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Exhibit 10.32
HOUSTON STREET EXCHANGE, INC.
AMENDMENT NO. 1
TO
INVESTOR RIGHTS AGREEMENT
This Amendment No. 1 (this "Amendment") to that certain Investor Rights
Agreement (the "Agreement") dated as of February 2, 2000 by and among Houston
Street Exchange, Inc., a Delaware corporation (the "Company"), BayCorp Holdings,
Ltd., a Delaware corporation ("BayCorp"), Equiva Trading Company, a Delaware
general partnership ("Equiva"), and the Purchasers (as defined therein) is
entered into as of March 6, 2000, among Houston Street, BayCorp, Equiva and
those Purchasers party hereto (the "Amending Purchasers"). Capitalized terms
used and not otherwise defined herein shall have the respective meanings
ascribed to them in the Agreement.
PRELIMINARY STATEMENT
A. Houston Street, BayCorp, Equiva and the Purchasers entered into the
Agreement as of February 2, 2000.
X. Xxxxxxx Street, BayCorp, Equiva and the Amending Purchasers desire to
amend the Agreement to waive their respective rights of first refusal in
connection with the issuance of 266,667 shares of Common Stock by Houston
Street.
C. Section 5(f) of the Agreement provides that the Agreement may be
amended with the written consent of the holders of 75% of the voting power of
the Senior Registrable Shares then outstanding (giving effect to the conversion
into Common Stock of all securities convertible thereinto).
X. Xxxxxxx Street, BayCorp, Equiva and the Amending Purchasers are the
holders of at least 75% of the voting power of the Senior Registrable Shares
outstanding (giving effect to the conversion into Common Stock of all securities
convertible thereinto).
NOW THEREFORE, Houston Street, BayCorp, Equiva and the Amending Purchasers
hereby agree and consent as follows:
1. The text appearing in Section 3.1(e) of the Agreement is hereby (i)
deleted in its entirety, and as of the effective date hereof, shall be of no
effect, retrospectively or prospectively, and (ii) replaced by the text set
forth below:
(e) The rights of a Stockholder under this Section 3 shall not apply to:
(1) Common Stock issued as a stock dividend to holders of Common
Stock or upon any subdivision or combination of shares of Common Stock;
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(2) the issuance of any shares of Common Stock upon conversion
of shares of convertible preferred stock;
(3) the issuance of up to 4,000,000 shares of Common Stock or
the grant of options therefor, including shares issued upon exercise of options
outstanding on the date of this Agreement to officers, directors, consultants,
advisors and employees of the Company or any subsidiary pursuant to any plan,
agreement or arrangement approved by a vote of not less than a majority of the
Board of Directors of the Company (such number of shares to be adjusted in the
event of stock splits, stock dividends, reclassifications, recapitalizations or
similar events);
(4) securities issued solely in consideration for the
acquisition (whether by merger or otherwise) by the Company or any of its
subsidiaries of all or substantially all of the stock or assets of any other
entity;
(5) shares of Common Stock sold by the Company in an
underwritten public offering pursuant to an effective registration statement
under the Securities Act;
(6) shares of the Company's capital stock sold at a "Subsequent
Closing" (as that term is defined in Section 2(b) of the Series A Preferred
Stock Purchase Agreement); or
(7) the sale by the Company of up to 266,667 shares of the
Company's Common Stock before May 31, 2000.
2. Except to the extent amended by this Amendment, the Agreement is, in
all respects, hereby ratified and confirmed and shall continue in full force and
effect.
3. This Amendment shall be governed by and construed in accordance with
the internal laws of the State of Delaware (without reference to the conflicts
of law provisions thereof).
4. This Amendment may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
[Remainder of page intentionally left blank]
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EXECUTED as of the date first written above.
HOUSTON STREET EXCHANGE, INC.
By: /s/ Xxxxx X. Xxxxxx Xx.
-----------------------
Xxxxx X. Xxxxxx Xx.
President and Chief Executive
Officer
BAYCORP HOLDINGS, LTD.
By: /s/ Xxxxx X. Xxxxxx Xx.
-----------------------
Xxxxx X. Xxxxxx Xx.
President and Chief Executive
Officer
EQUIVA TRADING COMPANY
By: /s/ Xxxxxx Xxxxxxxxx
--------------------
Name: Xxxxxx Xxxxxxxxx
Title: President, Equiva Trading
Company
XXXXXXX ASSOCIATES, L.P.
By: /s/ Xxxx Xxxxxx
---------------
OMEGA ADVISORS, INC.
By: /s/ Xxxxxxxx Xxxxxxx
--------------------
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HOUSTON STREET EXCHANGE, INC.
INVESTOR RIGHTS AGREEMENT
This Agreement dated as of February 2, 2000 is entered into by and among
Houston Street Exchange, Inc., a Delaware corporation (the "Company"), BayCorp
Holdings, Ltd., a Delaware corporation ("BayCorp"), Equiva Trading Company, a
Delaware general partnership ("Equiva"), and the entities listed on EXHIBIT A
attached hereto (the "Purchasers").
RECITALS
1. The Purchasers are purchasing, concurrently herewith, certain shares
of Series A Convertible Preferred Stock of the Company pursuant to the Series A
Convertible Preferred Stock Purchase Agreement of even date herewith (the
"Series A Preferred Stock Purchase Agreement").
2. Immediately prior to the first closing under the Series A Preferred
Stock Purchase Agreement, Equiva purchased 4,814,815 shares of Common Stock of
the Company pursuant to the Common Stock Purchase Agreement of even date
herewith (the "Common Stock Purchase Agreement"). Equiva is also a Purchaser
hereunder and under the Series A Preferred Stock Purchase Agreement.
3. BayCorp owns of record 10,000,000 shares of the Common Stock of the
Company.
4. The Company and the Stockholders (as defined in Section 1 below)
desire to provide for certain arrangements with respect to (i) the registration
of shares of capital stock of the Company under the Securities Act of 1933, (ii)
rights of first refusal with respect to certain issuances of securities of the
Company and (iii) certain covenants of the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the following
respective meanings:
"COMMISSION" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"COMMON STOCK" means the common stock, $.01 par value per share, of
the Company.
