EXHIBIT 4.1
THIRD AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
THIRD AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT dated as of
February 24, 1999, by and among ITXC CORP., a Delaware corporation (the
"Company") with its principal place of business at 000 Xxxxxxx Xxxx Xxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000, Xxx Xxxxxx, Xxxx Xxxxxx (Xxx Xxxxxx and Xxxx
Xxxxxx, collectively, "Evslin"), Xxxxxx Xxxxxx ("Jordan" and, together with
Evslin, the "Founders"), and the several persons listed as "Purchasers" on the
signature pages hereto as "Purchasers" (hereinafter at times referred to
individually as a "Purchaser" and collectively as the "Purchasers").
WHEREAS, the Company, the Founders and certain of the Purchasers (the
"April 1998 Purchasers") are parties to a Second Amended and Restated
Registration Rights Agreement dated as of April 27, 1998 (the "Original
Registration Rights Agreement"); and
WHEREAS, pursuant to a Series C Convertible Preferred Stock Purchase
Agreement dated as of February 24, 1999 (the "Series C Stock Purchase
Agreement"), among the Company and certain of the Purchasers (the "February
Purchasers"), the Company has agreed to issue and sell to the February
Purchasers an aggregate of 3,229,975 shares of Series C Convertible Preferred
Stock, $0.001 par value ("Series C Preferred Stock"), of the Company and to
enter into this Agreement; and
WHEREAS, it is a condition to the obligations of the February Purchasers
and the Company under the Series C Stock Purchase Agreement that the parties to
the Original Stockholders Agreement enter into this Agreement in order to amend,
restate and replace the Original Registration Rights Agreement, and to provide
for such additional terms hereinafter set forth, and the parties hereto are
willing to execute this Agreement and be bound by the provisions hereof;
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and in the Series C Stock Purchase Agreement, the parties hereto agree that the
Original Registration Rights Agreement shall be amended and restated in its
entirety to provide as follows:
1. Certain Definitions. As used herein, the following terms shall
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have the following respective meanings:
ITXC Third Amended Registration Rights Agreement
"Common Stock" shall mean the Common Stock, par value $0.001 per
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share, of the Company, or such shares of stock as are issuable upon conversion
thereof.
"Commission" shall mean the Securities and Exchange Commission, or any
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other federal agency at the time administering the Securities Act.
"Conversion Shares" shall mean the shares of Common Stock issued upon
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conversion of the Preferred Shares.
"Evslin Warrants" shall mean warrants to purchase up to 322,581 shares
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of Common Stock issued to Evslin on April 27, 1998 and outstanding as of the
execution of this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Founders Stock" shall mean 3,000,000 shares of Common Stock held by
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Evslin, up to 290,323 shares of Common Stock issuable upon exercise of the
Evslin Warrants and up to 105,572 shares of Common Stock issuable upon exercise
of the Jordan Warrants, the certificates for which, in each case, are required
to bear the legend set forth in Section 2 hereof, excluding any such shares
which have been (i) registered under the Securities Act pursuant to an effective
registration statement filed thereunder and disposed of in accordance with the
registration statement covering them or (ii) publicly sold pursuant to Rule 144
(or any successor or similar rule) adopted under the Securities Act; provided,
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however, that the only securities which the Company shall be required to
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register pursuant to this Agreement shall be shares of Common Stock; provided
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further, however, that in any underwritten public offering contemplated by
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Section 4 or 6 hereof, the holders of Warrants shall be entitled to sell such
Warrants to the underwriters for exercise and the sale of the shares of Common
Stock issued upon such exercise.
"Jordan Warrants" shall mean warrants to purchase up to 117,302 shares
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of Common Stock issued to Jordan on April 27, 1998 and outstanding as of the
execution of this Agreement.
"Public Sale" shall mean any sale of preferred or Common Stock to the
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public pursuant to an offering registered under the Securities Act or to the
public pursuant to the provisions of Rule 144 (or any successor or similar rule)
adopted under the Securities Act.
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"Preferred Shares" shall mean, collectively, the Series B Preferred
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Shares and the Series C Preferred Shares.
"Registration Expenses" shall mean the expenses so described in
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Section 8 hereof.
"Restricted Stock" shall mean (i) 1,178,000 shares of Common Stock
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issued to VocalTec as of the date hereof, (ii) up to 722,000 shares of Common
Stock issuable upon exercise of the VocalTec Warrants, (iii) up to 32,258 shares
of Common Stock issuable upon exercise of the Evslin Warrants, (iv) up to 11,730
shares of Common Stock issuable upon exercise of the Jordan Warrants, (v) the
Conversion Shares, excluding any of such shares which have been (A) registered
under the Securities Act pursuant to an effective registration statement filed
thereunder and disposed of in accordance with the registration statement
covering them or (B) publicly sold pursuant to Rule 144 (or any successor or
similar rule) adopted under the Securities Act, and (vi) the Preferred Shares;
provided, however, that the only securities which the Company shall be required
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to register pursuant to this Agreement shall be shares of Common Stock; provided
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further, however, that in any underwritten public offering contemplated by
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Section 4 or 6 hereof, the holders of Warrants shall be entitled to sell such
Warrants to the underwriters for exercise and the sale of the shares of Common
Stock issued upon such exercise; and provided further that, for purposes of the
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computation of the number of shares of Restricted Stock outstanding, the holders
of Preferred Shares shall be treated as the holders of the Conversion Shares
then issuable upon conversion of such Preferred Shares.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
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any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 8
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hereof.
