EXHIBIT 10.12
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
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into as of the 30th day of October, 1999 by and among XxxxxXxxxx.xxx Inc., a
Delaware corporation (the "Company") and Guidance Solutions, Inc. (the
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"Developer").
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Recitals
WHEREAS, the Company, The Right Start, Inc., a California corporation
("Parent") and Developer are parties to the Stock Grant Agreement dated as of
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even date herewith (the "Grant Agreement"); and
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WHEREAS, certain of Parent's and the Developer's obligations under the
Grant Agreement are conditioned upon the execution and delivery by the Company
of this Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereto further agree as follows:
1. CERTAIN EFINITIONS. As used in this Agreement, the following terms shall
have the meanings set forth below:
1.1 "Affiliate" of any party means any person (or group of persons) who
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effectively controls, is effectively controlled by or is under common control
with such party.
1.2 "Closing" shall mean the date of the sale of shares by Parent to Developer
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of the Company's Common Stock.
1.3 "Commission" shall mean the Securities and Exchange Commission or any other
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federal agency at the time administering the Securities Act.
1.4 "Common Stock" shall mean the common stock of the Company, $.01 par value
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per share.
1.5 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
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or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
1.6 "Holder" shall mean Developer so long as it holds any Common Stock and any
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holder of Common Stock who acquired such Securities from Developer in accordance
with this Agreement.
1.7 "Other Stockholders" shall mean persons other than Holders who, by
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virtue of agreements with the Company, are entitled to include their securities
in certain registrations hereunder.
1.8 "Registrable Securities" shall mean any Securities held by a Holder granted
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or receiving registration rights under Section 3 of this Agreement; provided,
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however, that Registrable Securities shall not include any shares of Common
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Stock which have previously been registered or which have been sold to the
public either pursuant to a registration statement or Rule 144, or which have
been sold in a private transaction in which the transferor's rights under this
Agreement are not assigned.
1.9 The terms "register," "registered" and "registration" shall refer to a
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registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
1.10 "Registration Expenses" shall mean all expenses incurred in effecting
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any registration pursuant to this Agreement, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses,
and expenses of any regular or special audits incident to or required by any
such registration, but shall not include Selling Expenses.
1.11 "Rule 144" shall mean Rule 144 as promulgated by the Commission under the
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Securities Act, as such Rule may be amended from time to time, or any similar
successor rule that may be promulgated by the Commission.
1.12 "Rule 415" shall mean Rule 415 as promulgated by the Commission under
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the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.
1.13 "Securities" shall mean shares of the Company's Common Stock granted under
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the Grant Agreement and any shares issued upon or in exchange for such
securities.
1.14 "Securities Act" shall mean the Securities Act of 1933, as amended, or any
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similar successor federal statute and the rules and regulations thereunder, all
as the same shall be in effect from time to time.
1.15 "Selling Expenses" shall mean all underwriting discounts, selling
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commissions and stock transfer taxes applicable to the sale of Registrable
Securities and fees and disbursements of special counsel to the selling
stockholder.
2. RESTRICTIONS ON TRANSFER.
2.1 Legend.
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(a) Each certificate representing Securities now or hereafter owned by
Developer shall be endorsed with the following legend:
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND
CONDITIONS OF A CERTAIN REGISTRATION RIGHTS AGREEMENT BY AND
BETWEEN THE COMPANY
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AND CERTAIN HOLDERS OF STOCK OF THE COMPANY. COPIES OF SUCH
AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY
OF THE COMPANY."
(b) Developer agrees that the Company may instruct its transfer agent to
impose transfer restrictions on the shares represented by certificates bearing
the legend referred to in this Section 2.1 to enforce the provisions of this
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Agreement and the Company agrees promptly to do so. The legend shall be removed
upon termination of this Agreement.