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"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any successor federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"INITIATING HOLDERS" means the Stockholders initiating a request for
registration pursuant to Section 2.1(a) or 2.1(b), as the case may be.
"INITIAL PUBLIC OFFERING" means the initial underwritten public
offering of shares of Common Stock pursuant to an effective Registration
Statement.
"JUNIOR REGISTRABLE SHARES" means (i) the 10,000,000 shares of Common
Stock owned of record by BayCorp on the date hereof and (ii) the 4,814,815
shares of Common Stock owned of record by Equiva on the date hereof, in each
case such number of shares to be adjusted in the event of stock splits, stock
dividends, reclassifications, recapitalizations or similar events.
"OTHER HOLDERS" shall have the meaning set forth in Section 2.1(e).
"PROSPECTUS" means the prospectus included in any Registration
Statement, as amended or supplemented by an amendment or prospectus supplement,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
"REGISTRATION STATEMENT" means a registration statement filed by the
Company with the Commission for a public offering and sale of securities of the
Company (other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"REGISTRATION EXPENSES" means the expenses described in Section 2.4.
"REGISTRABLE SHARES" means Senior Registrable Shares and Junior
Registrable Shares PROVIDED, HOWEVER, that shares of Common Stock which are
Registrable Shares shall cease to be Registrable Shares (i) upon any sale
pursuant to a Registration Statement or Rule 144 under the Securities Act, (ii)
at such time they become eligible for resale pursuant to Rule 144(k) under the
Securities Act or (iii) upon any sale in any manner to a person or entity which,
by virtue of Section 4 of this Agreement, is not entitled to the rights provided
by this Agreement. Wherever reference is made in this Agreement to a request or
consent of holders of a certain percentage of Registrable Shares, the
determination of such percentage shall include shares of Common Stock issuable
upon conversion of the Shares even if such conversion has not been effected.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"SELLING STOCKHOLDER" means any Stockholder owning Registrable Shares
included in a Registration Statement.
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"SENIOR REGISTRABLE SHARES" means (i) the shares of Common Stock
issued or issuable upon conversion of the Shares, (ii) any shares of Common
Stock acquired or issuable upon the conversion or exercise of any other
securities acquired, by the Stockholders pursuant to Section 3 of this Agreement
and (iii) any other shares of Common Stock issued in respect of shares referred
to in the foregoing clauses (i) or (ii) (because of stock splits, stock
dividends, reclassifications, recapitalizations or similar events).
"SHARES" shall have the meaning specified in Subsection 1.2 of the
Series A Preferred Stock Purchase Agreement.
"STOCKHOLDERS" means BayCorp and the Purchasers and any persons or
entities to whom the rights granted under this Agreement are transferred by
BayCorp or any Purchasers, their successors or assigns pursuant to Section 4
hereof.
2. REGISTRATION RIGHTS.
2.1. REQUIRED REGISTRATIONS.
(a) Subject to the terms and conditions of this Agreement,
including without limitation Section 2(g), at any time after the earlier of (x)
the third anniversary date of this Agreement or (y) six months after the closing
of the Initial Public Offering, a Stockholder or Stockholders holding in the
aggregate at least 30% of the Senior Registrable Shares then outstanding may
request, in writing, that the Company effect the registration on Form S-1 or
Form S-2 (or any successor form) of Senior Registrable Shares owned by such
Stockholder or Stockholders having an aggregate value of at least $10,000,000
(based on the then current market price or fair value). Each such Stockholder's
request shall specify the number of Registrable Shares for which registration is
sought by such Stockholder.
(b) Subject to the terms and conditions of this Agreement,
including without limitation Section 2(g), at any time after the Company becomes
eligible to file a Registration Statement on Form S-3 (or any successor form
relating to secondary offerings), a Stockholder or Stockholders holding in the
aggregate at least 15% of the Senior Registrable Shares then outstanding or
holding any Junior Registrable Shares may request, in writing, that the Company
effect the registration on Form S-3 (or such successor form), of Registrable
Shares having an aggregate value of at least $5,000,000 (based on the then
current public market price).
(c) Upon receipt of any request for registration pursuant to
this Section 2, the Company shall promptly give written notice of such proposed
registration to all other Stockholders. Such Stockholders shall have the right,
by giving written notice to the Company within 20 days after the Company
provides its notice, to elect to have included in such registration such of
their Registrable Shares as such Stockholders may request in such notice of
election, subject in the case of an underwritten offering to the approval of the
managing underwriter as provided in Section 2.1(e) below. Thereupon, the Company
shall, as expeditiously as possible, use commercially reasonable efforts to
effect the registration on an appropriate registration form of all Registrable
Shares which the Company has been requested to so register (provided, however,
that in the case of a registration requested under Section 2.1(b),
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the Company will only be obligated to effect such registration on Form S-3 (or
any successor form)).
(d) If the Initiating Holders intend to distribute the
Registrable Shares covered by their request by means of an underwriting, they
shall so advise the Company as a part of their request made pursuant to Section
2.1(a) or (b), as the case may be, and the Company shall include such
information in its written notice referred to in Section 2.1(c). The right of
any other Stockholder to include its Registrable Shares in such registration
pursuant to Section 2.1(a) or (b), as the case may be, shall be conditioned upon
such other Stockholder's participation in such underwriting on the terms set
forth herein.
