EXHIBIT 10.19
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of
August 18, 1998, is among (a) Art Technology Group, Inc., a Delaware
corporation, (the "COMPANY"), (b) the persons listed on SCHEDULE 1 hereto and
the persons who execute a Supplemental Agreement (as defined in the Purchase
Agreement) pursuant to the terms of the Purchase Agreement (collectively, the
"SERIES D HOLDERS"), (c) the persons listed on SCHEDULE 2 hereto (collectively,
the "SERIES C HOLDERS"), (d) the person listed on SCHEDULE 3 hereto
(collectively, the "SERIES B HOLDER"), and (e) each other Person who becomes a
party to this Agreement by executing an Instrument of Accession (an "INSTRUMENT
OF ACCESSION") in the form of SCHEDULE 4 hereto (collectively with the Series D
Holders, Series C Holders, and the Series B Holder, the "HOLDERS", and each
individually a "HOLDER").
This Agreement is made in connection with the Series D Senior
Participating Convertible Redeemable Preferred Stock Purchase Agreement dated as
of the date hereof (the "PURCHASE AGREEMENT") between the Company and the Series
D Investors. In order to induce the Series D Investors to enter into the
Purchase Agreement, the Company, the Series C Holders and the Series B Holders
have agreed to provide the registration rights set forth herein and to otherwise
amend and restate the registration rights previously provided to the Series C
Investors and the Series B Investors as set forth in this Agreement.
IN WITNESS WHEREOF, each of the parties to this Agreement hereby agrees
as follows:
This Agreement replaces and supersedes in their entirety each of (1)
the Amended and Restated Registration Rights Agreement, as amended, dated as of
December 8, 1997 (the "PRIOR REGISTRATION RIGHTS AGREEMENT"), among the Company,
and the persons and entities listed therein and (2) all provisions pertaining to
registration rights contained in that certain Stockholder's Agreement, dated as
of December 23, 1996, as amended (the "PRIOR STOCKHOLDERS AGREEMENT"), including
without limitation Article II thereof, among the Company, SOFTBANK Ventures,
Inc., a Japanese corporation, Manhendajeet Xxxxx, Xxxxxx X. Xxxxx, Xxxxxxxxx
Xxxxx and B.U. Xxxxx. Each of the Prior Registration Rights Agreement and the
Prior Stockholders Agreement be and hereby is terminated and shall have no
further force and effect.
1. DEFINITIONS. As used herein, the following terms shall have
the following meanings:
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means (a) the Company's Common Stock, $0.01 par value
per share, and (b) any shares of any other class of capital stock of the Company
previously or hereafter issued which are (i) not preferred as to dividends or
assets over any class of stock of the Company, (ii) not subject to redemption
pursuant to the terms thereof or (iii) issued to the holders of shares of Common
Stock upon any reclassification thereof.
"COMPANY" has the meaning specified in the preamble hereto.
"DEMAND REGISTRATION" has the meaning specified in Section 2(a).
"DERIVATIVE SECURITIES means (i) all shares of stock and other
securities that are convertible into or exchangeable for shares of Common Stock,
including without limitation shares of Preferred Stock, and (ii) all options,
warrants and other rights to acquire shares of Common Stock or securities
convertible into or exchangeable for shares of Common Stock.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FULLY DILUTED BASIS" means, with respect to any calculation in respect
of outstanding shares of Common Stock, that such calculation is to be made by
treating as outstanding all shares of Common Stock issuable upon the exercise,
exchange, or conversion in full, of all Derivative Securities then outstanding.
"HOLDER" means one of the Holders identified in the introductory
paragraph to this Agreement or such other Person to whom such Holder shall have
assigned or transferred such Holder's Registrable Securities and the rights and
obligations hereunder in accordance with Section 12(g) of this Agreement.
"INDEMNIFIED PARTY" has the meaning specified in Section 8(c) hereof.
"INDEMNIFYING PARTY" has the meaning specified in Section 8(c) hereof.
"INSTRUMENT OF ACCESSION" has the meaning specified in the preamble
hereto.
"NASDAQ" has the meaning specified in Section 5(a)(vi).
"PERSON" means any individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
"PIGGYBACK REGISTRATION" has the meaning specified in Section 3(a).
"PREFERRED STOCK" means, collectively, the Series B Preferred Stock,
the Series C Preferred Stock and the Series D Preferred Stock.
"PROSPECTUS" means the prospectus included in any Registration
Statement, as amended or supplemented by any Prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and all other amendments and supplements
to the Prospectus, including post-effective amendments, and all material
incorporated by reference in such Prospectus.
"PUBLIC SALE" means any sale of Common Stock to the public pursuant to
a public offering registered under the Securities Act, or to the public through
a broker or market-maker pursuant to the provisions of Rule 144 (or any
successor rule) adopted under the Securities Act.
"PURCHASE AGREEMENT" has the meaning specified in the preamble hereto.
"REGISTERED" and "REGISTRATION" means a registration effected by
preparing and filing a Registration Statement in compliance with the Securities
Act and the declaration or ordering by the Commission of effectiveness of such
Registration Statement.
"REGISTRABLE SECURITIES" means all Series D Investor Registrable
Securities, all Series C Investor Registrable Securities and all Series B
Investor Registrable Securities.
"REGISTRATION EXPENSES" has the meaning specified in Section 7(a).
"REGISTRATION STATEMENT" means any registration statement of the
Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.
"SERIES B HOLDER" has the meaning specified in the preamble hereto.
"SERIES B INVESTOR REGISTRABLE SECURITIES" means, at any time, all of
the then issued and outstanding (a) shares of Common Stock issued or issuable to
the Series B Investors upon conversion of the shares of Series B Preferred Stock
of the Company purchased by the Series B Investors pursuant to the Series B
Preferred Stock Purchase Agreement, or issuable upon the exercise of the
Performance Warrant issued thereunder, each dated December 23, 1996, by and
between the Company and the Series B Holder, and any other securities acquired
by the Series B Investors pursuant to their rights under the Stockholders'
Agreement (as hereinafter defined) and (b) capital stock or other securities
into which or for which any such shares of Common Stock shall have been
converted or exchanged pursuant to any recapitalization, reorganization or
merger of the Company, and (c) shares of capital stock issued with respect to
the foregoing pursuant to a stock split or stock dividend, PROVIDED, that the
foregoing capital stock shall cease to be Series B Investor Registrable
Securities upon
the sale of such capital stock pursuant to a Public Sale, upon a sale or
transfer of such capital stock in violation of the Stockholders' Agreement or
upon the assignment of rights or obligations hereunder in violation of the terms
of this Agreement.
"SERIES B INVESTORS" means the Series B Holders and their permitted
assigns and transferees.
"SERIES B PREFERRED STOCK" means the Series B Convertible Preferred
Stock, $0.01 par value per share, of the Company.
"SERIES C HOLDERS has the meaning specified in the preamble hereto.