"Series B Preferred Shares" shall mean an aggregate of 5,865,104
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shares of Series B Convertible Preferred Stock, $0.001 par value, of the
Company, purchased by the April 1998 Purchasers pursuant to the Series B
Convertible Preferred Stock Purchase Agreement dated as of April 27, 1998, among
the Company and the April 1998 Purchasers.
"Series C Preferred Shares" shall mean an aggregate of 3,229,974
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shares of Series C Preferred Stock purchased by the February 1999 Purchasers
pursuant to the Series C Stock Purchase Agreement.
"VocalTec Warrants" shall mean warrants to purchase up to 722,000
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shares of Common Stock issued to VocalTec on October 1, 1997 and outstanding on
the date hereof.
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"Warrants" shall mean, collectively, the Evslin Warrants, the Jordan
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Warrants and the VocalTec Warrants.
2. Restrictive Legend. Each certificate representing one or more
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shares of Restricted Stock or Founders Stock and each certificate issued upon
exchange or transfer thereof, other than in a Public Sale, shall be stamped or
otherwise imprinted with a legend substantially in the following form:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAW, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
THEY HAVE BEEN SO REGISTERED OR AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE."
3. Notice of Proposed Transfer. Prior to any proposed transfer of
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any share of Restricted Stock or Founders Stock (other than under the
circumstances described in Section 4, 5 or 6 hereof), the holder thereof shall
give written notice to the Company of its intention to effect such transfer.
Each such notice shall describe the manner of the proposed transfer and, if
requested by the Company, shall be accompanied by an opinion of counsel
reasonably satisfactory to the Company (it being agreed that Kalow, Springut &
Xxxxxxxx LLP shall be satisfactory) to the effect that the proposed transfer of
the Founders Stock or Restricted Stock, as the case may be, may be effected
without registration under the Securities Act and any applicable state
securities law, whereupon the holder of such Founders Stock or Restricted Stock,
as the case may be, may transfer such Founders Stock or Restricted Stock, as the
case may be, in accordance with the terms of its notice; provided, however, that
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no such opinion or other documentation shall be required if such notice states
that no value is being given for the transfer and covers (i) a distribution by a
partnership to its partners or by a limited liability company to its members or
(ii) a transfer by a partnership, corporation or limited liability company to an
affiliated entity or an entity that is under common management with the
transferring partnership, corporation or limited liability company. Each
certificate of Founders Stock or Restricted Stock, as the case may be,
transferred as above provided shall bear the legend set forth in Section 2,
unless (i) such transfer is to the public in accordance with the provisions of
Rule 144 (or any other rule permitting Public Sale without registration under
the Securities Act) or (ii) the opinion of counsel referred to above is to the
further effect that the transferee and any subsequent transferee (other than an
affiliate of the Company) would be entitled to transfer such securities in a
Public Sale without registration under the Securities Act. The restrictions
provided for in this Section shall not apply to securities that are not required
to bear the legend prescribed by Section 2 in accordance with the provisions of
that Section.
4. Required Registration.
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(a) At any time on or after the first anniversary of the effective
date of an initial public offering of the Company's Common Stock under the
Securities Act, the holders of Restricted Stock constituting at least a majority
of the total Restricted Stock outstanding at such time (excluding Restricted
Stock held by Evslin and Jordan and their permitted transferees from such
calculation) may request the Company to register all or any portion of the
Restricted Stock held by such requesting holder or holders for sale in the
manner specified in such notice.
(b) Promptly following receipt of any notice under this Section 4 (the
"Initial Notice"), the Company shall immediately notify any holders of
Restricted Stock from whom an Initial Notice has not been received and any
holder of Founders Stock and shall use its best efforts to register under the
Securities Act, for Public Sale in accordance with the method of disposition
specified in the Initial Notice from requesting holders, the number of shares of
Restricted Stock specified in the Initial Notice (and the number of shares of
Restricted Stock or Founders Stock specified in any notices received from such
other holders of Restricted Stock and holders of Founders Stock within twenty
(20) days after their receipt of notice from the Company); provided, however,
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that the number of shares of Restricted Stock and Founders Stock to be included
in an underwritten offering may be reduced (first, pro rata among the requesting
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holders of Founders Stock based upon the number of shares of Founders Stock for
which registration has been requested and then, if necessary, pro rata among
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holders of Restricted Stock based upon the aggregate original purchase price
represented by the shares of Restricted Stock for which registration has been
requested) if and to the extent that the managing underwriter, if the proposed
method of disposition specified by the requesting holders in the Initial Notice
shall be an underwritten public offering, shall be of the opinion that such
inclusion would materially adversely affect the marketing of the Restricted
Stock. If such method of disposition shall be an underwritten public offering,
the Company shall designate the managing underwriter of such offering, subject
to the approval of the selling holders of a majority of the Restricted Stock
covered by the offering, which approval shall not be unreasonably withheld. The
Company shall be obligated to register Restricted Stock and Founders Stock
pursuant to this Section 4 on two (2) occasions only; provided that such
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obligation shall be deemed satisfied only when a registration statement covering
all shares of Restricted Stock and Founders Stock specified in notices received
as aforesaid, for sale in accordance with the method of disposition specified by
the requesting holders, shall have become effective and, if such method of
disposition is a firm commitment underwritten public offering, all such shares
shall have been sold pursuant thereto.