(e) If the Company desires that any officers or directors of the
Company holding securities of the Company be included in any registration for an
underwritten offering requested pursuant to Section 2.1(d) or if other holders
of securities of the Company who are entitled, by contract with the Company, to
have securities included in such a registration (the "Other Holders") request
such inclusion, the Company may include the securities of such officers,
directors and Other Holders in such registration and underwriting on the terms
set forth herein. The Company shall (together with all Stockholders, officers,
directors and Other Holders proposing to distribute their securities through
such underwriting) enter into an underwriting agreement in customary form
(including, without limitation, customary indemnification and contribution
provisions on the part of the Company) with the managing underwriter; provided
that such underwriting agreement shall not provide for indemnification or
contribution obligations on the part of Stockholders materially greater than the
obligations of the Stockholders pursuant to Section 2.5; provided further, that
the Company shall use commercially reasonable efforts to negotiate with the
underwriters so that the underwriting agreement will not require the
Stockholders to make any representation or warranty other than in connection
with information described in Section 2.7. Notwithstanding any other provision
of this Section 2.1(e), if the managing underwriter advises the Company that the
inclusion of all shares requested to be registered would adversely affect the
offering or could not reasonably be sold within the price range acceptable to
the Initiating Holders owning a majority of the securities requested to be
included by the Initiating Holders, then first the securities of the Company
held by officers or directors of the Company (other than Registrable Shares),
second the securities held by Other Holders (other than Registrable Shares) and
third Junior Registrable Shares in the case of an offering initiated by holders
of Senior Registrable Shares and Senior Registrable Shares in the case of an
offering initiated by holders of Junior Registrable Shares shall be excluded
from such registration and underwriting in that order and to the extent deemed
advisable by the managing underwriter, and if a further limitation of the number
of shares is required, the number of shares that may be included in such
registration and underwriting shall be allocated first among all holders of
Senior Registrable Shares requesting registration in proportion, as nearly as
practicable, to the respective number of Senior Registrable Shares held by them
at the time of the request for registration made by the Initiating Holders
pursuant to Section 2.1(a) or (b), as the case may be and second among all
holders of Junior Registrable Shares requesting registration in proportion, as
nearly as practicable, to the respective number of Junior Registrable Shares
held by them at the time of the request for registration made by the Initiations
Holders pursuant to Section 2.1(a) or (b), as the case may be. If any holder of
Registrable Shares, officer, director or Other Holder who has requested
inclusion in such registration as provided above disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written notice to
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the Company, and the securities so withdrawn shall also be withdrawn from
registration. If the managing underwriter has not limited the number of
Registrable Shares or other securities to be underwritten, the Company may
include securities for its own account in such registration if (i) the managing
underwriter so agrees, (ii) the number of Registrable Shares and other
securities which would otherwise have been included in such registration and
underwriting will not thereby be limited and (iii) the inclusion of the
Company's securities will not, in the opinion of the managing underwriters,
adversely affect the ability of the holders of Registrable Shares to be included
in the offering to sell such Registrable Shares within the price range
acceptable to the Initiating Holders holding a majority of the securities
requested to be included by the Initiating Holders.
(f) The Company shall have the right to select the managing
underwriter(s) for any underwritten offering requested pursuant to Section
2.1(a) or (b), subject to the approval of a majority of the Initiating Holders,
which approval will not be unreasonably withheld or delayed.
(g) The Company shall not be required to file or cause a
Registration Statement to be declared effective for (i) more than one
registration pursuant to Section 2.1(a) during any 12-month period, (ii) more
than two registrations pursuant to Section 2.1(a) during the term of this
Agreement, (iii) more than seven registrations pursuant to Section 2.1(b) during
the term of this Agreement, of which two may be initiated by BayCorp, one may be
initiated by Equiva as to its Junior Registrable Shares, one may be initiated by
Xxxxxxx Associates, L.P. ("Xxxxxxx"), one may be initiated by Omega Advisors,
Inc. ("Omega") and two may be initiated by holders of Senior Registrable Shares
other than Xxxxxxx and Omega. In addition, during the one year immediately
following the Initial Public Offering, the Company shall not be required to
effect any registration (other than a registration on Form S-3 or any successor
form relating to non-underwritten secondary offerings) within six months after
the effective date of any other Registration Statement of the Company. After the
first anniversary of the Initial Public Offering, the Company shall not be
required to effect any registration (other than a registration on Form S-3 or
any successor form relating to non-underwritten secondary offerings) within
three months after the effective date of any other Registration Statement of the
Company. For purposes of this Section 2.1(g), a Registration Statement shall not
be counted until such time as such Registration Statement has been declared
effective by the Commission (unless the Initiating Holders withdraw their
request for such registration (other than as a result of adverse information
concerning the business or financial condition of the Company which is made
known to the Stockholders after the date on which such registration was
requested) and elect not to pay the Registration Expenses therefor pursuant to
Section 2.4). In addition, and notwithstanding the foregoing provisions of this
Section 2.1(g), in the event that, in connection with any registration pursuant
to 2.1(a) or 2.1(b), if (x) the underwriters insist, despite commercially
reasonable efforts by the Company to the contrary, that as a condition to the
participation of Equiva in the offering Equiva make representations and
warranties other than representations and warranties in connection with
information described in Section 2.7 and (y) Equiva elects not to participate in
such registration as a result of such underwriters' action, then Equiva by
itself shall be entitled to initiate one additional registration pursuant to
Section 2.1(a) or 2.1(b), as applicable, regardless of the percentage of
outstanding shares of Senior Registrable Shares or Junior Registrable Shares
then owned at such time by Equiva or the aggregate value of the Senior
Registrable Shares or Junior Registrable Shares to be registered (by Equiva or
others), and the number of registrations
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that the Company is required to effect pursuant to clause (ii) or (iii), as the
case may be, shall be increased by one.
(h) If at the time of any request to register Registrable Shares
by Initiating Holders pursuant to this Section 2.1, the Company is engaged or
has plans to engage in a registered public offering or is engaged in any other
activity which, in the good faith determination of the Company's Board of
Directors, would be adversely affected by the requested registration, then the
Company may at its option direct that such request be delayed for a period not
in excess of 50 days from the date of such request. During any such delay
period, the Company shall continue to prepare a proposed Registration Statement,
but may delay filing a Registration Statement pursuant to this Section 2.1(h).
The Company's right to delay a request may not be exercised by the Company more
than twice in any 12-month period.