"SERIES C INVESTOR REGISTRABLE SECURITIES" means, at any time, all of
the then issued and outstanding (a) shares of Common Stock issued or issuable to
the Series C Investors upon conversion of the shares of Series C Preferred Stock
of the Company purchased by the Series C Investors pursuant to the Series C
Preferred Stock Purchase Agreement, dated November 12, 1997 and the Series C
Preferred Stock Purchase Agreement, December 8, 1997, by and among the Company
and the Series C Holders, (b) capital stock or other securities into which or
for which any such shares of Common Stock shall have been converted or exchanged
pursuant to any recapitalization, reorganization or merger of the Company, and
(c) shares of capital stock issued with respect to the foregoing pursuant to a
stock split or stock dividend, PROVIDED, that the foregoing capital stock shall
cease to be Series C Investor Registrable Securities upon the sale of such
capital stock pursuant to a Public Sale, upon a sale or transfer of such capital
stock in violation of the Stockholders' Agreement or upon the assignment of
rights or obligations hereunder in violation of the terms of this Agreement.
"SERIES C INVESTORS" means the Series C Holders and their permitted
assigns and transferees.
"SERIES C PREFERRED STOCK" means the Series C Convertible Preferred
Stock, $0.01 par value per share, of the Company.
"SERIES D HOLDER" has the meaning specified in the preamble hereto.
"SERIES D INVESTOR REGISTRABLE SECURITIES" means, at any time, all of
the then issued and outstanding (a) shares of Common Stock issued or issuable to
the Series D Investors upon conversion of the shares of Series D Preferred Stock
of the Company and upon exercise of the Warrants (as defined in the Purchase
Agreement) (b) all other shares of Common Stock issued or issuable to or
purchased by the Series D Investors from time to time, (c) shares of any class
of Common Stock into which shares of Common Stock have been converted, (d)
capital stock or other securities into which or for which any shares of Common
Stock shall have been converted or exchanged pursuant to any recapitalization,
reorganization or merger of the Company, and (e) shares of capital stock issued
with respect to the foregoing pursuant to a stock
split or stock dividend, PROVIDED, that the foregoing capital stock shall cease
to be Series D Investor Registrable Securities only upon a sale of such Series D
Investor Registrable Securities pursuant to a Public Sale.
"SERIES D INVESTORS" means the Series D Holders and their permitted
assigns and transferees.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"STOCKHOLDERS' AGREEMENT" means the Stockholders' Agreement of even
date herewith among the Company and those of its stockholder parties thereto.
"UNDERWRITERS' MAXIMUM NUMBER" means, for any Piggyback Registration,
Demand Registration or other registration which is an underwritten registration,
that number of securities to which such registration should, in the opinion of
the managing underwriters of such registration in the light of marketing
factors, be limited.
2. DEMAND REGISTRATION.
(a) REQUEST FOR DEMAND REGISTRATION ON FORM S-1.
Subject to the limitations contained in the following
paragraphs of this Section 2 (each of clauses (i)-(iii) below being
referred to as a "DEMAND REGISTRATION"):
(i) SERIES D INVESTORS. Holders of not less than 50% of all
Series D Investor Registrable Securities at any time outstanding may,
at any time and from time to time after the earlier to occur of (A) 180
days following the completion of an initial public offering of the
Company's Common Stock, and (B) the third anniversary of the date
hereof, give to the Company a written request for the registration by
the Company under the Securities Act of all or any portion of the
Series D Investor Registrable Securities.
(ii) SERIES C INVESTORS. Holders of not less than 50% of all
Series C Investor Registrable Securities at any time outstanding may,
at any time and from time to time after the first anniversary of the
completion of an initial public offering of the Company's Common Stock,
give to the Company a written request for the registration by the
Company under the Securities Act of Series C Investor Registrable
Securities having an aggregate offering price of not less than
$5,000,000 (based on the then current public market price or fair value
of such Registrable Securities proposed to be registered) (and which
$5,000,000 threshold shall, for purposes of calculating whether such
threshold has been met, include the Series D Investor Registrable
Securities that the Company is required to include in such Demand
Registration under Section 2(a)(v) hereof if any Series D Investors
join in a Demand Registration initiated pursuant to this Section
2(a)(ii)).
(iii) SERIES B INVESTORS. Holders of not less than all of the
Series B Investor Registrable Securities at any time outstanding may,
at any time and from time to time after [180 days following] the
completion of an initial public offering of the Company's Common Stock,
give to the Company a written request for the registration by the
Company under the Securities Act of Series B Investors Registrable
Securities having an aggregate offering price of not less than
$5,000,000 (based on the then current public market price or fair value
of such Registrable Securities proposed to be registered) (and which
$5,000,000 threshold shall, for purposes of calculating whether such
threshold has been met, include the Series D Investor Registrable
Securities that the Company is required to include in such Demand
Registration under Section 2(a)(v) hereof if any Series D Investors
join in a Demand Registration initiated pursuant to this Section
2(a)(ii)).
(iv) NOTICE; JOIN-INS; REQUESTS TO BE INCLUDED. Within ten
(10) days after the receipt by the Company of any written request
pursuant to Sections 2(a)(i), 2(a)(ii) or 2(a)(iii), the Company will
give written notice of such registration request to all Holders of
Registrable Securities. Holders of Registrable Securities (other than
Series D Investor Registrable Securities) may request that all or a
portion of such Registrable Securities (other than Series D Investor
Registrable Securities) be included in any Demand Registration subject
to the priorities on cut-back as set forth in Section 2(c). The Holders
of not less then 50% of the then outstanding Series D Investor
Registrable Securities may, at their option, join in any Demand
Registration(s) pursuant to Sections 2(a)(ii) or 2(a)(iii) by giving
written notice to the Company specifically stating their intent to
"join-in" such demand, within ten (10) days after the receipt of such
notice given by the Company to all Holders of Registrable Securities
pursuant to the first sentence of this paragraph. In lieu of joining-in
any Demand Registration(s) pursuant to Sections 2(a)(ii) or 2(a)(iii),
any Holders of Series D Registrable Securities may request that all or
a portion of their Series D Investor Registrable Securities be included
in such Demand Registration(s) subject to the priorities on cut-back as
set forth in Section 2(c).
(v) SECURITIES REQUIRED TO BE INCLUDED. Subject to the
limitations contained in the following paragraphs of this Section 2,
after the receipt of a written request for any Demand Registration, the
Company will be obligated and required to include in (A) a Demand
Registration pursuant to Section 2(a)(i), all Series D Investor
Registrable Securities with respect to which the Company shall receive
written requests of Holders of Series D Investor Registrable Securities
for inclusion in such registration within thirty (30) days after the
date on which the Company shall have given to all Holders such written
notice of registration request pursuant to Section 2(a)(iv), (B) a
Demand Registration pursuant to Section 2(a)(ii), all Series C Investor
Registrable Securities and all Series D Investor Registrable Securities
(if Series
D Investors choose to join in such Demand Registration) with respect
to which the Company shall receive written requests of Holders of
Series C Investor Registrable Securities and Holders of Series D
Investor Registrable Securities (if Series D Investors choose to join
in such Demand Registration) for inclusion in such registration within
thirty (30) days after the date on which the Company shall have given
to all Holders such written notice of registration request pursuant to
Section 2(a)(iv); and (C) a Demand Registration pursuant to Section
2(a)(iii), all Series B Investor Registrable Securities and all Series
D Investor Registrable Securities (if Series D Investors choose to
join in such Demand Registration) with respect to which the Company
shall receive written requests of Holders of Series B Investor
Registrable Securities and Holders of Series D Investor Registrable
Securities (if Series D Investors choose to join in such Demand
Registration) for inclusion in such registration within thirty (30)
days after the date on which the Company shall have given to all
Holders such written notice of registration request pursuant to
Section 2(a)(iv).