(c) Notwithstanding anything to the contrary in this Agreement, (i)
the Company may delay for up to sixty (60) days the filing or effectiveness of a
registration statement pursuant to a request under this Section 4 if the Board
of Directors of the Company shall determine that such a registration would not
be in the best interests of the Company at such time, during which period the
requesting holders may withdraw their request, in which case the requesting
holders will not be deemed to have made a request for registration under this
Section 4 and (ii) if, after any such registration statement is declared
effective, (x) the Board of Directors of the Company shall determine that sales
of securities under such a registration would not be in the best interests of
the Company at such time and (y) the Company requests that selling stockholders
refrain from
ITXC Third Amended Registration Rights Agreement
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selling shares thereunder in any distribution other than an underwritten
offering, the holders of Restricted Stock and Founders Stock shall honor such
request, provided that (a) in no event shall the Company make any request under
this clause (ii) if it has previously made a similar request under clause (ii)
of the last proviso of Section 5(a) hereof, (b) any such request under this
clause (ii) shall not be made on more than one occasion and (c) the aggregate
number of days covered by any such request under this clause (ii) shall not
exceed sixty (60) days.
(d) The Company shall be entitled to include in any registration
statement referred to in this Section 4, for sale in accordance with the method
of disposition specified by the requesting holders in the Initial Notice, shares
of Common Stock to be sold by the Company for its own account, except as and to
the extent that, in the opinion of the managing underwriter (if such method of
disposition shall be an underwritten public offering), such inclusion would
adversely affect the marketing of the Restricted Stock (if any) to be sold.
Except for registration statements on Form S-4, registration statements on Form
S-8, registration statements on a form not available for registering the
Restricted Stock for sale to the public, registration statements on Form S-3 to
be filed by the Company to register shares of Common Stock issued in
consideration for an acquisition, or registration statements on Form S-1
covering solely an employee benefit plan, the Company will not file with the
Commission any other registration statement with respect to its Common Stock,
whether for its own account or that of other holders, from the date of receipt
of an Initial Notice from requesting holders pursuant to this Section 4 until
the completion of the period of distribution of the registration contemplated
thereby or withdrawal of such registration.
5. Form S-3 Registration.
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(a) If at any time (i) the Company shall receive from any holder or
holders of Restricted Stock a written request or requests that the Company
effect a registration of all or any portion of the shares of Restricted Stock on
Form S-3 or any successor thereto and specifying the proposed manner of
disposition of such Shares (an "S-3 Request"), and (ii) the Company is a
registrant under the Securities Act entitled to use Form S-3 or any successor
thereto to register such shares, the Company will:
(i) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other holders of
any shares of Restricted Stock and Founders Stock; and
(ii) as soon as practicable, use its best efforts to effect such
registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate
qualifications under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued
under the Securities Act and any other government requirements or
regulations) as may be so requested and as would permit or facilitate
the sale and distribution of all or such portion of such holder's or
holders' Restricted Stock as are specified in the S-3 Request,
together with all or such portion of the Restricted
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Stock of any holder or holders of Restricted Stock joining in such S-3
Request and all or such portion of the shares of Founders Stock of any
holder or holders of Founders Stock joining in such request as are
specified in a written request given within thirty (30) days after
receipt of such written notice from the Company; provided, however,
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that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 5
more than once in any 180-day period; and provided further, however,
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that the number of shares of Restricted Stock and Founders Stock to be
included in any underwriting effected pursuant to this Section 5 may
be reduced (first, pro rata among the requesting holders of Founders
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Stock based upon the number of shares of Founders Stock for which
registration has been requested and then, if necessary, pro rata among
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holders of Restricted Stock based upon the aggregate original purchase
price represented by the shares of Restricted Stock for which
registration has been requested) if and to the extent that the
managing underwriter, if the proposed method of disposition specified
in the S-3 Request shall be an underwritten public offering, shall be
of the opinion that the inclusion of all shares covered by such
notices would materially adversely affect the marketing of the
Restricted Stock. Subject to the foregoing, the Company shall file a
registration statement covering the Restricted Stock so requested to
be registered as soon as practicable after receipt of the S-3 Request
of the holder or holders of Restricted Stock to do so.