2.2. INCIDENTAL REGISTRATION.
(a) Whenever the Company proposes to file a Registration
Statement (other than a Registration Statement filed pursuant to Section 2.1 or
a Registration Statement covering shares to be sold solely for the account of
Other Holders) at any time and from time to time, it will, prior to such filing,
give written notice to all Stockholders of its intention to do so; PROVIDED,
that no such notice need be given if no Registrable Shares are to be included
therein as a result of a determination of the managing underwriter pursuant to
Section 2.2(b). Upon the written request of a Stockholder or Stockholders given
within 20 days after the Company provides such notice (which request shall state
the intended method of disposition of such Registrable Shares), the Company
shall use commercially reasonable efforts to cause all Registrable Shares which
the Company has been requested by such Stockholder or Stockholders to register
to be registered under the Securities Act to the extent necessary to permit
their sale or other disposition in accordance with the intended methods of
distribution specified in the request of such Stockholder or Stockholders;
provided that the Company shall have the right to postpone or withdraw any
registration effected pursuant to this Section 2.2 without obligation to any
Stockholder.
(b) If the registration for which the Company gives notice
pursuant to Section 2.2(a) is a registered public offering involving an
underwriting, the Company shall so advise the Stockholders as a part of the
written notice given pursuant to Section 2.2(a). In such event, the right of any
Stockholder to include its Registrable Shares in such registration pursuant to
Section 2.2 shall be conditioned upon (i) such Stockholder's participation in
such underwriting on the terms set forth herein and (ii) the Company's right to
first register securities under Section 2.2(a) in preference over the
Stockholders' incidental registration rights pursuant to this Section 2.2. All
Stockholders proposing to distribute their securities through such underwriting
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for the underwriting by the Company;
provided that such underwriting agreement shall not provide for indemnification
or contribution obligations on the part of Stockholders materially greater than
the obligations of the Stockholders pursuant to Section 2.5; provided further,
that the Company shall use commercially reasonable efforts to negotiate with the
underwriters so that the underwriting agreement will not require the
Stockholders to make any representation or warranty other than in connection
with information described in Section 2.7. Notwithstanding any other provision
of this Section 2.2, if the managing underwriter determines that the inclusion
of all
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shares requested to be registered would adversely affect the offering, the
Company may limit the number of Registrable Shares to be included in the
registration and underwriting. The Company shall so advise all holders of
Registrable Shares requesting registration; and the number of shares that are
entitled to be included in the registration and underwriting shall be allocated
in the following manner. The securities of the Company held by holders other
than Stockholders and Other Holders shall be excluded from such registration and
underwriting to the extent deemed advisable by the managing underwriter, and, if
a further limitation on the number of shares is required, the number of shares
that may be included in such registration and underwriting shall be allocated
among all Stockholders and Other Holders requesting registration in proportion,
as nearly as practicable, to the respective number of shares of Common Stock (on
an as-converted basis) which they held at the time the Company gives the notice
specified in Section 2.2(a). If any Stockholder or Other Holder would thus be
entitled to include more securities than such holder requested to be registered,
the excess shall be allocated among other requesting Stockholders and Other
Holders pro rata in the manner described in the preceding sentence. If any
holder of Registrable Shares or any officer, director or Other Holder
disapproves of the terms of any such underwriting, such person may elect to
withdraw therefrom by written notice to the Company, and any Registrable Shares
or other securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration. Notwithstanding any other provision of this
Section 2.2, the Company shall not be required to exclude or reduce in amount
any shares of Common Stock proposed to be sold by the Company in order to
facilitate the registration of Registrable Shares or any other shares of Common
Stock held by Company stockholders.
2.3. REGISTRATION PROCEDURES.
(a) If and whenever the Company is required by the provisions of
this Agreement to use all commercially reasonable efforts to effect the
registration of Registrable Securities under the Securities Act, the Company
will, as expeditiously as practicable, do the following:
(i) prepare and file with the Commission a Registration
Statement with respect to such Registrable Shares and use all commercially
reasonable efforts to cause that Registration Statement to become effective as
soon as practicable and endeavor to cause the registration statement to remain
effective until the earlier of (i) the date when all Registrable Shares covered
thereby have been sold or (ii) 90 days from the effective date of the
Registration Statement; provided that before filing a Registration Statement or
Prospectus or any amendments or supplements thereto, the Company shall furnish
to one counsel, selected by the holders of Registrable Shares covered by the
Registration Statement as a group, a copy of all such documents proposed to be
filed;
(ii) prepare and file with the Commission any amendments and
supplements to the Registration Statement and the prospectus included in the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act (including the anti-fraud provisions thereof) and to keep the
Registration Statement effective for 90 days from the effective date or such
lesser period until all such Registrable Shares are sold;
(iii) furnish to each Selling Stockholder such reasonable
numbers of copies of the Prospectus, including any preliminary Prospectus or
Prospectus filed
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pursuant to Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents as such Selling
Stockholder may reasonably request in order to facilitate the public sale or
other disposition of the Registrable Shares owned by such Selling Stockholder;
(iv) use all commercially reasonable efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the Selling Stockholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the Selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the Selling Stockholder; PROVIDED, HOWEVER, that the Company shall not be
required in connection with this paragraph (iv) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction;
(v) cause all such Registrable Shares to be listed, prior
to the date of the first sale of such Registrable Shares pursuant to the
registration, on each securities exchange or automated quotation system on which
similar securities issued by the Company are then listed; and if not then so
listed, to use commercially reasonable efforts to cause all such Registrable
Securities to be listed, prior to the date of the first sale of such Registrable
Securities pursuant to the registration and to the extent the Company meets the
securities exchange or automated quotation system's listing requirements, on
such exchange or system; provided that if such listing is not commercially
practicable, then as "pink sheet" or similar securities, if commercially