(vi) BEST EFFORTS OF COMPANY. The Company will use its best
efforts to effect promptly the registration of all such Registrable
Securities. All written requests made by Holders of Registrable
Securities pursuant to this Section 2(a) will specify the number of
shares of Registrable Securities to be registered and will also specify
the intended method of disposition thereof.
(b) LIMITATIONS ON DEMAND REGISTRATION ON FORM S-1.
(i) SERIES D DEMAND REGISTRATION. The Holders of Series D
Investor Registrable Securities will not be entitled to require the
Company to effect more than two (2) Demand Registrations (other than on
Form S-3) pursuant to Section 2(a)(i) and including any Demand
Registration(s) pursuant to Sections 2(a)(ii) and 2(a)(iii) if Holders
of a majority of then outstanding Series D Investor Registrable
Securities exercise their option, pursuant to Section 2(a)(iv), to join
in such Demand Registration(s). Any registration initiated by Holders
of Series D Investor Registrable Securities or included as a Demand
Registration pursuant to Section 2(a)(iv) shall not count as a Demand
Registration for purposes of this Section 2(b)(i): (A) unless and until
such registration shall have become effective (and remain effective for
the period required by Section 5(a)(ii) hereof) and all Registrable
Securities requested to be included in such registration shall have
been actually sold; or (B) if such Holders withdraw their request for a
Demand Registration pursuant to Section 2(a)(i), 2(a)(ii) or 2(a)(iii)
at any time because such Holders (1) reasonably believe that the
Registration Statement or Prospectus contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein (in the case
of the Prospectus, in the light of the circumstances under which they
were made) not misleading, (2) notified the Company of such fact and
requested that
the Company correct such alleged misstatement or omission and (3) the
Company has refused to correct such alleged misstatement or omission.
(ii) SERIES C DEMAND REGISTRATION. The Holders of Series C
Investor Registrable Securities will not be entitled to require the
Company to effect (A) more than two (2) Demand Registrations (other
than on Form S-3) pursuant to Section 2(a)(ii), (B) more than one (1)
Demand Registration (other than on Form S-3) pursuant to Section
2(a)(ii) during any twelve (12) consecutive month period and (C) any
registration (other than on Form S-3) within six (6) months after the
effective date of any other Registration Statement.
(iii) SERIES B DEMAND REGISTRATION. The Holders of Series B
Investor Registrable Securities will not be entitled to require the
Company to effect (A) more than two (2) Demand Registrations (other
than on Form S-3) pursuant to Section 2(a)(iii), (B) more than one (1)
Demand Registration (other than on Form S-3) pursuant to Section
2(a)(iii) during any twelve (12) consecutive month period or (C) any
registration (other than on Form S-3) within six (6) months after the
effective date of any other Registration Statement. Any registration
initiated by Holders of Series B Registrable Securities as a Demand
Registration pursuant to Section 2(a)(iii) hereof shall not be counted
as a Demand Registration for purposes of this Section 2(b)(iii) unless
and until such registration shall have become effective and all
Registrable Securities requested or required to be included in such
registration shall have been actually sold.
(iv) Notwithstanding the foregoing, the Company shall not be
obligated to effect any Demand Registrations pursuant to Sections
2(a)(i), 2(a)(ii) or 2(a)(iii) if, in the good faith determination of
the Board of Directors, the filing of any registration statement would
adversely affect a material proposed or pending acquisition, merger or
similar corporate event to which the Company is or expects to be a
party. In the event of such determination by the Board of Directors,
the Company may, at its option, direct (a "DIRECTIVE") in writing
within ten (10) days of receipt of any request for any Demand
Registration(s) that such Demand Registration(s) be delayed (and, if a
majority of the holders of Registrable Securities initiating such
request so elect, withdrawn) for a period not in excess of three (3)
months from the date of such Directive, which right to delay may be
exercised by the Company not more than once in any twelve-month period.
In the event that, following a request for a Demand Registration
pursuant to Sections 2(a)(i), 2(a)(ii) or 2(a)(iii) the Holders of
Series D Investor Registrable Securities, Series C Investor Registrable
Securities or Series B Investor Registrable Securities shall, as the
case may be, at the Company's request pursuant to the foregoing
sentence, agree to withdraw such Demand Registration(s), or if the
Demand Registration(s) is delayed as set forth above, then such Demand
Registration(s) shall be deemed to have been so withdrawn or delayed,
as the case may be, and if such Demand Registration is withdrawn it
shall not count as a Demand Registration for purposes of Sections
2(b)(i), 2(b)(ii) or 2(b)(iii), as applicable.
(vi) The Company shall not be obligated or required to effect
the Demand Registration of any Registrable Securities: (A) pursuant to
Section 2(a)(i) hereof, during the period commencing on the date
falling thirty (30) days prior to the Company's estimated date of
filing of, and ending on the date 180 days following the effective date
of, any Registration Statement pertaining to any underwritten
registration initiated by the Company, for the account of the Company,
if the written request of Holders for such Demand Registration pursuant
to Section 2(a)(i) hereof shall have been received by the Company after
the Company shall have given to all Holders of Registrable Securities a
written notice stating that the Company is commencing an underwritten
registration initiated by the Company for its own account, or any
registration not permitted by the Securities Act; PROVIDED, HOWEVER,
that the Company will use its reasonable efforts in good faith to cause
any such Registration Statement to be filed and to become effective as
expeditiously as shall be reasonably possible; (B) pursuant to Section
2(a)(ii) hereof, during the period commencing on the date falling
thirty (30) days prior to the Company's estimated date of filing of,
and ending on the date 180 days following the effective date of, any
Registration Statement pertaining to any underwritten registration
initiated by the Company, for the account of the Company; and (C)
pursuant to Section 2(a)(iii) hereof, during the period commencing on
the date falling ninety (90) days prior to the Company's estimated date
of filing of, and ending on the date 180 days following the effective
date of, any Registration Statement pertaining to any underwritten
registration initiated by the Company for the account of the Company.