Notwithstanding anything to the contrary in this Agreement, (i) the Company may
delay for up to sixty (60) days the filing or effectiveness of a registration
statement pursuant to a request under this Section 5 if the Board of Directors
of the Company shall determine that such registration would not be in the best
interests of the Company at such time, during which period the requesting
holders may withdraw their request, in which case the requesting holders will
not be deemed to have made a request for registration under this Section 5 and
(ii) if, after any such registration statement is declared effective, (x) the
Board of Directors of the Company shall determine that sales of securities under
such a registration would not be in the best interests of the Company at such
time and (y) the Company requests that selling stockholders refrain from selling
shares thereunder in any distribution other than an underwritten offering, the
holders of Restricted Stock and Founders Stock shall honor such request,
provided that (a) in no event shall the Company make any request under this
clause (ii) if it has previously made a similar request under clause (ii) of the
last proviso of Section 4(c) hereof, (b) any such request under this clause (ii)
shall not be made on more than one occasion and (c) the aggregate number of days
covered by any such request under this clause (ii) shall not exceed sixty (60)
days.
(b) Registrations effected pursuant to this Section 5 shall not be
counted as requests for registration effected pursuant to Section 4.
(c) Commencing one year after the Company becomes subject to the
requirements of Section 12 or 15(d) of the Securities Exchange Act of 1934, as
amended, the
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Company shall use its best efforts to satisfy the registrant requirements
applicable for use of registration statements on Form S-3 (or any successor form
thereto) for the resale of securities by selling stockholders.
6. Incidental Registration. If the Company at any time (other than
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pursuant to Section 4 or 5 hereof) proposes to register any of its Common Stock
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Forms S-4 or S-8 or another form not available for
registering the Restricted Stock for sale to the public, a registration
statement on Form S-3 to be filed by the Company to register shares of Common
Stock issued in consideration for an acquisition, or a registration statement on
Form S-1 covering solely an employee benefit plan), it will give written notice
at such time to all holders of outstanding Restricted Stock and Founders Stock
of its intention to do so. Upon the written request of any such holder, given
within thirty (30) days after receipt of any such notice by the Company, to
register any of its Restricted Stock or Founders Stock, as the case may be
(which request shall state the intended method of disposition thereof), the
Company will use its best efforts to cause the Restricted Stock or Founders
Stock or both, as the case may be, as to which registration shall have been so
requested, to be included in the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent requisite to
permit the sale or other disposition by the holder (in accordance with its
written request) of such Restricted Stock or Founders Stock, as the case may be,
so registered; provided that nothing herein shall prevent the Company from
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abandoning or delaying any such registration at any time. In the event that any
registration pursuant to this Section 6 shall be, in whole or in part, an
underwritten public offering of Common Stock, any request by a holder pursuant
to this Section 6 to register Restricted Stock or Founders Stock, as the case
may be, shall specify that such Restricted Stock or Founders Stock, as the case
may be, is to be included in the underwriting on the same terms and conditions
as the shares of Common Stock otherwise being sold through underwriters under
such registration. The number of shares of Restricted Stock or Founders Stock
or both, as the case may be, to be included in such an underwriting may be
reduced (first, pro rata among the requesting holders of Founders Stock based
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upon the number of shares of Founders Stock for which registration has been
requested and then, if necessary, pro rata among holders of Restricted Stock
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based upon the aggregate original purchase price represented by the shares of
Restricted Stock for which registration has been requested), if and to the
extent that the managing underwriter shall be of the opinion that such inclusion
would adversely affect the marketing of the securities to be sold by the Company
therein; provided, however, that such number of shares of Restricted Stock shall
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not be reduced if any shares are to be included in such underwriting for the
account of any person other than the Company or requesting holders of Restricted
Stock or Founders Stock; and provided, further, that except in the case of the
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Company's initial public offering of Common Stock, in no event shall such number
of shares of Restricted Stock be reduced so that the number of shares of
Restricted Stock so to be registered is less than thirty percent (30%) of the
aggregate number of shares to be offered in such underwriting (excluding
Restricted Stock held by Evslin and Jordan and their permitted transferees from
such
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calculation). If the offering covered by this Section 6 shall be an underwritten
public offering, the Company shall designate the managing underwriter of such
offering.