practicable; provided further that if no such listing is commercially
practicable, the Company shall have no obligations under this clause (v);
(vi) promptly provide a transfer agent and registrar for all
such Registrable Shares not later than the effective date of such registration
statement;
(vii) promptly make available for inspection by each Selling
Stockholder, any managing underwriter participating in any disposition pursuant
to such Registration Statement, and any one attorney or any one accountant
retained by any such underwriter or selected by the Selling Stockholders as a
group, all financial and other records, pertinent corporate documents and
properties of the Company and cause the Company's officers, directors, employees
and independent accountants to supply all information reasonably requested by
any such seller, underwriter, attorney, accountant or agent in connection with
such Registration Statement;
(viii) notify each Selling Stockholder, promptly after it
shall receive notice thereof, of the time when such Registration Statement has
become effective or a supplement to any Prospectus forming a part of such
Registration Statement has been filed;
(ix) promptly following the effectiveness of such
Registration Statement, notify each seller of such Registrable Shares of any
request by the Commission for the amending or supplementing of such Registration
Statement or Prospectus;
(x) notify each Selling Stockholder, at any time when a
Prospectus relating thereto is required to be delivered under the Securities
Act, when the
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Company learns of the happening of any event as a result of which the Prospectus
included in such Registration Statement contains an untrue statement of a
material fact or omits any fact necessary to make the statements therein not
materially misleading, and, at the request of any such seller, the Company will
promptly prepare (and, when completed, give notice to each Selling Stockholder)
a supplement or amendment to such Prospectus so that, as thereafter delivered to
the purchasers of the Registrable Shares, such Prospectus will not contain an
untrue statement of a material fact or omit to state any fact necessary to make
the statements therein not materially misleading; provided that upon such
notification by the Company, each Selling Stockholder will not offer or sell
such Registrable Securities until the Company has notified such seller that it
has prepared a supplement or amendment to such Prospectus and delivered copies
of such supplement or amendment to such Selling Stockholder;
(xi) enter into all such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
any Selling Stockholder or the underwriters, if any, reasonably request in order
to expedite or facilitate the disposition of such Registrable Shares;
(xii) in the event of the issuance of any stop order
suspending the effectiveness of a Registration Statement, or of any order
suspending or preventing the use of any related Prospectus or suspending the
qualification of any Registrable Shares included in such Registration Statement
for sale in any jurisdiction, the Company will use commercially reasonable
efforts promptly to obtain the withdrawal of such order;
(xiii) use its commercially reasonable efforts to obtain:
(A) at the time of effectiveness of each registration,
a "comfort letter" from the Company's independent certified public accountants
covering such matters of the type customarily covered by "cold comfort letters"
as the underwriters reasonably request; and
(B) at the time of any underwritten sale pursuant to a
Registration Statement, a "bring-down comfort letter," dated as of the date of
such sale, from the Company's independent certified public accountants covering
such matters of the type customarily covered by comfort letters as the
underwriters reasonably request;
(xiv) use its commercially reasonable efforts to obtain, at
the time of effectiveness of each registration described in Section 2.2 and at
the time of any sale pursuant to each registration, an opinion or opinions, from
counsel to the Company, as reasonably requested by the Selling Stockholders
regarding matters of the type customarily included in such opinions; and
(xv) make generally available to its stockholders as soon as
practicable, but not later than 45 days after the end of the 12-month period
beginning at the end of the fiscal quarter of the Company during which the
effective date of the Registration Statement occurs (or 90 days if such 12-month
period coincides with the Company's fiscal year), an earnings statement (which
need not be audited) of the Company, covering such 12-month
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period which shall satisfy the provisions of Section 11(a) of the Securities Act
or Rule 158 under the Securities Act.
(b) If the Company has delivered a Prospectus to the Selling
Stockholders and after having done so the Prospectus is amended to comply with
the requirements of the Securities Act, the Company shall promptly notify the
Selling Stockholders and, if requested, the Selling Stockholders shall
immediately cease making offers of Registrable Shares and return all
Prospectuses to the Company. The Company shall promptly provide the Selling
Stockholders with revised Prospectuses and, following receipt of the revised
Prospectuses, the Selling Stockholders shall be free to resume making offers of
the Registrable Shares.
(c) In the event that, in the judgment of the Company, it is
advisable to suspend use of a Prospectus included in a Registration Statement
due to pending material developments or other events that have not yet been
publicly disclosed and as to which the Company believes public disclosure would
be detrimental to the Company, the Company shall notify all Selling Stockholders
to such effect, and, upon receipt of such notice, each such Selling Stockholder
shall immediately discontinue any sales of Registrable Shares pursuant to such
Registration Statement until such Selling Stockholder has received copies of a
supplemented or amended Prospectus or until such Selling Stockholder is advised
in writing by the Company that the then current Prospectus may be used and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus. Notwithstanding anything
to the contrary herein, the Company shall not exercise its rights under this
Section 2.3(c) to suspend sales of Registrable Shares for a period in excess of
50 days more than twice in any 12-month period.
2.4. ALLOCATION OF EXPENSES. The Company will pay all Registration
Expenses for all registrations under this Agreement; PROVIDED, HOWEVER, that if
a registration under Section 2.1 is withdrawn at the request of the Initiating
Holders (other than as a result of adverse information concerning the business
or financial condition of the Company which is made known to the Stockholders
after the date on which such registration was requested) and if the Initiating
Holders elect not to have such registration counted as a registration requested
under Section 2.1, the requesting Stockholders shall pay the Registration
Expenses of such registration pro rata in accordance with the number of their
Registrable Shares included in such registration. For purposes of this Section,
the term "Registration Expenses" shall mean all expenses incurred by the Company
in performing or complying with this Agreement, including, without limitation,
all registration and filing fees, exchange or quotation listing fees, printing
expenses, messenger and delivery fees, fees and expenses of counsel for the
Company, state Blue Sky fees and expenses and the fees and expenses of any
certified public accountants of the Company and other third parties specifically
retained by the Company, but excluding underwriting discounts, selling
commissions and the fees and expenses of Selling Stockholders' own counsel.