(c) Each certificate representing Securities shall (unless otherwise permitted
by the provisions of this Agreement) be imprinted with a legend substantially
similar to the following (in addition to any legend required under applicable
state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER SUCH ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE COMPANY
AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
(d) The Company shall be obligated to reissue promptly unlegended certificates
at the request of any Holder thereof if the Holder shall have obtained an
opinion of counsel at such Holder's expense (which counsel may be counsel to the
Company) reasonably acceptable to the Company to the effect that the securities
proposed to be disposed of may lawfully be so disposed of without registration,
qualification or legend.
2.2 General Restrictions on Transfer. Each Holder agrees not to make any
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disposition of all or any portion of the Securities unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 2.2, and provided that:
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(a) There is then in effect a registration statement under the Securities Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement; or
(b) (i) In addition to complying with Section 3.7 hereof, such Holder shall
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have notified the Company of the proposed disposition and shall have furnished
the Company with a detailed statement of the circumstances surrounding the
proposed disposition, and (ii) if reasonably requested by the Company, such
Holder shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require registration
of such shares under the Securities Act.
(c) Notwithstanding the provisions of paragraphs (a) and (b) above, no such
registration statement or opinion of counsel shall be necessary for a transfer
by a Holder (i) which is a partnership to its partners or retired partners in
accordance with partnership interests or to a partnership under common control
with such Holder, (ii) which is a corporation to its shareholders in accordance
with their interest in the corporation, (iii) which is a limited liability
company to its members or former members in accordance with their interest in
the limited liability company, (iv) to such Holder's family member or trust for
the benefit of an individual Holder, or (v) to such Holder's Affiliates,
provided the aforementioned transferees will be
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subject to the terms of this Section 2.2 to the same extent as if such
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transferee were an original Holder hereunder.
3. REGISTRATION RIGHTS.
3.1 Demand Registration.
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(a) If the Company shall receive at any time after the Company's initial
underwritten public offering of its Common Stock (so long as such request is not
within 180 days after the effective date of a registration statement filed by
the Company covering an underwritten offering of any of its securities to the
general public) a written request from Developer that the Company file a
registration statement registering Registrable Securities constituting at least
twenty-five percent (25%) of the Registrable Securities held by the Developer on
the date hereof, then the Company will:
(i) promptly give written notice of the proposed registration to all other
Holders holding Registrable Securities; and
(ii) as soon as practicable, use its best efforts to effect such registration,
on Form S-3 or successor form replacing Form S-3, if practicable, (including,
without limitation, filing post-effective amendments, appropriate qualifications
under applicable blue sky or other state securities laws, and appropriate
compliance with the Securities Act) as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request (as permitted
hereunder) as are specified in a written request received by the Company within
ten (10) business days after such written notice from the Company is mailed or
delivered.
Notwithstanding the foregoing provisions, the Company shall not be
obligated to effect, or to take any action to effect, any such registration
pursuant to this Section 3 if:
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(A) in any particular jurisdiction, the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification, or compliance (unless the Company is already subject to service
in such jurisdiction and except as may be required by the Securities Act);
(B) the Company has initiated one registration pursuant to Section 3.1(a)
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(counting for these purposes only (1) a registration which has been declared or
ordered effective and pursuant to which securities have been sold and (2) a
registration which has been withdrawn by the initiating Holders as to which the
Holders have not paid the Registration Expenses pursuant to Section 3.3 hereof
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and were required to bear such expenses);
(C) such request for registration is made during the period starting with the
date sixty (60) days prior to the Company's good faith estimate of the date of
filing of, and ending on a date one hundred eighty (180) days after the
effective date of, a Company-initiated registration; provided that the Company
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is actively employing in good faith all reasonable efforts to cause such
registration statement to become effective;
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(b) Subject to the foregoing clauses (A) through (C), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practicable after receipt of the request of Developer (or
its transferees), as the case may be; provided, however, that if (i) in the good
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faith judgment of the Board of Directors of the Company (the "Board of
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Directors"), such registration would be seriously detrimental to the Company and
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the Board of Directors concludes, as a result, that it is essential to defer the
filing of such registration statement at such time, and (ii) the Company shall
furnish to such Holders a certificate signed by the President of the Company
stating that in the good faith judgment of the Board of Directors, it would be
seriously detrimental to the Company for such registration statement to be filed
in the near future and that it is, therefore, essential to defer the filing of
such registration statement, then the Company shall have the right to defer such
filing (except as provided in clause (C) above) for a period of not more than
one hundred twenty (120) days after receipt of the request of the Developer (or
its permitted Affiliate transferees), as the case may be, and, provided further,
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that the Company shall not defer its obligation in this manner more than once in
any twelve-month period.