7. Registration Procedures. If and whenever the Company is
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required by the provisions of Section 4, 5 or 6 hereof to use its best efforts
to effect the registration of any of the Restricted Stock or Founders Stock or
both, as the case may be, under the Securities Act, the Company will, as
expeditiously as possible:
(a) prepare (and afford counsel for the selling holders reasonable
opportunity to review and comment thereon) and file with the Commission a
registration statement (which, in the case of an underwritten public
offering pursuant to Section 4 hereof, shall be on Form X-0, X-0 or other
form of general applicability satisfactory to the managing underwriter
selected as therein provided) with respect to such securities and use its
best efforts to cause such registration statement to become and remain
effective for the period of the distribution contemplated thereby
(determined as hereinafter provided);
(b) prepare (and afford counsel for the selling holders reasonable
opportunity to review and comment thereon) 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 for the period specified in paragraph (a)
above and use its best efforts to comply with the provisions of the
Securities Act with respect to the disposition of all Restricted Stock or
Founders Stock or both, as the case may be, covered by such registration
statement in accordance with the sellers' intended method of disposition
set forth in such registration statement for such period;
(c) furnish to each seller and to each underwriter such number of
copies of the registration statement and the prospectus included therein
(including each preliminary prospectus) as such persons may reasonably
request in order to facilitate the Public Sale or other disposition of the
Restricted Stock or Founders Stock or both, as the case may be, covered by
such registration statement;
(d) use its best efforts to register or qualify the Restricted Stock
or Founders Stock or both, as the case may be, covered by such registration
statement under the securities or blue sky laws of such jurisdictions as
the sellers of Restricted Stock or Founders Stock or both, as the case may
be, or, in the case of an underwritten public offering, the managing
underwriter, shall reasonably request (provided that the Company will not
be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this paragraph
(d), (ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any jurisdiction);
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(e) use its best efforts to list the Restricted Stock covered by such
registration statement with any securities exchange on which any Common
Stock of the Company is then listed;
(f) immediately notify each seller under such registration statement
and each underwriter, 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 contained in such registration
statement, as then in effect, includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing;
(g) use its best efforts (if the offering is underwritten) to furnish,
at the request of any seller, on the date that Restricted Stock or Founders
Stock or both, as the case may be, is delivered to the underwriters for
sale pursuant to such registration: (i) an opinion dated such date of
counsel representing the Company for the purposes of such registration,
addressed to the underwriters and either addressed to such seller or
specifically entitling such seller to rely thereupon, stating that such
registration statement has become effective under the Securities Act and
that (A) to the best knowledge of such counsel, no stop order suspending
the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the
Securities Act, (B) the registration statement, the related prospectus, and
each amendment or supplement thereof, comply as to form in all material
respects with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder (except that such
counsel need express no opinion as to financial statements, the notes
thereto, and the financial schedules and other financial and statistical
data contained therein) and (C) to such other effects as may reasonably be
requested by counsel for the underwriters, and (ii) a letter dated such
date from the independent public accountants retained by the Company,
addressed to the underwriters and to such seller (or, if such accountants
refuse to deliver such a letter to such seller, then to the Company),
stating that they are independent public accountants within the meaning of
the Securities Act and that, in the opinion of such accountants, the
financial statements of the Company included in the registration statement
or the prospectus, or any amendment or supplement thereof, comply as to
form in all material respects with the applicable accounting requirements
of the Securities Act, and such letter shall additionally cover such other
financial matters (including information as to the period ending no more
than five business days prior to the date of such letter) with respect to
the registration in respect of which such letter is being given as such
underwriters may reasonably request; and
(h) subject to applicable confidentiality obligations, make available
for inspection by each seller, any underwriter participating in any
distribution pursuant to such registration statement, and any attorney,
accountant or other agent retained by such
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seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably requested by
any such seller, underwriter, attorney, accountant or agent in connection
with such registration statement.
For purposes of paragraphs (a) and (b) above and of Section 4(c) hereof, the
period of distribution of Restricted Stock or Founders Stock or both, as the
case may be, in a firm commitment underwritten public offering shall be deemed
to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Restricted Stock
or Founders Stock or both, as the case may be, in any other registration shall
be deemed to extend until the earlier of the sale of all Restricted Stock or
Founders Stock or both, as the case may be, covered thereby or six months after
the effective date thereof.
In connection with each registration hereunder, the selling holders of
Restricted Stock or Founders Stock, as the case may be, will furnish to the
Company in writing such information with respect to themselves and the proposed
distribution by them as shall be reasonably necessary in order to assure
compliance with federal and applicable state securities laws. In addition, any
such selling holder of Restricted Stock or Founders Stock, as the case may be,
will deliver to the underwriters and the Company such documentation as is
customary in the securities business for such registrations of securities.
In connection with each registration pursuant to Sections 4, 5 and 6
hereof covering an underwritten public offering, the Company agrees to enter
into a written agreement with the managing underwriter selected in the manner
herein provided, in such form and containing such provisions as are customary in
the securities business for such an arrangement between major underwriters and
companies of the Company's size and investment stature; provided, however, that
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such agreement shall not contain any such provision applicable to the Company
which is inconsistent with the provisions hereof; and provided, further, that
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the time and place of the closing under said agreement shall be as mutually
agreed upon between the Company and such managing underwriter.
8. Expenses. All expenses incurred by the Company in complying
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with Sections 4, 5 or 6 hereof, including without limitation all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees of the National Association
of Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars and costs of insurance, but excluding any Selling Expenses, are
herein called "Registration Expenses". All underwriting discounts and selling
commissions applicable to the sale of Restricted Stock or Founders Stock and all
fees and expenses of counsel representing sellers of Restricted Stock and
Founders Stock (unless such counsel is also counsel to the Company) are herein
called "Selling Expenses".
The Company will pay all Registration Expenses in connection with each
registration statement filed pursuant to Sections 4, 5 and 6 hereof. All
Selling Expenses in
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connection with any registration statement filed pursuant to Section 4, 5 or 6
hereof shall be borne by the participating sellers in proportion to the number
of shares sold by each, or by such persons other than the Company (except to the
extent the Company shall be a seller) as they may agree.