(c) PRIORITY ON DEMAND REGISTRATIONS ON FORM S-1. If the managing
underwriters in any underwritten Demand Registration, whether pursuant to
Sections 2(a)(i), 2(a)(ii) or 2(a)(iii), shall give written advice to the
Company and the Holders of Registrable Securities that the number of securities
proposed to be included in such registration exceeds the Underwriters' Maximum
Number, then:
(i) the Company will be obligated and required, in the first
instance, to include in such registration, (A) for written requests
pursuant to Section 2(a)(i), that number of Series D Investor
Registrable Securities requested by the Holders thereof to be included
in such registration which does not exceed the Underwriters' Maximum
Number, (B) for written requests pursuant to Section 2(a)(ii), that
number of Series C Investor Registrable Securities and Series D
Investor Registrable Securities (if Series D Investors choose to join
in such Demand Registration) requested by the Holders thereof to be
included in such registration, which does not exceed the Underwriters'
Maximum Number (such Registrable Securities to be allocated PRO RATA
among the Holders thereof on the basis of the number of Registrable
Securities requested to be included therein by each such Holder), or
(C) for written requests pursuant to Section 2(a)(iii), that number of
Series B Investor Registrable Securities and Series D Investor
Registrable Securities (if Series D Investors choose to join in such
Demand Registration) requested by the Holders thereof to be included in
such registration, which does not exceed the Underwriters' Maximum
(such Registrable Securities to be allocated PRO RATA among the Holders
thereof on the basis of the number of Registrable Securities requested
to be included therein by each such Holder);
(ii) if the Underwriters' Maximum Number exceeds (A) for
written requests pursuant to Section 2(a)(i), the number of Series D
Investor Registrable Securities requested by the Holders thereof to be
included in such registration, (B) for written requests pursuant to
Section 2(a)(ii), the number of Series C Investor Registrable
Securities and Series D Investor Registrable Securities (if Series D
Investors choose to join in such Demand Registration) requested by the
Holders thereof to be included in such registration, or (C) for written
requests pursuant to Section 2(a)(iii), the number of Series B Investor
Registrable Securities and Series D Investor Registrable Securities (if
Series D Investors choose to join in such Demand) requested by the
Holders thereof to be included in such registration, then in each
instance the Company will be obligated and required to include in such
registration that number of Registrable Securities (including any
Series D Investor Registrable Securities requested by the Holders
thereof to be included in such registration as to which Series D
Investors did NOT choose to join in such Demand Registration) requested
by the Holders thereof to be included in such registration (such
Registrable Securities to be allocated PRO RATA among the Holders
thereof on the basis of the number of Registrable Securities requested
to be included therein by each such Holder) and which shall not be
greater than such excess;
(iii) if the Underwriters' Maximum Number exceeds the sum of
the number of Registrable Securities which the Company shall be
required to include in such Demand Registration pursuant to Sections
2(c)(i)-(ii) above, then the Company may include in such registration
that number of other Securities which persons (other than the Holders
as such) shall have requested to be included in such registration and
which shall not be greater than such excess; and
(iv) if the Underwriters' Maximum Number exceeds the sum of
the numbers pursuant to Sections 2(c)(i)-(iii) above, then the Company
will be entitled to include in such registration that number of
securities which shall have been requested by the Company to be
included in such registration for the account of the Company and which
shall not be greater than such excess.
Neither the Company nor any of its stockholders (other than Holders of
Registrable Securities) shall be entitled to include any securities in
any underwritten Demand Registration unless the Company or such
stockholders (as the case may be) shall have agreed in writing to sell
such securities on the same terms and conditions as shall apply to the
Registrable Securities to be included in such Demand Registration.
(d) ORDER OF DEMANDS. Notwithstanding anything to the contrary
contained in this Section 2, the Demand Registration rights set forth in
Sections 2(a)(i), 2(a)(ii) and 2(a)(iii) shall be exercisable by the Holders
thereof, as the case may be, in the order made, so that if a demand is first
made under Section 2(a)(i), it shall be honored first and shall take precedence
over a demand made thereafter under Sections 2(a)(ii) and 2(a)(iii), if a demand
is first made under Section 2(a)(ii), it shall be honored first and take
precedence over a demand made thereafter under Sections 2(a)(i) or 2(a)(iii),
and so on. In the event that requests for registration are made under any of
Sections 2(a)(i), 2(a)(ii) and 2(a)(iii) simultaneously, the Company shall use
its reasonable efforts to register, in accordance with this Agreement, the
Series D Investor Registrable Securities in accordance with Sections 2(a)(i) and
2(c)(i)(A) hereof.
(e) SELECTION OF UNDERWRITERS. If a written request for a Demand
Registration is made pursuant to Section 2(a)(i), then the Holders of a majority
of the Series D Investor Registrable Securities to be included in any Demand
Registration shall determine whether or not such Demand Registration shall be
underwritten and shall select the investment banker(s) and managing
underwriter(s) to administer such offering. If a written request for a Demand
Registration is made pursuant to Section 2(a)(ii), then the Holders of a
majority of the Series C Investor Registrable Securities and the Series D
Investor Registrable Securities (if Series D Investors choose to join in such
Demand Registration) to be included in any Demand Registration shall determine
whether or not such Demand Registration shall be underwritten and shall select
the investment banker(s) and managing underwriter(s) to administer such
offering. If a written request for a Demand Registration is made pursuant to
Section 2(a)(iii), then the Holders of a majority of the Series B Investor
Registrable Securities and the Series D Investor Registrable Securities (if
Series D Investors choose to join in such Demand Registration) to be included in
any Demand Registration shall determine whether or not such Demand Registration
shall be underwritten and shall select the investment banker(s) and managing
underwriter(s) to administer such offering.
(f) UNLIMITED REGISTRATIONS ON FORM S-3. Subject to the limitations set
forth in this Section 2(f), after its initial underwritten Public Sale, the
Company shall use its best efforts to qualify, as promptly as practicable, for
registration on Form S-3 or any comparable or successor form or forms. After the
Company has qualified for the use of Form S-3, in addition to the rights
contained in the foregoing provisions of this Section 2: Holders of not less
than 30% of the then outstanding Series D
Investor Registrable Securities, Holders of not less then 30% of the then
outstanding Series B Investor Registrable Securities and Holders of not less
than 30% of the then outstanding Series B Registrable Securities, each shall
have the right at any time and from time to time to request in writing a
registration on Form S-3 (or any successor form) (which request will specify the
number of shares of Registrable Securities to be registered and will also
specify the intended method of disposition thereof), PROVIDED, HOWEVER, that the
Company shall not be obligated to effect (y) more than one such registration on
Form S-3 (or any successor form) for each of the Series D Investors, the Series
C Investors and the Series B Investors, as the case may be, in any twelve (12)
consecutive month period and (z) any such Series B Investor Registrable
Securities having an aggregate offering price of less than $1,000,000 (based on
the then current public market price).
(g) Termination
(i) DEMAND REGISTRATION UNDER SECTION 2(i). The rights and
obligations set forth in Section 2(a)(i) above shall automatically
expire on the tenth (10th) anniversary hereof.
(ii) DEMAND REGISTRATION UNDER SECTION 2(ii). The rights and
obligations set forth in Section 2(a)(ii) above shall automatically
expire on December 8, 2007.
(iii) DEMAND REGISTRATION UNDER SECTION 2(iii). The rights and
obligations set forth in Section 2(a)(iii) above shall automatically
expire on the tenth (10th) anniversary of an initial public offering of
shares of Common Stock pursuant to a Registration Statement at a price
to the public of not less than $15 per share (subject to appropriate
adjustment in the event of any stock dividend, stock split, combination
or other similar recapitalization affecting the Common Stock) and
resulting in gross proceeds to the Company of not less than
$10,000,000.
3. PIGGYBACK REGISTRATIONS.
(a) RIGHTS TO PIGGYBACK.
(i) If (and on each occasion that) the Company proposes to
register any of its equity securities under the Securities Act either
for the Company's own account or for the account of any of its
stockholders (other than for Holders pursuant to Section 2 hereof
entitled to Demand Registrations and other than pursuant to a Form S-4
or S-8) (each such registration not withdrawn or abandoned prior to the
effective date thereof being herein called a "PIGGYBACK REGISTRATION"),
the Company will give written notice to all Holders of Registrable
Securities of such proposal not later than the earlier to occur of (A)
the tenth day following the receipt by the Company of notice of
exercise of any registration rights by any persons, and (B) the
thirtieth day prior to the anticipated filing date of such Piggyback
Registration.