The registration statement filed pursuant to the request of the Developer
(or its transferees) may, subject to the provisions of Sections 3.1(d) and 3.9
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hereof, include other securities of the Company, with respect to which
registration rights have been granted, and may include securities of the Company
being sold for the account of the Company.
(c) Underwriting. The right of any Holder to registration pursuant to Section
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3.1 shall be conditioned upon such Holder's participation in such underwriting,
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the inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein and such other restrictions as may be reasonably imposed
by the underwriter.
(d) Procedures. The Company shall (together with all Holders and other persons
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for such underwriting by a majority in
interest of the initiating Holder(s), which underwriters are reasonably
acceptable to the Company. If the Company shall request inclusion in any
registration pursuant to Section 3.1 of securities being sold for its own
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account, or if other persons shall request inclusion in any registration
pursuant to Section 3.1, the initiating Holder(s) shall, on behalf of all
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Holders, offer to include such securities in the underwriting and may condition
such offer on their acceptance of the further applicable provisions of this
Section 3 (including Section 3.9). Notwithstanding any other provision of this
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Section 3.1, if the representative of the underwriters advises the initiating
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Holder(s) in writing that marketing factors require a limitation on the number
of shares to be underwritten, the number of shares to be included in the
underwriting or registration shall be allocated as set forth in Section 3.9
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hereof; provided that the Holder(s) exercising its demand registration rights
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under this Section 3.1 shall first be entitled to register all of its securities
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subject to such request before any other person or entity shall be entitled to
include securities in such offering. If a person who has requested inclusion in
such registration as provided above does not agree to the terms of any such
underwriting, such person shall be excluded therefrom by written notice from the
Company, the underwriter or the initiating Holder(s). The securities so excluded
shall also be withdrawn from registration. Any Registrable Securities or other
securities excluded or withdrawn from such underwriting shall also be withdrawn
from such registration. If shares are so withdrawn
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from the registration and if the number of shares to be included in such
registration was previously reduced as a result of marketing factors pursuant to
this Section 3.1(d), then the Company shall offer to all Holders who have
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retained rights to include securities in the registration the right to include
additional securities in the registration in an aggregate amount equal to the
number of shares so withdrawn, with such shares to be allocated among such
Holders requesting additional inclusion in accordance with Section 3.9.
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3.2 Piggyback Registration.
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(a) If the Company shall determine to register any of its securities either for
its own account or the account of a security holder or holders exercising their
respective demand registration rights (other than a registration relating solely
to employee benefit plans, or a registration relating to a corporate
reorganization or other transaction on Form S-4, or a registration on any
registration form that does not permit secondary sales), the Company will:
(i) promptly give to each Holder written notice thereof; and
(ii) use its best efforts to include in such registration (and any related
qualification under blue sky laws or other compliance), except as set forth in
Section 3.2(b) below, and in any underwriting involved therein, all the
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Registrable Securities specified in a written request or requests, made by any
Holder and received by the Company within ten (10) business days after the
written notice from the Company described in clause (i) above is mailed or
delivered by the Company. Such written request may specify all or a part of a
Holder's Registrable Securities.
(b) Underwriting. If the registration of which the Company gives notice is for
a registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
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3.2(a)(i). In such event, the right of any Holder to registration pursuant to
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this Section 3.2 shall be conditioned upon such Holder's participation in such
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underwriting, the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein and such other restrictions as may be
reasonably imposed by the underwriter and the Company. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and the other holders of securities of the Company with registration
rights to participate therein distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected by the Company.
