Exhibit 10.63
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of May 14, 2002 by
and between Silicon Valley Bank ("Purchaser") and Interliant, Inc., a Delaware
corporation (the "Company").
RECITALS
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A. Concurrently with the execution of this Agreement, Purchaser is
acquiring from the Company a Warrant to Purchase Stock (the "Warrant") pursuant
to which Purchaser has rights to acquire from the Company the Shares (as defined
in the Warrant);.
B. By this Agreement, Purchaser and the Company desire to set forth the
registration rights of the Shares.
NOW, THEREFORE, in consideration of the premises and the mutual
promises, covenants and conditions hereinafter set forth, the parties hereto
mutually agree as follows:
1. Registration Rights. The Company covenants and agrees as follows:
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1.1 Definitions. For purposes of this Section 1:
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(a) The term "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 of 1933, as amended, and
the rules and regulations thereunder (the "Securities Act"), and the declaration
or ordering of effectiveness of such registration statement or document;
(b) The term "Registrable Securities" means (i) the Shares, and
(ii) any Common Stock or other securities of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for
or in replacement of, the Shares.
(c) The terms "Holder" or "Holders" means Purchaser and its
qualifying transferees under subsection 1.8 hereof who hold Registrable
Securities.
(d) The term "SEC" means the Securities and Exchange Commission.
(e) The terms "Form S-1," "Form S-3" etc. shall mean those forms
with such designations as are required by the SEC and any successor or
replacement forms adopted by the SEC.
1.2 Company Registration.
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(a) Registration. If at any time or from time to time, the
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Company shall determine to register any of its securities, for its own account
or the account of any of its shareholders, other than a registration on Form S-8
relating solely to employee stock option or purchase plans or on Form S-4
relating solely to an SEC Rule 145 transaction, the Company will:
(i) promptly give to each Holder written notice thereof
(which shall include a list of the jurisdictions in which the Company intends to
attempt to qualify such securities under the applicable blue sky or other state
securities laws); and
(ii) include in such registration (and qualifications), and
in any underwriting involved therein, all the Registrable Securities specified
in a written request or requests, made within 30 days after receipt of such
written notice from the Company, by any Holder or Holders, except as set forth
in subsection 1.2(c) below.
(b) Underwriting. If the registration of which the Company gives
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notice is for a registered public offering involving a firm-commitment
underwriting, the Company shall so advise the Holders as a part of the written
notice given pursuant to subsection 1.2(a)(i). In such event the right of any
Holder to registration pursuant to this subsection 1.2 shall be (i) subject to
the rights of third parties under registration rights agreements between such
parties and the Company in effect on and as of the date hereof, and (ii)
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company and the other
shareholders distributing their securities through such underwriting) enter into
an underwriting agreement in customary form (and not inconsistent with the terms
hereof) with the underwriter or underwriters selected for such underwriting by
the Company.
(c) In the case of any registration of Common Stock by the
Company in a firm-commitment underwriting, if the managing underwriters give
written advice to the Company that marketing factors require a limitation on the
number of shares of Common Stock (or other securities convertible into or
exercisable or exchangeable for Common Stock) to be offered and sold by
stockholders of Company in such offering, there shall be included in the
offering, subject to the rights of third parties under registration rights
agreements between such parties and the Company in effect on and as of the date
hereof: (i) first, all securities proposed by Company to be sold for its
account; and (ii) second, that number of shares of Common Stock, if any,
requested to be included in such registration statement by Holders and by other
stockholders of the Company having contractual rights to include shares in such
registration, on a pro rata basis based upon the number of shares of Common
Stock each Holder and each such other stockholder beneficially owns.
1.3 Expenses of Registration. All expenses incurred in connection
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with any registration, qualification or compliance pursuant to this Section 1
including without limitation, all registration, filing and qualification fees,
printing expenses, fees and disbursements of counsel for the Company and
expenses of any special audits incidental to or required by such registration
(but excluding underwriting fees, discounts and commissions in respect of
Registrable Securities included n such registration), shall be borne by the
Company. All expenses of any registered offering not otherwise borne by the
Company will be borne pro rata among the Holders, any other shareholders of the
Company participating in such offering and the Company.