(ii) Subject to the provisions contained in paragraph (b) of
this Section 3 and in the last sentence of this subparagraph (ii), (A)
the Company will be obligated and required to include in each Piggyback
Registration all Registrable Securities with respect to which the
Company shall receive from Holders of Registrable Securities, within
fifteen (15) days after the date on which the Company shall have given
written notice of such Piggyback Registration to all Holders of
Registrable Securities pursuant to Section 3(a)(i) hereof, the written
requests of such Holders for inclusion in such Piggyback Registration,
and (B) the Company will use its best efforts in good faith to effect
promptly the registration of all such Registrable Securities. The
Holders of Registrable Securities shall be permitted to withdraw all or
any part of the Registrable Securities of such Holders from any
Piggyback Registration at any time prior to the effective date of such
Piggyback Registration unless such Holders of Registrable Securities
shall have entered into a written agreement with the Company's
underwriters establishing the terms and conditions under which such
Holders would be obligated to sell such securities in such Piggyback
Registration. The Company will not be obligated or required to include
any Registrable Securities in any registration effected solely to
implement an employee benefit plan or a transaction to which Rule 145
of the Commission is applicable.
(b) PRIORITY ON PIGGYBACK REGISTRATIONS. If a Piggyback Registration is
an underwritten registration, and the managing underwriters shall give written
advice to the Company of an Underwriters' Maximum Number, then: (i) the Company
shall be entitled to include in such registration that number of securities
which the Company proposes to offer and sell for its own account in such
registration and which does not exceed the Underwriters' Maximum Number; (ii) if
the Underwriters' Maximum Number exceeds the number of securities which the
Company proposes to offer and sell for its own account in such registration,
then the Company shall include in such registration that number of Registrable
Securities which the Holders thereof shall have requested be included in such
registration and which shall not be greater than such excess and such
Registrable Securities shall be allocated PRO RATA among the Holders thereof on
the basis of the number of Registrable Securities requested to be included
therein by each such Holder; and (iii) if the Underwriters' Maximum Number
exceeds the sum of the number of Registrable Securities which the Company shall
be required to include in such registration pursuant to clause (ii) and the
number of securities which the Company proposes to offer and sell for its own
account in such registration, then the Company may include in such registration
that number of other securities which other persons shall have requested be
included in such registration and which shall not be greater than such excess.
(c) SELECTION OF UNDERWRITERS. In any Piggyback Registration, the
Company shall (unless the Company shall otherwise agree) have the right to
select the investment bankers and managing underwriters in such registration.
4. LOCKUP AGREEMENTS.
(a) RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF REGISTRABLE SECURITIES.
Each Holder of Registrable Securities, if the Company or the managing
underwriters so request in connection with any underwritten registration of the
Company' securities, will not, without the prior written consent of the Company
or such underwriters and provided that the officers, directors and all Holders
of at least 5% of Registrable Securities also agree not to, effect any public
sale or other distribution of any equity securities of the Company, including
any sale pursuant to Rule 144, during the seven (7) days prior to, and during
the one hundred eighty (180) day period commencing on the effective date of such
underwritten registration, except in connection with such underwritten
registration.
(b) RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The Company agrees not
to effect any public sale or other distribution of its equity securities, or any
securities convertible into or exchangeable or exercisable for such equity
securities, during the period commencing on the seventh (7th) day prior to, and
ending on the one hundred eightieth (180th) day following, the effective date of
any underwritten Demand or Piggyback Registration, except in connection with any
such underwritten registration and except for any offering pursuant to an
employee benefit plan approved by the Company's Board of Directors and
registered on Form S-8 (or comparable form adopted by the Commission).
5. REGISTRATION PROCEDURES.
(a) Whenever the Holders of Registrable Securities have requested that
any Registrable Securities be registered pursuant to this Agreement, the Company
will use its best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof, and pursuant thereto the Company will as expeditiously as possible:
(i) prepare and file with the Commission a Registration
Statement with respect to such Registrable Securities and use its best
efforts to cause such Registration Statement to become effective
(PROVIDED, that before filing a Registration Statement or Prospectus or
any amendments or supplements thereto, the Company will furnish to
counsel selected by the holders of Registrable Securities covered by
such Registration Statement, copies of all such documents proposed to
be filed, which documents will be subject to the timely review of such
counsel and the Company will not file any Registration Statement or
amendment thereto or any Prospectus or any supplement thereto,
including documents incorporated by reference, to which such counsel
shall
reasonably object) and remain effective until the Registrable
Securities covered by such Registration Statement have been sold;
(ii) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective until the earliest to occur of (a) the sale of all
such Registrable Securities, (b) the sale by the underwriter(s) of all
such Registrable Securities purchase by it/them, and (c) 180 days after
the effective date of the Registration Statement and, comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during such effective
period in accordance with the intended methods of disposition by the
sellers thereof set forth in such Registration Statement and cause the
Prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act;
(iii) upon request, furnish to each seller of Registrable
Securities such number of copies of such Registration Statement, each
amendment and supplement thereto, the Prospectus included in such
Registration Statement (including each preliminary Prospectus and each
Prospectus filed under Rule 424 of the Securities Act) and such other
documents as each such seller may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by each
such seller (it being understood that the Company consents to the use
of the Prospectus and any amendment or supplement thereto by such
seller in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or supplement
thereto);
(iv) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of
such jurisdictions as any seller reasonably requests, use its best
efforts to keep each such registration or qualification effective,
including through new filings, amendments or renewals, during the
period such Registration Statement is required to be kept effective,
and do any and all other acts and things which may be reasonably
necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned
by such seller;
(v) notify each seller of such Registrable Securities, at any
time when a Prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of
which the Prospectus included in such Registration Statement contains
an untrue statement of a material fact or omits any fact necessary to
make the statements therein not misleading, and, at the request of any
such seller, the Company will
promptly prepare (and, when completed, give notice to each seller of
Registrable Securities) a supplement or amendment to such Prospectus so
that, as thereafter delivered to the purchasers of such Registrable
Securities, such Prospectus will not contain an untrue statement of a
material fact or omit to state any fact necessary to make the
statements therein not misleading; PROVIDED that upon such notification
by the Company, each seller of such Registrable Securities will not
offer or sell such Registrable Securities until the Company has
notified such seller that it has prepared a supplement or amendment to
such Prospectus and delivered copies of such supplement or amendment to
such Seller;
(vi) cause all such Registrable Securities to be listed, prior
to the date of the first sale of such Registrable Securities pursuant
to such registration, on each securities exchange on which similar
securities issued by the Company are then listed and, if not so listed,
to be listed with the National Association of Securities Dealers
automated quotation system ("NASDAQ");
(vii) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such
Registration Statement;
(viii) enter into all such customary agreements (including
underwriting agreements in customary form) and take all such other
actions as counsel for the holders of Registrable Securities being sold
or the underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities (including,
without limitation, effecting a stock split or a combination of
shares);
(ix) make available for inspection on a confidential basis by
any seller, any underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney, accountant or other