Notwithstanding any other provision of this Section 3.2, if the
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representative of the underwriters advises the Company in writing that marketing
factors require a limitation on the number of shares to be underwritten or the
Company's Board of Directors reasonably determines that the number of shares
proposed to be registered must be reduced in view of then existing market
conditions, the Company shall be required to include in the offering only that
number of Registrable Securities and Other Shares (as defined in Section 3.9
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below) that the Board of Directors determine in its sole discretion will not
jeopardize the success of the offering (the securities so included to be
apportioned pro rata among the selling Holders and Other Stockholders requesting
to participate in such registration in accordance with Section 3.9 hereof, or in
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such other proportions as shall mutually be agreed to be such selling Holders).
If any person does not agree to the terms of any such underwriting, he or she
shall be excluded
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therefrom by written notice from the Company or the underwriter. Any Registrable
Securities or other securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration.
If shares are so withdrawn from the registration and if the number of
shares of Registrable Securities to be included in such registration was
previously reduced as a result of marketing factors, the Company shall then
offer to all persons who have retained the right to include securities in the
registration the right to include additional securities in the registration in
an aggregate amount equal to the number of shares so withdrawn, with such shares
to be allocated among the persons requesting additional inclusion in accordance
with Section 3.9 hereof.
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3.3 Expenses of Registration. All Registration Expenses incurred in connection
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with any registration, qualification or compliance pursuant to Sections 3.1 or
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3.2 hereof shall be borne by the Company; provided, however, that if the Holders
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bear the Registration Expenses for any registration proceeding begun pursuant to
Section 3.1 and subsequently withdrawn by the Holders registering shares
therein, such registration proceeding shall not be counted as a requested
registration pursuant to Section 3.1 hereof. Furthermore, in the event that a
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withdrawal by the Holders is based upon material adverse information relating to
the Company that is different from the information known or available (upon
request from the Company or otherwise) to the Holders requesting registration at
the time of their request for registration under Section 3.1, such registration
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shall not be treated as a counted registration for purposes of Section 3.1
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hereof, even though the Holders do not bear the Registration Expenses for such
registration. All Selling Expenses relating to securities so registered shall be
borne by the holders of such securities pro rata on the basis of the number of
shares of securities so registered on their behalf, as shall any other expenses
in connection with the registration required to be borne by the Holders of such
securities.
3.4 Registration Procedures. In the case of each registration effected by the
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Company pursuant to this Section 3, the Company will keep each Holder advised in
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writing as to the initiation of each registration and as to the completion
thereof. At its expense, the Company will use its best efforts to:
(a) Keep such registration effective for a period of ninety (90) days or until
the Holder or Holders have completed the distribution described in the
registration statement relating thereto, whichever first occurs; provided,
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however, that (i) such 90-day period shall be extended for a period of time
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equal to the period the Holder refrains from selling any securities included in
such registration at the request of an underwriter of Common Stock (or other
securities) of the Company; and (ii) in the case of any registration of
Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such 90-day period shall be extended, if necessary,
to keep the registration statement effective until all such Registrable
Securities are sold, however in no event longer than two (2) years from the
effective date of the registration statement and provided that Rule 415, or any
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successor rule under the Securities Act, permits an offering on a continuous or
delayed basis for such period; and provided further that applicable rules under
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the Securities Act governing the obligation to file a post-effective amendment
permit, in lieu of filing a post-effective amendment that (A) includes any
prospectus required by Section 10(a)(3) of the Securities Act or (B) reflects
facts or events representing a material or
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fundamental change in the information set forth in the registration statement,
the incorporation by reference of information required to be included in (A) and
(B) above to be contained in periodic reports filed pursuant to Section 13 or
15(d) of the Exchange Act in the registration statement;
(b) Prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement;
(c) Furnish such number of prospectuses and other documents incident thereto,
including any amendment of or supplement to the prospectus, as a Holder from
time to time may reasonably request;
(d) Cause all such Registrable Securities registered pursuant hereunder to be
listed on each securities exchange on which similar securities issued by the
Company are then listed, if any;
(e) Provide a transfer agent and registrar for all Registrable Securities
registered pursuant to such registration statement and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration;
(f) In connection with any underwritten offering pursuant to a registration
statement filed pursuant to Section 3.1 hereof, the Company will enter into an
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underwriting agreement in form reasonably necessary to effect the offer and sale
of Common Stock.