2.5. INDEMNIFICATION AND CONTRIBUTION.
(a) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless each Selling Stockholder, its directors, officers
and shareholders, each underwriter of
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such Registrable Shares and each other person, if any, who controls such Selling
Stockholder or underwriter within the meaning of the Securities Act or the
Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such Selling Stockholder, underwriter or controlling person
may become subject under the Securities Act, the Exchange Act, state securities
or Blue Sky laws 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 Registrable Shares were registered
under the Securities Act, any preliminary prospectus or final prospectus
contained in the Registration Statement, or any amendment or supplement to such
Registration Statement, or arise out of or are based upon the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and the Company will
reimburse such Selling Stockholder, underwriter and each such controlling person
for any legal or any other expenses reasonably incurred by such Selling
Stockholder, underwriter or controlling person 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 to the extent that
any such loss, claim, damage or liability arises out of or is based upon any
untrue statement or omission made in such Registration Statement, preliminary
prospectus or prospectus, or any such amendment or supplement, in reliance upon
and in conformity with information furnished to the Company, in writing, by or
on behalf of such Selling Stockholder, underwriter or controlling person
specifically for use in the preparation thereof; FURTHER PROVIDED, HOWEVER, that
the Company shall be liable and shall provide indemnification under this Section
2.5(a) to the extent that (after such Selling Stockholder, underwriter or
controlling person furnishes to the Company, in writing, information that
corrects any previous untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement under which such
Registrable Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained in the Registration Statement, or any
amendment or supplement to such Registration Statement, or arise out of or are
based upon the previous omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading) the Company fails to prepare and deliver to purchasers of the
Company's securities pursuant to such registration a final prospectus that
corrects such previous untrue statement or alleged untrue statement of material
fact or such previous omission or alleged omission to state a material fact and
such correction is in conformity with information furnished to the Company, in
writing, by or on behalf of such Selling Stockholder, underwriter or controlling
person specifically for use in the preparation thereof.
(b) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, each Selling
Stockholder, severally and not jointly, will indemnify and hold harmless the
Company, each of its directors and officers and each underwriter (if any) and
each person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company, such directors
and officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws 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 a material fact contained in any Registration Statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary
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prospectus or final prospectus contained in the Registration Statement, or any
amendment or supplement to the Registration Statement, or arise out of or are
based upon any omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only if and to the extent the statement or omission was made in reliance
upon and in conformity with information relating to such Selling Stockholder
furnished in writing to the Company by or on behalf of such Selling Stockholder
indicating that it was provided specifically for use in such Registration
Statement, prospectus, amendment or supplement; PROVIDED, HOWEVER, that the
obligations of a Selling Stockholder hereunder shall be limited to an amount
equal to the net proceeds to such Selling Stockholder of Registrable Shares sold
in connection with such registration.
(c) Each party entitled to indemnification under this Section
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; PROVIDED, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, PROVIDED, FURTHER, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section except to the extent that the Indemnifying Party
is adversely affected by such failure. The Indemnified Party may participate in
such defense at such party's expense; PROVIDED, HOWEVER, that the Indemnifying
Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding; PROVIDED FURTHER that in
no event shall the Indemnifying Party be required to pay the expenses of more
than one law firm per jurisdiction as counsel for the Indemnified Party. The
Indemnifying Party also shall be responsible for the expenses of such defense if
the Indemnifying Party does not elect to assume such defense. No Indemnifying
Party, in the defense of any such claim or litigation shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect of such claim or litigation, and no Indemnified Party
shall consent to entry of any judgment or settle such claim or litigation
without the prior written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 2.5 is
due in accordance with its terms but for any reason is held to be unavailable to
an Indemnified Party in respect to any losses, claims, damages and liabilities
referred to herein, then the Indemnifying Party shall, in lieu of indemnifying
such Indemnified Party, contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities to
which such party may be subject in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Selling Stockholders
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company and the Selling
Stockholders shall be determined by reference to, among other things, whether
the untrue or
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alleged untrue statement of material fact related to information supplied by the
Company or the Selling Stockholders and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Selling Stockholders agree that it would not be
just and equitable if contribution pursuant to this Section 2.5 were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph of Section 2.5, (a) in no case shall any one
Selling Stockholder be liable or responsible for any amount in excess of the net
proceeds received by such Selling Stockholder from the offering of Registrable
Shares and (b) the Company shall be liable and responsible for any amount in
excess of such proceeds; PROVIDED, HOWEVER, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section, notify such party or
parties from whom contribution may be sought, but the omission so to notify such
party or parties from whom contribution may be sought shall not relieve such
party from any other obligation it or they may have thereunder or otherwise
under this Section. No party shall be liable for contribution with respect to
any action, suit, proceeding or claim settled without its prior written consent,
which consent shall not be unreasonably withheld.
2.6. OTHER MATTERS WITH RESPECT TO UNDERWRITTEN OFFERINGS. In the
event that Registrable Shares are sold pursuant to a Registration Statement in
an underwritten offering pursuant to Section 2.1, the Company agrees to (a)
enter into an underwriting agreement containing customary representations and
warranties with respect to the business and operations of the Company and
customary covenants and agreements to be performed by the Company, including
without limitation customary provisions with respect to indemnification by the
Company of the underwriters of such offering; (b) cause its legal counsel to
render customary opinions to the underwriters with respect to the Registration
Statement; and (c) cause its independent public accounting firm to issue
customary "cold comfort letters" to the underwriters with respect to the
Registration Statement.
2.7. INFORMATION BY HOLDER. Each holder of Registrable Shares included
in any registration shall furnish 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 required in connection with any
registration, qualification or compliance referred to in this Agreement.