9. Indemnification. (a) In the event of a registration of any of the
---------------
Restricted Stock or Founders Stock or both, as the case may be, under the
Securities Act pursuant to Section 4, 5 or 6 hereof, the Company will indemnify
and hold harmless each seller of such Restricted Stock or Founders Stock, as the
case may be, thereunder and each underwriter of Restricted Stock or Founders
Stock, as the case may be, thereunder and each officer, director and each other
person, if any, who controls such seller or underwriter within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such seller or underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Restricted Stock or
Founders Stock, as the case may be, was registered under the Securities Act
pursuant to Section 4, 5 or 6, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each such seller, each such underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
-------- -------
any such case if and to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished by such seller, such underwriter or such controlling person in writing
specifically for use in such registration statement or prospectus.
(b) In the event of a registration of any of the Restricted Stock or
Founders Stock or both, as the case may be, under the Securities Act pursuant to
Section 4, 5 or 6 hereof, each seller of such Restricted Stock or Founders
Stock, as the case may be, thereunder, severally and not jointly, will indemnify
and hold harmless the Company and each officer, director and each other person,
if any, who controls the Company within the meaning of the Securities Act, each
officer of the Company who signs the registration statement, each director of
the Company, each underwriter and each person who controls any underwriter
within the meaning of the Securities Act, against all losses, claims, damages or
liabilities, joint or several, to which the Company or such officer or director
or underwriter or controlling person may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement under which such Restricted Stock or Founders Stock, as the case may
be, was registered under the Securities Act pursuant to Section 4, 5 or 6, any
preliminary prospectus or final prospectus contained therein, or any amend-
ITXC Third Amended Registration Rights Agreement
-12-
ment or supplement thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company and each such officer, director, underwriter and controlling person
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that such seller will be liable hereunder in any such case if
-------- -------
and only to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in reliance upon and in conformity with information
pertaining to such seller, as such, furnished in writing to the Company by such
seller specifically for use in such registration statement or prospectus; and
provided further, however, that in the event that more than one seller shall
---------------- -------
bear liability hereunder, the liability of each seller hereunder shall be
limited to the proportion of any such loss, claim, damage, liability or expense
which is equal to the proportion that the public offering price of shares sold
by such seller under such registration statement bears to the total public
offering price of all securities sold thereunder; and provided further, however,
---------------- -------
that in no event shall any seller's liability exceed the proceeds (net of
underwriting discounts and commissions) received by such seller from the sale of
Restricted Stock or Founders Stock, as the case may be, covered by such
registration statement.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party other than under this Section 9. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such indemnified
party, and, after notice from the indemnifying party to such indemnified party
of its election so to assume and undertake the defense thereof, the indemnifying
party shall not be liable to such indemnified party under this Section 9 for any
legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; provided, however, that, if the defendants in
-------- -------
any such action include both the indemnified party and the indemnifying party
and the indemnified party shall have reasonably concluded that there may be
reasonable defenses available to it which are different from or additional to
those available to the indemnifying party, or if the interests of the
indemnified party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the right to
retain its own counsel in any such action, but the fees and disbursements of
such counsel shall be at the
ITXC Third Amended Registration Rights Agreement
-13-
expense of such indemnified party unless (i) the indemnifying party shall have
failed to retain counsel for the indemnified person as aforesaid or (ii) the
indemnifying party and such indemnified party shall have mutually agreed to the
retention of such counsel. It is understood that the indemnifying party shall
not, in connection with any action or related actions in the same jurisdiction,
be liable for the fees and disbursements of more than one separate firm
qualified in such jurisdiction to act as counsel for the indemnified party. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.
(d) If the indemnification provided for in paragraphs (a) and (b) of
this Section 9 is unavailable or insufficient to hold harmless an indemnified
party under such paragraphs in respect of any losses, claims, damages or
liabilities or actions in respect thereof referred to therein, then each
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, liabilities or actions in such proportion as
appropriate to reflect the relative fault of the Company, on the one hand, and
the sellers of such Restricted Stock and Founders Stock, on the other, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or actions as well as any other relevant equitable
considerations, including the failure to give any notice under paragraph (c) of
this Section 9. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
relates to information supplied by the Company, on the one hand, or the sellers
of such Restricted Stock and Founders Stock, on the other hand, and to the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the sellers of
Restricted Stock and Founders Stock agree that it would not be just and
equitable if contributions pursuant to this paragraph were determined by pro
---
rata allocation (even if all of the sellers of such Restricted Stock and
----
Founders Stock were treated as one entity for such purpose) or by any other
method of allocation which did not take account of the equitable considerations
referred to above in this paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
action in respect thereof, referred to above in this paragraph, shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this paragraph, the sellers of such Restricted
Stock and Founders Stock shall not be required to contribute any amount in
excess of the amount, if any, by which the total price at which the Common Stock
sold by each of them was offered to the public exceeds the amount of any damages
which they would have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities Act),
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.
ITXC Third Amended Registration Rights Agreement
-14-
The indemnification of underwriters provided for in this Section 9
shall be on such other terms and conditions as are at the time customary and
reasonably required by such underwriters. In that event the indemnification of
the sellers of Restricted Stock or Founders Stock or both, as the case may be,
in such underwriting shall at the sellers' request be modified to conform to
such terms and conditions.