3.5 Indemnification.
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(a) The Company will indemnify each Holder, each of its officers, directors and
partners, legal counsel, and accountants and each person controlling such Holder
within the meaning of Section 15 of the Securities Act, with respect to which
registration, qualification, or compliance has been effected pursuant to this
Section 3, against all expenses, claims, losses, damages, and liabilities (or
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actions, proceedings, or settlements in respect thereof) arising out of or based
on any untrue statement of a material fact contained in any prospectus, offering
circular, or other document (including any related registration statement,
notification, or the like) incident to any such registration, qualification, or
compliance, or based on any omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or any violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification, or
compliance, and will reimburse each such Holder, each of its officers,
directors, partners, legal counsel, and accountants and each person controlling
such Holder, each such underwriter, and each person who controls any such
underwriter, as incurred, for any legal and any other expenses reasonably
incurred in connection with investigating and defending or settling 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, liability, or expense arises out of or is based on any untrue statement
or omission based upon written information furnished to the Company by such
Holder or
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underwriter. It is agreed that the indemnity agreement contained in this Section
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3.5(a) shall not apply to amounts paid in settlement of any such loss, claim,
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damage, liability, or action if such settlement is effected without the consent
of the Company.
(b) Each Holder will, if Registrable Securities held by such Holder are included
in the securities as to which such registration, qualification, or compliance is
being effected, indemnify the Company, each of its directors, officers,
partners, legal counsel, and accountants, each person who controls the Company
within the meaning of Section 15 of the Securities Act, and each Other
Stockholder, and each of their officers, directors, and partners, and each
person controlling such Other Stockholder, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement of a material fact contained in any such registration
statement, prospectus, offering circular, or other document, or any 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 such
Other Stockholders, directors, officers, partners, legal counsel, and
accountants, persons, underwriters, or control persons, as incurred, for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability, or action, in each case to
the extent, but only to the extent, that such untrue statement or omission is
made in such registration statement, prospectus, offering circular, or other
document in reliance upon and in conformity with written information furnished
to the Company by such Holder; provided, however, that the obligations of such
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Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld); and provided further that in no event shall any
indemnity under this Section 3.5(b) exceed the net proceeds from the offering
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received by such Holder.
(c) Each party entitled to indemnification under this Section 3.5 (the
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"Indemnified Party") shall give notice to the party required to provide
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indemnification (the "Indemnifying Party") promptly after such Indemnified Party
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has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
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Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
be unreasonably withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
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Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 3, to the extent such
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failure is not prejudicial. 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 that 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. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 3.5 is held by a court
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of competent jurisdiction to be unavailable to an Indemnified Party with respect
to any loss, liability, claim, damage, or expense referred to therein, then the
Indemnifying Party, in lieu of indemnifying such
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Indemnified Party hereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the other
in connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in an underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control and the foregoing Section 3.5 shall have no further force and effect.
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3.6 Information by Holder. Each Holder of Registrable Securities shall furnish
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to the Company such information regarding such Holder and the distribution
proposed by such Holder as the Company may reasonably request in writing and as
shall be reasonably required in connection with any registration, qualification,
or compliance referred to in this Section 3.
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3.7 Transfer or Assignment of Registration Rights. The rights to cause the
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Company to register a Holder's Registrable Securities (as presently constituted
and subject to subsequent adjustments for stock splits, stock dividends, reverse
stock splits, and the like) granted under Section 3.1 and under Section 3.2 may
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be transferred or assigned to a transferee or assignee (in accordance with
Section 2 hereof) (a) who acquires at least twenty-five percent (25%) of such
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Holder's Securities, which assignee or transferee is acceptable to the Company
(which acceptance shall not be unreasonably withheld) or (b) to an Affiliate of
Holder regardless of the number of Securities transferred to such Affiliate;
provided that the Company is given written notice at the time of or within a
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reasonable time after said transfer or assignment, stating the name and address
of the proposed transferee or assignee and identifying the securities with
respect to which such registration rights are being transferred or assigned; and
provided further, that the transferee or assignee of such rights assumes in
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writing the obligations of such Holder under this Section 3.
