act.
5. Furnish Information. 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 Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities. If any registration statement or comparable statement under the
Securities Act refers to an Investor or any of its affiliates, by name or
otherwise, as the holder of any securities of the Company then, unless counsel
to the Company advises the Company that the Securities Act requires that such
reference be included in any such statement, each such Holder shall have the
right to require the deletion of such reference to itself and its affiliates.
6. Expenses of Demand Registration. All expenses, other than underwriting
discounts and commissions relating to Registrable Securities, incurred in
connection with registrations, filing or qualifications pursuant to Section 2,
including, without limitation, all registration, filing and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for the
Company, and the reasonable fees and disbursements of one counsel (selected by
the Holders holding a majority of the Registrable Securities being registered)
for the selling Holders shall be borne by the Company; provided, however, that
the Company shall not be required to pay the fees and disbursements of counsel
for the Holders in connection with any registration begun pursuant to Section 2
if the registration request subsequently is withdrawn at the request of the
Holders of Registrable Securities to be registered (in which case all
participating Holders shall bear such expenses pro rata), unless the Holders
holding a majority of Registrable Securities then outstanding agree to forfeit
one (1) demand registration pursuant to Section 2; provided further, however,
that if at the time of such withdrawal, (a) the Holders have learned of a
material adverse change in the condition (financial or otherwise), business or
prospects of the Company from that known to the Holders at the time of their
request or (b) there has occurred a material adverse change in marketing factors
related to the sale of Registrable Securities to the public from those existing
at the time of the Holders' request, then the Holders shall not forfeit any
demand registration rights and shall retain their rights pursuant to Section 2.
7. Expenses of Company Registration. The Company shall bear and pay all
expenses incurred in connection with any registration, filing or qualification
of Registrable Securities with respect to the registrations pursuant to Section
3 for each Holder, including without limitation all registration, filing and
qualification fees, printers' and accounting fees relating or apportionable
thereto and the fees and disbursements of one counsel for the selling Holders
(selected by the Holders of a majority of the Registrable Securities being
registered), but excluding underwriting discounts and commissions relating to
Registrable Securities.
8. Underwriting Requirements. In connection with any offering involving
an underwriting of shares being issued by the Company, the Company shall not be
required under
Section 3 to include any of the Holders' securities in such underwriting unless
they accept the terms of the underwriting as agreed upon between the Company and
the underwriters selected by it or by the persons entitled to select the
underwriters; provided, however, that no Holder participating in such
underwriting shall be required to make any representations or warranties except
as they relate to such Holder's ownership of shares and authority to enter into
the underwriting agreement and to such Holder's intended method of distribution,
and the liability of such Holder shall be limited to an amount equal to the net
proceeds from the offering received by such Holder. If the total amount of
securities, including Registrable Securities, requested by shareholders to be
included in such offering exceeds the amount of securities to be sold (other
than by the Company) that the underwriters reasonably believe compatible with
the success of the offering, then the Company shall be required to include in
the offering only that number of such securities, including Registrable
Securities, which the underwriters believe will not jeopardize the success of
the offering; provided, that, the number of remaining shares to be included in
the underwriting shall be allocated (i) first to the Holders of Registrable
Securities (excluding Holders of Registrable Securities who are also Series A
Stockholders, employees or directors of the Company), (ii) second to the Holders
of Registrable Securities who are also Series A Stockholders, employees or
directors of the Company, and (iii) thereafter among all other remaining selling
stockholders. Notwithstanding the forgoing, in no event shall the amount of the
securities of the selling Holders included in the offering be reduced below
twenty percent (20%) of the total amount of the securities to be included in
such offering, unless such offering is the initial public offering of the
Company's securities, in which case the selling Holders may be completely
excluded if the managing underwriter makes the determination described above and
no other stockholders' securities are included.
9. Indemnification. In the event any Registrable Securities are included in
a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Holder, its heirs, personal representatives and assigns, each of
such Holder's partners and members, and each of such Holder's partners' and
members' officers, directors, employees and affiliates, any underwriter (as
defined in the Securities Act) for such Holder and each Person, if any, who
controls such Holder or underwriter within the meaning of the Securities Act or
the Exchange Act against any losses, claims, damages or liabilities (joint or
several) to which they may become subject under the Securities Act, the Exchange
Act or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon a
Violation (provided, however, that the Company will not be required to indemnify
any of the foregoing Persons on account of any losses, claims, damages or
liabilities arising from a Violation if and to the extent that such Violation
was made in a preliminary prospectus and was corrected in a subsequent
prospectus that was required by law to be delivered to the Person making the
claim with respect to which indemnification is sought hereunder (and such
subsequent prospectus was made available by the Company to permit delivery of
such prospectus in a timely manner), and such subsequent prospectus was not so
delivered to such Person); and the Company will pay to each such indemnified
party, as incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this Section 9(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case to a particular indemnified party for any
such loss, claim, damage, liability or action to the extent that it arises out
of or is based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with such
registration by or on behalf of such indemnified party.