agent retained by any such seller or underwriter (in each case after
reasonable prior notice), all financial and other records, pertinent
corporate documents and properties of the Company, and cause the
Company's officers, directors, employees and independent accountants to
supply on a confidential basis all information reasonably requested by
any such seller, underwriter, attorney, accountant or agent in
connection with such Registration Statement;
(x) permit any holder of Registrable Securities which holder,
in its sole and exclusive judgment, might be deemed to be an
underwriter or a controlling person of the Company within the meaning
of Section 15 of the Securities Act, to participate in the preparation
of such registration or comparable statement and to permit the
insertion therein of material, furnished to the Company in writing,
which in the reasonable judgment of such holder and its counsel should
be included, provided that such material shall be
furnished under such circumstances as shall cause it to be subject to
the indemnification provisions provided pursuant to Section 8(b)
hereof;
(xi) in the event of the issuance of any stop order suspending
the effectiveness of a Registration Statement, or of any order
suspending or preventing the use of any related Prospectus or
suspending the qualification of any Registrable Securities included in
such Registration Statement for sale in any jurisdiction, the Company
will use its best efforts promptly to obtain the withdrawal of such
order;
(xii) if requested by the managing underwriter or underwriters
or any holder of Registrable Securities in connection with any sale
pursuant to a Registration Statement, promptly incorporate in a
Prospectus supplement or post-effective amendment such information
relating to such underwriting as the managing underwriter or
underwriters or such holder reasonably requests to be included therein,
and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after being notified of
the matters incorporated in such Prospectus supplement or
post-effective amendment;
(xiii) cooperate with the holders of Registrable Securities
and the managing underwriter or underwriters, if any, to facilitate the
timely preparation and delivery of certificates (not bearing any
restrictive legends) representing Registrable Securities to be sold
under such registration, and enable such Registrable Securities to be
in such denominations and registered in such names as the managing
underwriter or underwriters, if any, or such holders may request;
(xiv) use its best efforts to cause the Registrable Securities
to be registered with or approved by such other governmental agencies
or authorities within the United States and having jurisdiction over
the Company as may reasonably be necessary to enable the seller or
sellers thereof or the underwriter or underwriters, if any, to
consummate the disposition of such Registrable Securities;
(xv) use its best efforts to obtain:
(A) at the time of effectiveness of each
registration, a "comfort letter" from the Company's
independent certified public accountants covering such matters
of the type customarily covered by "cold comfort letters" as
the Holders of a majority of the Registrable Securities
covered by such registration and the underwriters reasonably
request; and
(B) at the time of any underwritten sale pursuant to
a Registration Statement, a "bring-down comfort letter", dated
as of the
date of such sale, from the Company's independent certified
public accountants covering such matters of the type
customarily covered by comfort letters as the Holders of a
majority of the Registrable Securities covered by such
Registration Statement and the underwriters reasonably
request;
(xvi) use its best efforts to obtain, at the time of
effectiveness of each Piggyback Registration and at the time of any
sale pursuant to each registration, an opinion or opinions, favorable
in form and scope to the Holders of a majority of the Registrable
Securities covered by such registration, from counsel to the Company in
customary form; and
(xvii) otherwise comply with all applicable rules and
regulations of the Commission, and make generally available to its
security holders (as contemplated by Section 11(a) under the Securities
Act) an earnings statement satisfying the provisions of Rule 158 under
the Securities Act no later than ninety (90) days after the end of the
twelve month period beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the
Registration Statement, which statement shall cover said twelve month
period.
6. COOPERATION BY PROSPECTIVE SELLERS, ETC.
(a) Each prospective seller of Registrable Securities will furnish to
the Company in writing such information as the Company may reasonably require
from such seller, and otherwise reasonably cooperate with the Company in
connection with any Registration Statement with respect to such Registrable
Securities.
(b) The failure of any prospective seller of Registrable Securities to
furnish any information or documents in accordance with any provision contained
in this Agreement shall not affect the obligations of the Company under this
Agreement to any remaining sellers who furnish such information and documents
unless in the reasonable opinion of counsel to the Company or the underwriters,
such failure impairs or may impair the viability of the offering or the legality
of the Registration Statement or the underlying offering.
(c) The Holders of Registrable Securities included in any Registration
Statement will not (until further notice) effect sales thereof after receipt of
telegraphic or written notice from the Company to suspend sales to permit the
Company to correct or update such Registration Statement or Prospectus; but the
obligations of the Company with respect to maintaining any Registration
Statement current and effective shall be extended by a period of days equal to
the period such suspension is in effect.
(d) At the end of any period during which the Company is obligated to
keep any Registration Statement current and effective as provided by Section 5
hereof
(and any extensions thereof required by the preceding paragraph (c) of this
Section 6), the Holders of Registrable Securities included in such Registration
Statement shall discontinue sales of shares pursuant to such Registration
Statement upon receipt of notice from the Company of its intention to remove
from registration the shares covered by such Registration Statement which remain
unsold, and such Holders shall notify the Company of the number of shares
registered which remain unsold promptly after receipt of such notice from the
Company.
7. REGISTRATION EXPENSES.
(a) All costs and expenses incurred or sustained in connection with or
arising out of each registration pursuant to Sections 2 or 3 hereof, including,
without limitation, all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel for the underwriters in connection with the blue sky
qualification of Registrable Securities), printing expenses, messenger,
telephone and delivery expenses, fees and disbursements of counsel for the
Company, reasonable fees and disbursements of one counsel representing the
Holders of Registrable Securities, such counsel to be selected by the Holders of
a majority of the Registrable Securities to be included in such registration,
fees and disbursements of all independent certified public accountants
(including the expenses relating to the preparation and delivery of any special
audit or "cold comfort" letters required by or incident to such registration),
and fees and disbursements of underwriters (excluding discounts, commissions and
fees of counsel in excess of $10,000), the reasonable fees and expenses of any
special experts retained by the Company of its own initiative or at the request
of the managing underwriters in connection with such registration, and fees and
expenses of all (if any) other persons retained by the Company are herein
called, collectively, "REGISTRATION EXPENSES". Registration Expenses will be
borne and paid by the Company for all Demand Registrations and Piggyback
Registrations hereunder, PROVIDED, that if a Demand Registration pursuant to
Section 2(a)(ii) is withdrawn by the Holders of Series C Investor Registrable
Securities (for reasons other than attributable to a Directive), then such
Holders of Series C Investor Registrable Securities will bear and pay all such
Registration Expenses.
The Company will pay its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any annual audit, and the fees and
expenses incurred in connection with the listing of the securities to be
registered on each securities exchange on which similar securities of the
Company are then listed.
(b) The Company will not bear the cost of nor pay for any stock
transfer taxes imposed in respect of the transfer of any Registrable Securities
to any purchaser thereof by any Holder of Registrable Securities in connection
with any registration of Registrable Securities pursuant to this Agreement.
(c) To the extent that Registration Expenses incident to any
registration are, under the terms of this Agreement, not required to be paid by
the Company, each Holder of Registrable Securities included in such registration
will pay all Registration Expenses which are clearly solely attributable to the
registration of such Holder's Registrable Securities so included in such
registration, and all other Registration Expenses not so attributable to one
Holder will be borne and paid by all sellers of securities included in such
registration in proportion to the number of securities so included by each such
seller.
8. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company will indemnify each
Holder requesting or joining in a registration and each underwriter of the
securities so registered, the officers, directors and partners of each such
Person and each Person who controls any thereof (within the meaning of the
Securities Act) against any and all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of any material fact contained in any Prospectus,
offering circular or other document incident to any registration, qualification
or compliance (or in any related Registration Statement, notification or the
like) or any omission (or alleged omission) to state therein any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act applicable to the Company and relating to
any action or inaction required of the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse each
such Holder, underwriter, officer, director, partner and controlling person for
any legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action;
PROVIDED, HOWEVER, that the Company will not be liable in any such case to the
extent that any such claim, loss, damage or liability arises out of or is based
on any untrue statement or omission based upon written information furnished to
the Company in an instrument duly executed by such Holder, underwriter, officer,
director, partner or controlling person and stated to be specifically for use in
such Prospectus or Registration Statement.
(b) INDEMNIFICATION BY EACH HOLDER. Each Holder requesting or joining
in a registration will indemnify each underwriter of the securities so
registered, the Company and its officers and directors and each person, if any,
who controls any thereof (within the meaning of the Securities Act) and their
respective successors in title and assigns against any and all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of any material fact
contained in any Prospectus, offering circular or other document incident to any
registration, qualification or compliance (or in any related Registration
Statement, notification or the like) or any omission (or alleged omission) to
state therein any material fact required to be stated therein or necessary to
make the statement therein not misleading, and such Holder will reimburse each
underwriter, the Company and each other person indemnified pursuant to this
paragraph (b) for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action; PROVIDED, HOWEVER, that this paragraph (b) shall apply only
if (and only to the extent that) such statement or omission was made in reliance
upon written information furnished to such underwriter or the Company in an
instrument duly executed by such Holder and stated to be specifically for use in
such Prospectus, offering circular or other document (or related Registration
Statement, notification or the like) or any amendment or supplement thereto;
and, PROVIDED FURTHER, that each Holder's liability hereunder with respect to
any particular registration shall be limited to an amount equal to the net
proceeds received by such Holder from the Registrable Securities sold by such
Holder in such registration.
(c) INDEMNIFICATION PROCEEDINGS. Each party entitled to indemnification
pursuant to this Section 8 (the "INDEMNIFIED PARTY") shall give notice to the
party required to provide indemnification pursuant to this Section 8 (the
"INDEMNIFYING PARTY") promptly after such Indemnified Party acquires actual
knowledge of any claim as to which indemnity may be sought, and shall permit the
Indemnifying Party (at its expense) to assume the defense of any 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
acceptable to the Indemnified Party, and the Indemnified Party may participate
in such defense at such party's expense; and PROVIDED, FURTHER, that the failure
by any Indemnified Party to give notice as provided in this paragraph (C) shall
not relieve the Indemnifying Party of its obligations under this Section 8
except to the extent that the failure results in a failure of actual notice to
the Indemnifying Party and such Indemnifying Party is damaged solely as a result
of the failure to give notice. 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 and no Indemnified Party shall consent to entry of any
judgment or settle such claim or litigation without the prior written consent of
the Indemnifying Party so long as the Indemnifying Party has, in writing,
acknowledged in writing its obligation to indemnify and is in compliance with
all of its obligations hereunder to indemnify the Indemnified Party for all
amounts in connection with such claim or Litigation and which consent shall not
be unreasonably withheld. The reimbursement required by this Section 8 shall be
made by periodic payments during the course of the investigation or defense, as
and when bills are received or expenses incurred.
9. CONTRIBUTION IN LIEU OF INDEMNIFICATION. If the indemnification
provided for in Section 8 hereof is unavailable to a party that would have been
an Indemnified Party under any such section in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each party that would have been an Indemnifying Party thereunder 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 (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and such Indemnified Party on
the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof). 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 the
Indemnifying Party or such Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and each Holder of Registrable Securities
agree that it would not be just and equitable if contribution pursuant to this
Section 9 were determined by PRO-RATA allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 9. The amount paid or payable by an Indemnified Party
as a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this Section 9 shall include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding any
provision of this Section 9 to the contrary, (a) 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 and (b) each Holder's liability hereunder with
respect to any particular registration shall be limited to an amount equal to
the net proceeds received by such Holder from the Registrable Securities sold by
such Holder in such registration.
10. RULE 144 REQUIREMENTS; FORM S-3. From time to time after the
earlier to occur of (a) the ninetieth day following the date on which there
shall first become effective a Registration Statement filed by the Company under
the Securities Act, or (b) the date on which the Company shall register a class
of securities under Section 12 of the Exchange Act, the Company will make every
effort in good faith to take all steps necessary to ensure that the Company will
be eligible to register securities on Form S-3 (or any comparable form adopted
by the Commission) as soon thereafter as possible and will remain eligible to so
register securities on Form S-3 (including taking all action as is necessary and
filing in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act), and to make publicly
available and available to the Holders of Registrable Securities, pursuant to
Rule 144 or Rule 144A of the Commission under the Securities Act, such
information as shall be necessary to enable the Holders of Registrable
Securities to make sales of Registrable Securities pursuant to such Rules. The
Company will furnish to any Holder of Registrable Securities, upon request made
by such Holder at any time after the undertaking of the Company in the preceding
sentence shall have first become effective, a written statement signed by the
Company, addressed to such Holder, describing briefly the action the Company has
taken or proposes to take to comply with the current public information
requirements of Rule 144 and Rule 144A.
The Company will, at the request of any Holder of Registrable Securities, upon
receipt from such Holder of a certificate certifying (i) that such Holder has
held such Registrable Securities for a period of not less than two (2)
consecutive years, (ii) that such Holder has not been an affiliate (as defined
in Rule 144) of the Company for a period of at least ninety (90) days, and (iii)
as to such other matters as may be appropriate in accordance with such Rule,
remove from the stock certificates representing such Registrable Securities that
portion of any restrictive legend which relates to the registration provisions
of the Securities Act.
11. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any underwritten registration pursuant to this Agreement unless
such Person (i) agrees to sell such Person's securities on the basis provided in
any underwriting arrangements approved by the persons entitled, under the
provisions hereof, to approve such arrangements, and (ii) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required by the terms of such underwriting
arrangements. Any Holder of Registrable Securities to be included in any
underwritten registration shall be entitled at any time to withdraw such
Registrable Securities from such registration prior to its effective date in the
event that such Holder shall disapprove of any of the terms of the related
underwriting agreement.
12. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company has not previously entered
into any agreement (which has not been replaced and superseded by this
Agreement) with respect to its Common Stock granting any registration rights to
any Person, and will not on or after the date of this Agreement enter into any
agreement with respect to its securities which grants demand registration rights
to anyone or which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless such amendment, modification, supplement, waiver or consent is
approved in writing by the Company and by the Holders of not less than fifty
percent (50%) of the then outstanding Series D Investor Registrable Securities
and, with respect to amendments, modifications, supplements, waivers and
consents affecting (i) Sections 2(a)(ii) and 2(b), approval in writing by the
Holders of not less than 50% of the then outstanding Series C Investor
Registrable Securities shall also be required, and (ii) Sections 2(a)(iii) and
2(b), approval in writing by the Holders of not less than 50% of the Series B
Investor Registrable Securities then outstanding shall also be required.
(c) REGISTRABLE SECURITIES HELD BY THE COMPANY. Whenever the consent or
approval of Holders of Registrable Securities is required pursuant to this
Agreement,
Registrable Securities held by the Company shall not be counted in determining
whether such consent or approval was duly and properly given by such Holders.