10. Changes in Stock. If, and as often as, there are any changes in
----------------
the Common Stock by way of stock split, stock dividend, combination or
reclassification, or through merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof, as may be required, so that the rights and privileges
granted hereby shall continue with respect to the Common Stock as so changed and
shall apply to any securities received in any such transaction.
11. [Reserved]
--------
12. Rule 144 Reporting. The Company agrees with you as follows:
------------------
(a) The Company shall make and keep public information available, as
those terms are understood and defined in Rule 144 under the Securities Act, at
all times from and after the 90th day after its initial registration statement
is declared effective by the Commission.
(b) The Company shall use its best efforts to file with the Commission
in a timely manner all reports and other documents as the Commission may
prescribe under Section 13(a) or 15(d) of the Exchange Act at any time after the
Company has become subject to such reporting requirements of the Exchange Act.
(c) The Company shall furnish to each holder of Restricted Stock or
Founders Stock forthwith upon request (i) a written statement by the Company as
to its compliance with the reporting requirements of Rule 144 (at any time from
and after the date it first becomes subject to such reporting requirements), and
of the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), (ii) a copy of the most recent annual
or quarterly report of the Company, and (iii) such other reports and documents
so filed with the Commission as a holder may reasonably request to avail itself
of any rule or regulation of the Commission allowing a holder of Restricted
Stock or Founders Stock to sell any such securities without registration.
13. Miscellaneous.
-------------
(a) Each holder of Restricted Stock and Founders Stock will agree, to
the extent reasonably requested by any underwriter of securities of the Company
in connection with an initial public offering of the Company's Common Stock, to
enter into an agreement not to sell or otherwise transfer or dispose of any
shares of Common Stock for such period of time (not to exceed 180 days)
following the effective date of a registration statement of the Company filed
ITXC Third Amended Registration Rights Agreement
-15-
under the Securities Act, which agreement shall also bind the executive officers
and directors of the Company on terms and conditions substantially similar to
those which shall apply to holders of Restricted Stock and Founders Stock.
(b) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto, including, without limitation, the rights
to indemnification under Section 9 hereof, shall bind and inure to the benefit
of the respective successors and assigns of the parties hereto whether so
expressed or not. Without limiting the generality of the foregoing, the
registration rights conferred herein on the holders of Restricted Stock or
Founders Stock, as the case may be, shall inure to the benefit of any and all
subsequent holders from time to time of the Restricted Stock and the Founders
Stock.
(c) All notices, requests, consents and other communications hereunder
shall be in writing and shall be mailed by first class registered mail, postage
prepaid, addressed as follows:
if to the Company, to it at 000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000, attention: Chairman, facsimile number (000) 000-0000, with a copy
to Xxxxx Xxxxxxxxx, Esq., Xxxxxxxxxx Xxxxxxx PC, 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx,
Xxx Xxxxxx 00000, facsimile number (000) 000-0000;
if to any holder of Restricted Stock, to him, her or it, as the case
may be, at its address as set forth on Annex I hereto;
if to any holder of Founders Stock, to him, her or it, as the case may
be, at its address set forth on Annex II hereto;
if to any subsequent holder of Restricted Stock or Founders Stock, to
it at such address as may have been furnished to the Company in writing by such
holder;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Restricted Stock or
Founders Stock), or to the holders of Restricted Stock or Founders Stock (in the
case of the Company).
(d) This Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey.
(e) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and may not be modified or amended
except in writing executed by the Company, the holders of a majority of the
total number of shares of Restricted Stock and the holders of a majority of the
total number of shares of Founders Stock.
(f) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
ITXC Third Amended Registration Rights Agreement
-16-
(g) The Company shall not grant to any third party any registration
rights more favorable than or inconsistent with any of those contained herein,
so long as any of the registration rights under this Agreement remains in
effect.
(h) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
(i) This Agreement shall further amend and restate, and shall replace
in its entirety, the Original Registration Rights Agreement.
[This Page Intentionally Ends Here]
ITXC Third Amended Registration Rights Agreement
-17-
IN WITNESS WHEREOF, the parties hereto have executed this Third
Amended and Restated Registration Rights Agreement as of the date first above
written.
ITXC CORP.
By: /s/Xxx Xxxxxx
________________________________
Name: Xxx Xxxxxx
______________________________
Title: CEO
_____________________________
FOUNDERS:
/s/ Xxx Xxxxxx
___________________________________
Xxx Xxxxxx
/s/ Xxxx Xxxxxx
___________________________________
Xxxx Xxxxxx
/s/ Xxx Xxxxxx and Xxxx Xxxxxx
___________________________________
Xxx Xxxxxx and Xxxx Xxxxxx, JTWROS
/s/ Xxxxxx X. Xxxxxx
___________________________________
Xxxxxx Xxxxxx
XXXXX VENTURE CAPITAL ASSOCIATES,
L.P.