1.4 Registration Procedures. In the case of each registration,
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qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep each Holder participating
therein advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. At its expense
the Company will:
(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 registered thereunder, keep such
registration statement effective for up to 120 days (the "Effective Period").
(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 numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they 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 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 to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(e) 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. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement provided that all other shareholders of the
Company participating in such offering do the same.
(f) 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 or 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.
1.5 Indemnification.
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(a) The Company will indemnify each Holder of Registrable
Securities and each of its officers, directors and partners, and each person
controlling such Holder within the meaning of Section 15 of the Securities Act
("controlling person"), and each underwriter, if any, and each controlling
person of such underwriter, with respect to which registration, qualification or
compliance of Registrable Securities has been effected pursuant to this
Registration Rights Agreement, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereto) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, or any violation or
alleged violation by the Company of the Securities Act, the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder ("Exchange
Act") or any state securities law applicable to the Company or any rule or
regulation promulgated any such state law and relating to action or inaction
required of the Company in connection with any such registration, qualification
or compliance, and will reimburse each such Holder, each of its officers,
directors and partners, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, within a
reasonable amount of time after incurred for any reasonable legal and any other
expenses incurred in connection with investigating, defending or settling any
such claim, loss, damage, liability or action; provided, however, that the
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indemnity agreement contained in this subsection 1.5(a) shall not apply to
amounts paid in settlement of any such claim, loss, damage, liability, or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld or delayed); and provided further, that the
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Company will not be liable in any such case to the
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extent that any such claim, loss, damage or liability arises out of or is based
on any untrue statement or omission made in reliance upon and conformity with
written information furnished to the Company specifically for use therein by an
instrument duly executed by such Holder.
(b) Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify the
Company, each of its directors, officers and controlling persons, each
underwriter, if any, of the Company's securities covered by such a registration
statement, and each controlling person of such underwriter, and each other
Holder, each of its officers, directors, partners and controlling persons,
against all claims, losses, expenses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, partners, persons or
underwriters for any reasonable legal or any other expenses incurred in
connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company specifically for use therein by an instrument duly
executed by such Holder; provided, however, that the indemnity agreement
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contained in this subsection 1.5(b) shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of the Holder, (which consent shall
not be unreasonably withheld or delayed); and provided further, that the total
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amount for which any Holder shall be liable under this subsection 1.5(b) shall
not in any event exceed the aggregate net proceeds received by such Holder from
the sale of Registrable Securities held by such Holder in such registration.
(c) Each party entitled to indemnification under this subsection
1.5 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld), and the Indemnified Party may participate in such defense at such
party's expense; and provided further, that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations hereunder, unless such failure resulted in prejudice to the
Indemnifying Party; and provided further, that an Indemnified Party (together
with all other Indemnified Parties which may be represented without conflict by
one counsel) shall have the right to retain one separate 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. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 1.5 is
due in accordance with its terms but for any reason is judicially determined to
be unenforceable against the Indemnifying Party or otherwise unavailable to the
Indemnified Party in respect to any losses, claims, damages and liabilities
referred to herein, then the
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Indemnifying Party shall, in lieu of indemnifying such Indemnified Party,
contribute to the amount paid or payable by such Indemnified party as a result
of such losses, claims, damages or liabilities to which such party may be
subject in such proportion as is appropriate to reflect the relative fault of
the Company, on the one hand, and the selling Holders, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company and such selling Holders shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement, or omission or alleged omission, of material fact related to
the information supplied by the Company or such selling Holders and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and Holders agree that it would
not be just and equitable if contribution pursuant to this Section 1.5(d) were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 1.5(d), (i) in no case shall any
Holder be liable or responsible for any amount in excess of the net proceeds
received by such Holder from the sale of Registrable Securities pursuant to such
registration; and (ii) no person adjudged 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 adjudged guilty of such fraudulent
misrepresentation. Any party entitled to contribution shall, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section 1.5(d), notify such party or parties from
whom contribution may be sought, but the omission so to notify such party or
parties from whom contribution may be sought shall not, in the absence of actual
prejudice to such party or parties, relieve it or them from such contribution
obligation. No party shall be liable for contribution with respect to any
action, suit, proceeding or claim settled without its written consent.