(b) To the extent permitted by law, each selling Holder will indemnify and
hold harmless the Company, each of its directors, each of its officers who has
signed the registration statement, each Person, if any, who controls the Company
within the meaning of the Securities Act, any underwriter, any other Holder
selling securities in such registration statement and any controlling Person of
any such underwriter or other Holder, against any losses, claims damages or
liabilities (joint or several) to which any of the foregoing Persons may become
subject, under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by or on behalf of such
Holder expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred by
any Person intended to be indemnified pursuant to this Section 9(b), in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement contained
in this Section 9(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder, which consent shall not be unreasonably withheld; and
provided further, that, in no event shall the liability of any Holder under this
Section 9(b) exceed the net proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 9 of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 9, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
indemnified party under this Section 9 except if, and only to the extent that,
the indemnifying party is actually prejudiced thereby; and such failure to
deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 9.
(d) The obligations of the Company and Holders under this Section 9 shall
survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement and otherwise.
(e) Any indemnity agreements contained herein shall be in addition to any
other rights to indemnification or contribution which any indemnified party may
have pursuant to law or contract and shall remain operative and in full force
and effect regardless of any investigation made or omitted by or on behalf of
any indemnified party.
(f) If for any reason the foregoing indemnity is unavailable, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i)
In such proportion as is appropriate to reflect the relative benefits received
by the indemnifying party on the one hand and the indemnified party on the other
(taking into consideration the fact that the provision of the registration
rights and indemnification hereunder was a material inducement to the Investors
to purchase Registrable Securities) or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law or provides a lesser sum to the
indemnified party than the amount hereinafter calculated, in such proportion as
is appropriate to reflect not only the relative benefits received by the
indemnifying party on the one hand (taking into consideration the fact that the
provision of the registration rights and indemnification hereunder was a
material inducement to the Investors to purchase Registrable Securities) and the
indemnified party on the other but also the relative fault of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations. The relative fault 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 or on behalf of the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. No Person guilty of fraudulent misrepresentation (within the meaning
of section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
Notwithstanding anything to the contrary in this Section 9, no Holder shall be
required, pursuant to this Section 9, to contribute any amount in excess of the
net proceeds received by such indemnifying party from the sale of Registrable
Securities in the offering to which the losses, claims, damages, liabilities or
expenses of the indemnified party relate.
10. Reports Under the Exchange Act. With a view to making available to the
Holders the benefits of Rule 144 under the Securities Act and any other rule or
regulation of the SEC that may at any time permit a Holder to sell securities of
the Company to the public without registration or pursuant to a registration on
Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date of the first registration statement filed by the Company for
the offering of its securities to the general public;
(b) uses its commercially reasonable efforts to take such action as is
necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities;
(c) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and
(d) furnish to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144 under the Securities
Act (at any time after the effective date of the first registration statement
filed by the Company), the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
11. Assignment of Registration Rights. The rights to cause the Company to
register Registrable Securities pursuant to this Agreement may be assigned in
whole or in part by a Holder to one or more of its partners or affiliates or to
one or more transferees or assignees of not less than five percent (5%) of all
Registrable Securities held by a Holder, provided that such transferee or
assignee delivers to the Company a written instrument by which such transferee
or assignee agrees to be bound by the obligations imposed on Holders under (i)
this Agreement to the same extent as if such transferee or assignee was a party
hereto, and (ii) the Stockholders' Rights Agreement to the same extent as if
such transferee or assignee was a party thereto. For the purposes of
determining the number of shares of Registrable Securities held by a transferee
or assignee, the holdings of transferees and assignees of a partnership who are
partners or retired partners of such partnership (including spouses and
ancestors, lineal descendants and siblings of such partners or spouses who
acquire Registrable Securities by gift, will or intestate succession) shall be
aggregated together and with the partnership; provided that all assignees and
transferees 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 this Agreement.
12. Limitations on Subsequent Registration Rights; Existing Registrations
Rights; Termination of Registration Rights.
(a) From and after the date of this Agreement, the Company shall not,
without the prior written consent of the Holders owning in the aggregate at
least a majority of the Registrable Securities enter into any agreement with any
holder or prospective holder of any securities of the Company which would allow
such holder or prospective holder (a) to include such securities in any
registration filed under this Agreement, unless under the terms of such
agreement, such holder or prospective holder may include such securities in any
such registration only to the extent that the inclusion of such prospective
holder's securities will not reduce the amount of the Registrable Securities of
the Holders which is included or (b) to request a registration. The Company
represents and warrants to the Holders that there are no "registration rights"
relating to securities of the Company that exist on the date hereof other than
those provided herein and those provided under that certain Registration Rights
Agreement, dated as of June 22, 1998, by and among the Company and the Series A
Stockholders.