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3.8 "Lock-Up" Agreement. If requested by the Company or any representative of
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an underwriter of Common Stock (or other securities) of the Company following an
initial public offering, each of the holders of the Securities shall not sell or
otherwise transfer or dispose of any Common Stock or other securities of the
Company held by such holders (other than those included in the registration)
during the one hundred eighty (180) day period following the effective date of a
registration statement of the Company filed under the Securities Act. If
requested by the Company or any representative of an underwriter of Common Stock
(or other securities) of the Company following the first public offering of the
Company after the Company's initial public offering, each of the holders of the
Securities shall not sell or otherwise transfer or dispose of any Common Stock
or other securities of the Company held by such holders (other than those
included in the registration) during the ninety (90) day period following the
effective date of a registration statement of the Company filed under the
Securities Act. The obligations described in this Section 3.8 shall not apply to
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a registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a transaction on Form S-4 or similar forms that may be
promulgated in the future. The Company may impose stop-transfer instructions
with respect to the shares of Common Stock (or other securities) subject to the
foregoing restriction until the end of such lock-up periods.
3.9 Allocation of Registration Opportunities. In any circumstance in which all
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of the securities of the Company with registration rights (the "Other Shares")
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requested to be included in a registration on behalf of the Holders or Other
Stockholders cannot be so included as a result of limitations of the aggregate
number of shares of Registrable Securities and Other Shares that may be so
included, the number of shares of Registrable Securities and Other Shares that
may be so included shall be allocated among the Holders and Other Stockholders
requesting inclusion of shares pro rata on the basis of the number of shares of
Registrable Securities and Other Shares such parties requested to have
registered in such offering; provided, however, that such allocation shall not
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operate to reduce the aggregate number of Registrable Securities and Other
Shares to be included in such registration if any Holder or Other Stockholder
does not request inclusion of the maximum number of shares of Registrable
Securities and Other Shares allocated to him pursuant to the above-described
procedure, in which case the remaining portion of his allocation shall be
reallocated among those requesting Holders and other selling stockholders whose
allocations did not satisfy their requests pro rata on the basis of the number
of shares of Registrable Securities and Other Shares for which registration had
been requested, and this procedure shall be repeated until all of the shares of
Registrable Securities and Other Shares which may be included in the
registration on behalf of the Holders and Other Stockholders have been so
allocated.
3.10 Delay of Registration. No Holder shall have any right to take any action to
---------------------
restrain, enjoin, or otherwise delay any registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 3.
---------
11
3.11 Termination of Registration Rights. The right of any Holder to request
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registration or inclusion in any registration pursuant to Section 3.1 or 3.2
----------- ---
shall terminate on the closing of the first Company-initiated registered public
offering of Common Stock of the Company if all shares of Registrable Securities
held may immediately be sold under Rule 144 during any 90-day period, or the
earlier of (i) such date after the closing of the first Company-initiated
registered public offering of its Common Stock as all shares of Registrable
Securities held may immediately be sold under Rule 144 during any 90-day period,
and (ii) five (5) years after the closing of the first Company-initiated
registered public offering.
4. MISCELLANEOUS.
4.1 Governing Law. This Agreement shall be governed in all respects by the laws
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of the State of Delaware (except choice of law provisions thereof).
4.2 Arbitration. The parties hereto agree that any dispute or controversy
-----------
arising out of or relating to any interpretation, construction, performance or
breach of this Agreement (other than disputes involving confidentiality or
infringement of intellectual property rights) shall be settled by arbitration to
be held in Los Angeles County, California, in accordance with the rules then in
effect of the American Arbitration Association. The arbitrator, who shall be
mutually agreed upon by the parties hereto, may grant injunctions or other
relief in such dispute or controversy. The decision of the arbitrator shall be
final, conclusive and binding on the parties to the arbitration. Judgement may
be entered on the arbitrator's decision in any court of competent jurisdiction.