2.8. "STAND-OFF" AGREEMENT; CONFIDENTIALITY OF NOTICES. Each
Stockholder, if requested by the Company or the managing underwriter of an
underwritten public offering by the Company of Common Stock, shall not sell or
otherwise transfer or dispose of any Registrable Shares or other securities of
the Company held by such Stockholder for a period of 180 days following the
effective date of a Registration Statement; provided that such 180 day period
shall be reduced to 120 days for underwritten public offerings other than the
Company's Initial Public Offering and shall apply only if all of the Company's
directors and executive officers are subject to substantially equivalent
restrictions on sales, transfers and other dispositions of securities of the
Company held by such person or entity; further provided that in all cases, the
Company shall
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also be subject to substantially equivalent restrictions on sales, transfers and
other dispositions of securities of the Company for such 180-day or 120-day
periods, as the case may be.
The Company may impose stop-transfer instructions with respect to the
Registrable Shares or other securities subject to the foregoing restriction
until the end of such 180-day or 120-day periods, as the case may be.
Any Stockholder receiving any written notice from the Company regarding the
Company's plans to file a Registration Statement shall treat such notice
confidentially and shall not disclose such information to any person other than
as necessary to exercise its rights under this Agreement.
2.9. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. The Company shall
not, without the prior written consent of Stockholders holding at least 50% of
the Registrable Shares then held by all Stockholders, enter into any agreement
(other than this Agreement) with any holder or prospective holder of any
securities of the Company which grants such holder or prospective holder rights
to demand a registration of securities of the Company or include securities of
the Company in any Registration Statement, unless such rights are not more
favorable than the rights granted to the Stockholders under this Agreement.
2.10. RULE 144 REQUIREMENTS. After the earliest of (i) the closing of
the sale of securities of the Company pursuant to a Registration Statement, (ii)
the registration by the Company of a class of securities under Section 12 of the
Exchange Act, or (iii) the issuance by the Company of an offering circular
pursuant to Regulation A under the Securities Act, the Company agrees to:
(a) use all commercially reasonable efforts to make and keep
current public information about the Company available, as those terms are
understood and defined in Rule 144;
(b) use all commercially reasonable efforts to file with the
Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act (at any time after it has
become subject to such reporting requirements); and
(c) furnish to any holder of Registrable Shares upon request (i)
a written statement by the Company as to its compliance with the reporting
requirements of Rule 144 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 of the Company as such holder may reasonably request to
avail itself of any similar rule or regulation of the Commission allowing it to
sell any such securities without registration.
2.11. TERMINATION. All of the Company's obligations to register
Registrable Shares under Sections 2.1 and 2.2 of this Agreement shall terminate
ten years after the closing of the Initial Public Offering.
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3. RIGHT OF FIRST REFUSAL.
3.1. RIGHTS OF STOCKHOLDERS.
(a) The Company shall not issue, sell or exchange, agree to
issue, sell or exchange, or reserve or set aside for issuance, sale or exchange,
(i) any shares of its Common Stock, (ii) any other equity securities of the
Company, including, without limitation, shares of preferred stock, (iii) any
option, warrant or other right to subscribe for, purchase or otherwise acquire
any equity securities of the Company or any securities exercisable for or
convertible into any such securities or (iv) any debt securities convertible
into capital stock of the Company (collectively, the "Offered Securities"),
unless in each such case the Company shall have first complied with this Section
3.1. The Company shall deliver to each Stockholder a written notice of any
proposed or intended issuance, sale or exchange of Offered Securities (the
"Offer"), which Offer shall (i) identify and describe the Offered Securities,
(ii) describe the price and other terms upon which they are to be issued, sold
or exchanged, and the number or amount of the Offered Securities to be issued,
sold or exchanged, (iii) identify the persons or entities (if known) to which or
with which the Offered Securities are to be offered, issued, sold or exchanged
and (iv) offer to issue and sell to or exchange with such Stockholder (A) a pro
rata portion of the Offered Securities determined by dividing the aggregate
number of shares of Common Stock then held by such Stockholder (giving effect to
the full conversion or exercise of all shares of convertible preferred
securities then held) by the total number of shares of Common Stock then
outstanding (giving effect to the full conversion or exercise of all outstanding
shares of convertible preferred securities held by all Stockholders (the "Basic
Amount"), and (B) any additional portion of the Offered Securities attributable
to the Basic Amounts of other Stockholder as such Stockholder shall indicate it
will purchase or acquire should the other Stockholder subscribe for less than
their Basic Amounts (the "Undersubscription Amount").
(b) To accept an Offer, in whole or in part, a Stockholder must
deliver a written notice to the Company prior to 20 days after the date of
delivery of the Offer, setting forth the portion of the Stockholder's Basic
Amount that such Purchaser elects to purchase and, if such Stockholder shall
elect to purchase all of its Basic Amount, the Undersubscription Amount (if any)
that such Stockholder elects to purchase (the "Notice of Acceptance"). If the
Basic Amounts subscribed for by all Stockholders are less than the total of all
of the Basic Amounts available for purchase, then each Stockholder who has set
forth an Undersubscription Amount in its Notice of Acceptance shall be entitled
to purchase, in addition to the Basic Amounts subscribed for, the
Undersubscription Amount it has subscribed for; PROVIDED, HOWEVER, that if the
Undersubscription Amounts subscribed for exceed the difference between the total
of all of the Basic Amounts available for purchase and the Basic Amounts
subscribed for (the "Available Undersubscription Amount"), each Stockholder who
has subscribed for any Undersubscription Amount shall be entitled to purchase
only that portion of the Available Undersubscription Amount as the
Undersubscription Amount subscribed for by such Stockholder bears to the total
Undersubscription Amounts subscribed for by all Stockholders, subject to
rounding by the Board of Directors to the extent it deems reasonably necessary.
(c) The Company shall have 90 days from the expiration of the
period set forth in Section 3.1(b) above to issue, sell or exchange all or any
part of such Offered Securities as to which a Notice of Acceptance has not been
given by the Stockholders (the
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"Refused Securities"), but only to the offerees or purchasers described in the
Offer (if so described therein) and only upon terms and conditions (including,
without limitation, unit prices and interest rates) which are not more
favorable, to the acquiring person or persons or less favorable to the Company
than those set forth in the Offer.
(d) Any Offered Securities not acquired by the Stockholders or
other persons in accordance with Section 3.1(c) above may not be issued, sold or
exchanged until they are again offered to the Stockholders under the procedures
specified in this Agreement.