1.6 Information by Holder. Any Holder or Holders of Registrable
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Securities included in any registration shall promptly furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
1.7 Rule 144 Reporting. With a view to making available to Holders
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the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees,at all times from and after the first anniversary of the
issuance of the Warrant, to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, after 90 days after the effective
date of the first registration filed by the Company for an offering of its
securities to the general public;
(b) 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
(at any time after it has become subject to such reporting requirements); and
(c) so long as a Holder owns any Registrable Securities, to
furnish to such Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144 (at any
time after 90 days after the effective date of the first registration statement
filed by the Company for an offering of its securities to the general public),
and of the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other
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reports and documents so filed by the Company as the Holder may reasonably
request in complying with any rule or regulation of the SEC allowing the Holder
to sell any such securities without registration.
1.8 Transfer of Registration Rights. Holders' rights to cause the
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Company to register their securities and keep information available, granted to
them by the Company under subsections 1.2 and 1.7 may be assigned to a
transferee or assignee of a Holder's Registrable Securities not sold to the
public who acquires all of such Holder's Registrable Securities, provided, that
the Company is given written notice by such Holder at the time of or within a
reasonable time after said transfer, stating the name and address of said
transferee or assignee and identifying the securities with respect to which such
registration rights are being assigned.
2. General.
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2.1 Waivers and Amendments. With the written consent of the record or
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beneficial holders of at least a majority of the Registrable Securities, the
obligations of the Company and the rights of the Holders of the Registrable
Securities under this agreement may be waived (either generally or in a
particular instance, either retroactively or prospectively, and either for a
specified period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its Board of Directors, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such modification, amendment or waiver shall reduce
the aforesaid percentage of Registrable Securities without the consent of all of
the Holders of the Registrable Securities. Upon the effectuation of each such
waiver, consent, agreement of amendment or modification, the Company shall
promptly give written notice thereof to the record holders of the Registrable
Securities who have not previously consented thereto in writing. This Agreement
or any provision hereof may be changed, waived, discharged or terminated only by
a statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, except to the extent
provided in this subsection 2.1.
2.2 Governing Law. This Agreement shall be governed in all respects
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by the laws of the State of Delaware as such laws are applied to agreements
between Delaware residents entered into and to be performed entirely within
Delaware.
2.3 Successors and Assigns. Except as otherwise expressly provided
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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.
2.4 Entire Agreement. Except as set forth below, this Agreement and
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the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.
2.5 Notices, etc. All notices and other communications required or
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permitted hereunder shall be in writing and shall be mailed by first class mail,
postage prepaid, certified or registered mail, return receipt requested,
addressed (a) if to Holder, at such Holder's address(es) as set forth below, or
at such other address(es) as such Holder shall have furnished to the Company in
writing, or (b) if to the Company, at the Company's address set forth below, or
at such other address as the Company shall have furnished to the Holder in
writing.
2.6 Severability. In case any provision of this Agreement shall be
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invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement or any provision of the other
Agreement s shall not in any way be affected or impaired thereby.
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2.7 Titles and Subtitles. The titles of the sections and subsections
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of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
2.8 Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be executed by their duly authorized representatives as of the date
first above written.
PURCHASER COMPANY
SILICON VALLEY BANK INTERLIANT, INC.
By: /s/ Xxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxx X. Xxxx Name: Xxxxxxx X. Xxxxxx
(print) (print)
Title: Vice President Title: Chief Financial Officer
Address:___________________________ Address:________________________________
___________________________________ ________________________________________
___________________________________ ________________________________________
copy to: Silicon Valley Bank
Treasury Department
0000 Xxxxxx Xxxxx, XX 000
Xxxxx Xxxxx, XX 00000
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