(d) TERM. Subject to Section 2(g), in this Agreement shall continue in
full force and effect so long as any Holder holds any Registrable Securities.
(e) REMEDIES. In the event of a breach by the Company of its
obligations under this Agreement, each Holder, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.
(f) NOTICES. Any notice provided for in this Agreement will be in
writing and will be deemed properly delivered if either personally delivered or
sent by overnight courier or telecopier or mailed certified or registered mail,
return receipt requested, postage prepaid, to the recipient at the address
specified below:
(i) if to a Holder, at such Holder's address on the stock
transfer books of the Company; and
(ii) if to the Company, at:
Art Technology Group, Inc.
000 Xxxxxxxxxx Xxxxxx - Xxxxx 00
Xxxxxx, XX 00000
Attention: Mr. Xxxx Xxxxx
and thereafter at such other address, notice of which is given in accordance
with the provisions of this Section 12(f). Any such notice shall be effective
(A) if delivered personally or by telecopy, when received, (B) if sent by
overnight courier, when receipted for, and (C) if mailed, five (5) days after
being mailed as described above.
(g) SUCCESSORS AND ASSIGNS. This Agreement and the rights of any Holder
hereunder (i) shall not be assigned by any Series B Holder, EXCEPT that a Series
B Holder may assign the rights hereunder to one or more Affiliates, PROVIDED
that the transferee agrees to be bound by all of the terms and conditions of
this Agreement by executing and delivering to the Company an Instrument of
Accession, (ii) may be assigned by any Series C Holder, PROVIDED that the
underlying transfer of shares is made in compliance with the provisions of the
Stockholders' Agreement and the transferee agrees to be bound by all of the
terms and conditions of this Agreement by executing and delivering to the
Company an Instrument of Accession, and (iii) may be assigned by any Series D
Holder, PROVIDED that the transferee agrees to be bound by
all of the terms and conditions of this Agreement by executing and delivering to
the Company an Instrument of Accession.
(h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same instrument.
(i) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they
affect their meaning, construction or effect.
(j) GOVERNING LAW. The validity, performance, construction and effect
of this Agreement shall be governed by and construed in accordance with the
internal laws of the Commonwealth of Massachusetts, without giving effect to
principles of conflicts of law.
(k) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(l) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
any Registrable Securities.
[SIGNATURE PAGES TO FOLLOW]
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as an instrument under seal as of the date first written above.
THE COMPANY:
ART TECHNOLOGY GROUP, INC.
By: /s/ Xxxx Xxxxx
-------------------------------------------
Name:
Title: President/CEO
SERIES D HOLDERS:
TUDOR PRIVATE EQUITY FUND, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
Tudor Global Trading LLC as General Partner
RAPTOR GLOBAL FUND, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
Tudor Investment Corporation as General Partner
RAPTOR GLOBAL FUND, LTD.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
Tudor Investment Corporation as Investment Partner
SERIES C HOLDERS:
/s/ Xxxxxx X. Xxxxxx
------------------------------------------
Xxxxxx X. Xxxxxx
/s/ Xxxxxxx Xxxxx
------------------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxxxx Xxxxxxxx
------------------------------------------
The Xxxxxxxx Long Range Partnership
By:
Name: Xxxxxxx Xxxxxxxx
Title: General Partner
/s/ Xxx X. Xxxxxxx
------------------------------------------
Xxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxx, Xx. Trust
------------------------------------------
/s/ Xxxxx X. Xxxxxx, Xx. Trustee
------------------------------------------
Xxxxx X. Xxxxxx Xx. Trust
/s/ Xxxxxxxx Family Limited Partnership
------------------------------------------
Xxxxxxxx Family Limited Partnership
By: /s/ Xxxxxxxx X. XxXxxxxx
Name: Xxxxxxxx X. XxXxxxxx
Title: Trustee
/s/ Xxxx X. Xxxxxx
------------------------------------------
Wyndcrest ATG Holdings, Ltd.
By:
Name: Xxxx X. Xxxxxx
Title: General Partner
/s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxxxx Xxxxx
------------------------------------------
Xxxxxxxx Xxxxx
/s/ Xxxxxxx Xxxxxxxx
------------------------------------------
Xxxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxx
------------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxx Xxxxxxxx
------------------------------------------
Xxxx Xxxxxxxx
/s/ Xxxxx X. Xxxxx
------------------------------------------
Xxxxx X. Xxxxx
------------------------------------------
Silicon Valley Bank
By:
Name:
Title:
------------------------------------------
Osprey Venture Capital Limited
Partnership
By:
Name:
Title:
SERIES B HOLDER:
SOFTBANK VENTURES, INC.
By: /s/ Yoshitaka Kitao
-----------------------------------------
Name: Yoshitaka Kitao
Title: President and CEO
SCHEDULE 1
TO REGISTRATION
RIGHTS AGREEMENT
LIST OF
SERIES D HOLDERS
Tudor Private Equity Fund, L.P.
Raptor Global Fund, L.P.
Raptor Global Fund, Ltd.
SCHEDULE 2
TO REGISTRATION
RIGHTS AGREEMENT
LIST OF
SERIES C HOLDERS
Xxxxxx X. Xxxxxx
Xxxxxxx Xxxxx
The Xxxxxxxx Long Range Partnership
Xxx X. Xxxxxxx
Xxxxx X. Xxxxxx Xx. Trust
Xxxxxxxx Family Limited Partnership
Wyndcrest ATG Holdings, Ltd.
Xxxxxx X. Xxxxxxx
Xxxxxxxx Xxxxx
Xxxxxxx Xxxxxxxx
Xxxxxx Xxxxxx
Xxxx Xxxxxxxx
Xxxxx X. Xxxxx
Osprey Venture Capital Limited Partnership
SCHEDULE 3
TO REGISTRATION
RIGHTS AGREEMENT
SERIES B HOLDER
SOFTBANK Ventures, Inc.
SCHEDULE 4
TO REGISTRATION
RIGHTS AGREEMENT
INSTRUMENT OF ACCESSION
Reference is made to that certain Registration Rights Agreement dated
as of August 18, 1998, a copy of which is attached hereto (as amended and in
effect from time to time, the "REGISTRATION RIGHTS AGREEMENT"), among Art
Technology Group, Inc. (the "COMPANY") and the Holders (as defined therein).
The undersigned, _____________________, in order to become the owner or
holder of ______ shares of the Common Stock, $_______ par value per share,
collectively, or Registrable Securities (as defined in the Registration Rights
Agreement) (the "SHARES") of the Company, hereby agrees that by execution hereof
the undersigned is a Holder party to the Registration Rights Agreement subject
to all of the restrictions and conditions applicable to Holders set forth in
such Registration Rights Agreement, and all of the Shares purchased by the
undersigned in connection herewith (and any and all shares of stock of the
Company issued in respect thereof) are subject to all the restrictions and
conditions applicable to Registrable Securities as set forth in the Registration
Rights Agreement. This Instrument of Accession shall take effect and shall
become a part of said Registration Rights Agreement immediately upon execution.
Executed as of the date set forth below under the laws of the State of
Delaware.
Signature:
---------------------------
Address:
---------------------------
---------------------------
---------------------------
Date:
---------------------------
Accepted:
ART TECHNOLOGY GROUP, INC.
By:
----------------------------------
Date:
----------------------------------