By: Chase Capital Partners,
its General Partner
/s/ J. Xxxxxx Xxxxxx
By: _______________________________
ITXC Third Amended Registration Rights Agreement
-18-
Name: J. Xxxxxx Xxxxxx
_____________________________
Title: G.P.
_____________________________
THE FL@TIRON FUND LLC
By: /s/ Xxxx Xxxxxx
_____________________________
Name: Xxxx Xxxxxx
Title: Managing Member
THE FLATIRON FUND 1998/99, LLC
By: /s/ Xxxx Xxxxxx
_____________________________
Name: Xxxx Xxxxxx
Title: Managing Member
FLATIRON ASSOCIATES, LLC
By: Flatiron Partners, LLC
its Manager
By: /s/ Xxxx Xxxxxx
_____________________________
Name: Xxxx Xxxxxx
Title: Managing Member
ITXC Third Amended Registration Rights Agreement
-19-
SPECTRUM EQUITY INVESTORS II, L.P.
By: Spectrum Equity Associates II,
L.P., its General Partner
/s/ Xxxxxxx X. Xxxxxxxx
By: _______________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: General Partner
SEA 1998 II, L.P.
/s/ Xxxxx Xxxxxxxxx
By: _______________________________
Name: Xxxxx Xxxxxxxxx
______________________________
Title: Vice President
______________________________
VOCALTEC COMMUNICATIONS, INC.
/s/ Xxxx Xxxxx
By: _______________________________
Name: Xxxx Xxxxx
______________________________
Title: Chairman of the Board
______________________________
INTEL CORPORATION
/s/ Xxxxxx Xxxxxxx
By: _______________________________
Name: Xxxxxx Xxxxxxx
______________________________
Title: Vice President and Treasurer
______________________________
POLARIS FUND II, LLC (Tax Exempt
Investors)
/s/ Chemi Xxxxx
By: _______________________________
Name: Chemi Xxxxx
______________________________
Title:
______________________________
ITXC Third Amended Registration Rights Agreement
-20-
POLARIS FUND II, LLC
/s/ Chemi Xxxxx
By: _____________________________
Name: Chemi Xxxxx
____________________________
Title:
____________________________
POLARIS FUND, L.P.
/s/ Chemi Xxxxx
By: _____________________________
Name: Chemi Xxxxx
____________________________
Title:
____________________________
DS POLARIS TRUST COMPANY
(Foreign residents)(1997), LTD.
/s/ Chemi Xxxxx
By: _____________________________
Name: Chemi Xxxxx
____________________________
Title:
____________________________
DS POLARIS, LTD.
/s/ Chemi Xxxxx
By: _____________________________
Name: Chemi Xxxxx
____________________________
Title:
____________________________
CANADA-ISRAEL OPPORTUNITY FUND, LP
/s/ Chemi Xxxxx
ITXC Third Amended Registration Rights Agreement
-21-
By: _____________________________
Name: Chemi Xxxxx
____________________________
Title:
____________________________
ITXC Third Amended Registration Rights Agreement
-22-
Annex 1
-------
Addresses for Notice of Holders of Restricted Stock
---------------------------------------------------
Notice to Evslin or Jordan shall be addressed to either such person c/o
ITXC Corp., 000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, to such
individual's attention, with a copy to Xxxxx Xxxxxxxxx, Esq., Xxxxxxxxxx Xxxxxxx
PC, 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000.
Notices to other holders of Restricted Stock shall be addressed as follows:
VocalTec Communications, Inc.
00 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxx,
Chief Executive Officer
and Chairman
----------------------------------
Chase Venture Capital Associates,
L.P.
000 Xxxxxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, XX 00000
Attn: Mr. I. Xxxxxx Xxxxxx
----------------------------------
The Fl@tiron Fund LLC
The Flatiron Fund 1998/99, LLC
Flatiron Associates, LLC
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Mr. Xxxx Xxxxxx
----------------------------------
Intel Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxxxx
Mail Stop RN6 6-37
Xxxxx Xxxxx, XX 00000
Attn: Treasurer
----------------------------------
ITXC Third Amended Registration Rights Agreement
-23-
----------------------------------
Spectrum Equity Xxxxxxxxx XX, X.X.
XXX 0000 XX, X.X.
Xxx Xxxxxxxxxxxxx Xxxxx, 00xx
Xxxxx
Xxxxxx, XX 00000
----------------------------------
Polaris Fund II, LLC (Tax Exempt
Investors)
Polaris Fund II, LLC
Polaris Fund, L.P.
DS Polaris Trust Company (foreign
residents)(1997), Ltd.
Canada-Israel Opportunity Fund, LP
DS Polaris, Ltd.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxx 00000
Xxxxxx
----------------------------------
ITXC Third Amended Registration Rights Agreement
-24-
Annex 2
-------
Addresses for Notice of Holders of Founders Stock
-------------------------------------------------
Notice to Evslin or Jordan shall be addressed to either such person c/o
ITXC Corp., 000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx, to such individual's
attention, with a copy to Xxxxx Xxxxxxxxx, Esq., Xxxxxxxxxx Xxxxxxx PC, 00
Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000.
ITXC Third Amended Registration Rights Agreement
-25-