(e) The rights of a Stockholder under this Section 3 shall not
apply to:
(1) Common Stock issued as a stock dividend to holders of
Common Stock or upon any subdivision or combination of shares of Common Stock;
(2) the issuance of any shares of Common Stock upon
conversion of shares of convertible preferred stock;
(3) the issuance of up to 4,000,000 shares of Common Stock
or the grant of options therefor, including shares issued upon exercise of
options outstanding on the date of this Agreement to officers, directors,
consultants, advisors and employees of the Company or any subsidiary pursuant to
any plan, agreement or arrangement approved by a vote of not less than a
majority of the Board of Directors of the Company (such number of shares to be
adjusted in the event of stock splits, stock dividends, reclassifications,
recapitalizations or similar events);
(4) securities issued solely in consideration for the
acquisition (whether by merger or otherwise) by the Company or any of its
subsidiaries of all or substantially all of the stock or assets of any other
entity;
(5) shares of Common Stock sold by the Company in an
underwritten public offering pursuant to an effective registration statement
under the Securities Act; or
(6) shares of the Company's capital stock sold at a
"Subsequent Closing" (as that term is defined in Section 2(b) of the Series A
Preferred Stock Purchase Agreement).
3.2. TERMINATION. This Section 3 shall terminate upon the earliest of
the following events:
(a) The sale of all or substantially all of the assets or
business of the Company, by merger, sale of assets or otherwise;
(b) The closing of the Initial Public Offering; or
(c) such time as less than 25% of the aggregate of all
originally issued shares of Series A Preferred Stock are outstanding (such
number to be proportionately adjusted
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in the event of any stock splits, stock dividends, recapitalizations or similar
events occurring on or after February 1, 2000).
4. TRANSFERS OF RIGHTS. This Agreement, and the rights and obligations of
each Stockholder hereunder, may be assigned by such Stockholder to (i) any
person or entity to which at least 50,000 Registrable Shares are transferred by
such Stockholder or (ii) to any partner, stockholder or Affiliate (as defined
below) of such Stockholder, and such transferee shall be deemed a "Stockholder"
for purposes of this Agreement; provided that the transferee provides written
notice of such assignment to the Company and agrees in writing to be bound
hereby. For purposes of the preceding sentence, an "Affiliate" of a Stockholder
is a person controlled by, controlling or under common control of such
Stockholder.
5. GENERAL.
(a) SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(b) SPECIFIC PERFORMANCE. In addition to any and all other
remedies that may be available at law in the event of any breach of this
Agreement, each Purchaser shall be entitled to specific performance of the
agreements and obligations of the Company hereunder and to such other injunctive
or other equitable relief as may be granted by a court of competent
jurisdiction.
(c) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware (without
reference to the conflicts of law provisions thereof).
(d) NOTICES. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be deemed
delivered (i) three business days after being sent by certified mail, return
receipt requested, postage prepaid or (ii) one business day after being sent via
a reputable nationwide overnight courier service guaranteeing next business day
delivery, in each case to the intended recipient at his, hers or its address as
set forth in the Series A Preferred Stock Purchase Agreement.
Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section.
(e) COMPLETE AGREEMENT. This Agreement constitutes the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings relating to
such subject matter.
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(f) AMENDMENTS AND WAIVERS. No amendment, modification or
termination of, or waiver (other than a waiver as to only the rights of the
particular party granting the waiver) under, any provision of this Agreement
shall be valid unless in writing and signed by the holders of 75% of the voting
power of the Senior Registrable Shares then outstanding (assuming the conversion
into Common Stock of all securities convertible thereinto); provided that:
(i) the consent of the Company shall be required to effect
any amendment, modification or termination of, or waiver under, any provision of
this Agreement that adversely affects the Company's rights or obligations set
forth in this Agreement (it being agreed that adding Purchasers pursuant to
Section 5.f(ii) does not adversely affect the Company's rights or obligations
set forth in this Agreement);
(ii) any amendment, modification or termination, or waiver
under, this Agreement that grants to subsequent purchasers of the Company's
capital stock, or options to purchase such capital stock or securities
convertible into such capital stock, rights under this Agreement (subject to
obligations that are substantially equivalent to those of the Purchasers under
this Agreement) on a pro rata basis with the Purchasers only shall require the
written consent of Purchasers holding a majority of the voting power of the
Senior Registrable Shares then outstanding (assuming the conversion into Common
Stock of all securities convertible thereinto);
(iii) any amendment, modification or waiver (other than a
waiver as to only the rights of the particular party granting the waiver) under
this Agreement that is not executed by all Purchasers shall affect all
Purchasers in the same fashion;
(iv) subsequent purchasers of the Company's capital stock,
or options to purchase such capital stock or securities convertible into such
capital stock, specified in Section 5.f(ii) shall constitute "Purchasers" for
purposes of this Agreement and the securities of the Company owned by such
purchasers shall constitute "Senior Registrable Shares" for purposes of this
Agreement;
(v) to the extent a provision of Section 2 of this
Agreement relates to Junior Registrable Shares, any amendment, modification or
waiver (other than a waiver as to only the rights of the particular party
granting the waiver) of such provision shall require the written consent of
holders of at least 75% of the then-outstanding Junior Registrable Shares;
(vi) any amendment, modification or termination, or waiver
under, Section 3.1(e)(3) of this Agreement shall require the written consent of
Purchasers holding a majority of the voting power of the Senior Registrable
Shares then outstanding (assuming the conversion into Common Stock of all
securities convertible thereinto); and
(vii) any amendment, modification or termination effected in
accordance with this Section 5(f) shall be binding upon all parties hereto.
(g) PRONOUNS. Whenever the context may require, any pronouns
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural, and vice versa.
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(h) COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, and all of which together shall constitute one and the same document.
This Agreement may be executed by facsimile signatures.
(i) SECTION HEADINGS. The section headings are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
as of the day and year first above written.
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