The non-prevailing party shall pay the costs and expenses of such arbitration,
and each party hereto shall separately pay its respective counsel fees and
expenses.
4.3 Successors and Assigns. Except as otherwise expressly provided herein, this
----------------------
Agreement shall not be assignable by the parties hereto. To the extent
assignable as otherwise provided herein, the provisions hereof shall inure to
the benefit of, and be binding upon, the successors, assigns, heirs, executors
and administrators of the parties hereto.
4.4 Entire Agreement; Amendment; Waiver. Except as set forth in Section 2.1(f),
----------------------------------- --------------
this Agreement (including the Exhibits and Schedules hereto) constitutes the
full and entire understanding and agreement between the parties with regard to
the subjects hereof. Neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated, except by a written instrument signed by the
Company and a majority of the Holders of the Securities, and any such amendment,
waiver, discharge or termination shall be binding on all the Holders, but in no
event shall the obligation of any Holder hereunder be materially increased,
except upon the written consent of such Holder.
4.5 Notices, etc. All notices and other communications required or permitted
------------
hereunder shall be in writing and shall be mailed by United States first-class
mail, postage prepaid, sent by facsimile or delivered personally by hand or
nationally recognized courier addressed (a) if to Developer, to the address set
forth below, (b) if to a Holder other than Developer [(or a member thereof)], at
such address or facsimile number as such holder or permitted assignee shall have
furnished to the Company in writing, or (c) if to the Company, at the following
address:
12
If to Developer:
Guidance Solutions, Inc.
0000 Xxx Xxx Xxxxxx
Xxxxxx Xxx Xxx, XX 00000
Attention: Xxxx Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxxxx, Esq.
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Facsimile: 213-229-6979
If to the Company:
XxxxxXxxxx.xxx Inc.
0000 Xxxxxxxx Xxxxxx Xxxxx - Xxxx X
Xxxxxxxx Xxxxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Milbank, Tweed, Xxxxxx & XxXxxx LLP
601 So. Xxxxxxxx Street, 30th Floor
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
All such notices and other written communications shall be effective on the
date of mailing, confirmed facsimile transfer or delivery.
13
4.6 Delays or Omissions. No delay or omission to exercise any right, power or
-------------------
remedy accruing to any Holder, upon any breach or default of the Company under
this Agreement shall impair any such right, power or remedy of such Holder nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default therefore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
Holder of any breach or default under this Agreement or any waiver on the part
of any Holder of any provisions or conditions of this Agreement must be made in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to any Holder, shall be cumulative and not alternative.
4.7 Rights; Separability. Unless otherwise expressly provided herein, a
--------------------
Holder's rights hereunder are several rights, not rights jointly held with any
of the other Holders.
4.8 Information Confidential. Each Holder acknowledges that the information
------------------------
received by them pursuant hereto may be confidential and for its use only, and
it will not use such confidential information in violation of the Exchange Act
or reproduce, disclose or disseminate such information to any other person
(other than its employees or agents having a need to know the contents of such
information, and its attorneys), except in connection with the exercise of
rights under this Agreement, unless the Company has made such information
available to the public generally or such Holder is required to disclose such
information by a governmental body.
4.9 Headings. The titles of the paragraphs and subparagraphs of this Agreement
--------
are for convenience of reference only and are not to be considered in construing
or interpreting this Agreement.
4.10 Counterparts. This Agreement may be executed in any number of counterparts,
------------
each of which shall be an original, but all of which together shall constitute
one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement effective as of the day and year first above written.
XXXXXXXXXX.XXX INC.
By: /s/ Xxxxx X. Xxxxx
---------------------------------------------
Xxxxx X. Xxxxx
President
GUIDANCE SOLUTIONS, INC.
By: /s/ Xxxx Xxxxxxxx
---------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Financial Officer