(b) The right of any Holder to request registration or inclusion in any
registration pursuant to Section 2 or Section 3 hereof shall terminate after the
earlier of (i) seven (7) years following the closing of the initial public
offering of Common Stock of the Company, or
(ii) such time as Rule 144 or another similar exemption under the Securities Act
is available for the sale of all of such Holder's shares of Registrable
Securities during any ninety (90) day period.
13. "Market Stand-Off" Agreement. If requested by the Company and an
underwriter of Common Stock (or other securities) of the Company, a Holder shall
not sell or otherwise transfer or dispose of any Common Stock (or other
securities) of the Company held by such Holder (other than those included in the
registration) during the one hundred eighty (180) day period following the
effective date of a registration statement of the Company filed under the
Securities Act; provided, that all officers and directors of the Company and all
other persons holding two percent (2%) or more of the Company's outstanding
stock enter into similar agreements.
The obligations described in this Section 13 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose stop-
transfer instructions with respect to the shares (or securities) subject to the
foregoing restriction until the end of such one hundred eighty (180) day period.
14. Amendment; Waiver. In connection with the granting of registration
rights to any other Person as contemplated under Section 12 hence, any provision
of this Agreement may be amended in connection therewith only with the written
consent of the Company and the Holders of a majority of the Registrable
Securities then outstanding. In all other instances, any provision of this
Agreement may be amended, waived, discharged or terminated (either generally or
in a particular instance and either retroactively or prospectively) only by a
written instrument signed by the Company and the holders of at least a majority
of the Registrable Securities then outstanding, and any such amendment, waiver,
discharge or termination shall be binding on each holder of Registrable
Securities at the time outstanding, each future holder of all such securities,
and the Company.
15. Changes in Registrable Securities. If, and as often as, there are any
changes in the Registrable Securities by way of stock split, stock divided,
combination or reclassification, or through merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions of this Agreement, as may be
required, so that the rights and privileges granted hereby shall continue with
respect to the Registrable Securities as so changed. Without limiting the
generality of the foregoing, the Company will require any successor by merger or
consolidation to assume and agree to be bound by the terms of this Agreement, as
a condition to any such merger or consolidation.
16. Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the subject matter
hereof. Nothing in this Agreement, express or implied, is intended to confer
upon any Person, other than the parties hereto and their respective successors
and assign, any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, except as expressly provided herein.
17. Governing Law. This Agreement shall be governed in all respects by the
laws of the State of Delaware, without regard to the conflicts of laws
provisions thereof.
18. Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
19. Notices. All notices under this Agreement shall be in writing and shall
be deemed to have been delivered personally, or, if sent by an overnight
delivery service maintaining records of receipt or by telecopier or other
electronic means of written communication, on the first business day after it is
sent. Notices shall be addressed as follows or to such other address as the
parties shall specify by written notice:
If to the Company:
Xxxxxxx.xxx, Inc.
000 Xxxxxxxx
Xxxxxxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxxx Xxxxxx, Esq.
Pillsbury Madison & Sutro LLP
0000 Xxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to an Investor, to the address set forth on Schedule 1 attached hereto.
with a copy to:
Xxx X. Xxxxxxxx
Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
20. Severability. Any invalidity, illegality or limitation on the
enforceability of this Agreement or any part thereof, by any party whether
arising by reason of the law of the respective party's domicile or otherwise,
shall in no way affect or impair the validity, legality or enforceability of
this Agreement with respect to other parties. If any provision of this Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
21. Title and Subtitles. The titles of the Sections of this Agreement are
for convenience of reference only and are not be considered in construing this
Agreement.
22. Delays or Omissions; Remedies Cumulative. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to the parties, upon
any breach or default of the Company under this Agreement, shall impair any such
right, power or remedy, nor shall it be construed to be a waiver of any such
breach or default, or any acquiescence therein, or of any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. It is further agreed that any waiver, permit, consent or
approval of any kind or character by a party of any breach or default under this
Agreement, or any waiver by a party of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in writing and that all remedies, either under this
Agreement, or by law or otherwise afforded to a party, shall be cumulative and
not alternative.
23. Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
24. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
25. Aggregation of Stock. All shares of Preferred Stock held or acquired by
affiliated entities or persons shall be aggregated for the purpose of
determining the availability of any rights under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
THE COMPANY:
-----------
XXXXXXX.XXX, INC.
By /s/ Xxxxx X. Xxxx
-----------------------------------------
Xxxxx X. Xxxx
President and Chief Executive Officer
INVESTORS:
---------
By
-----------------------------------------
