EXHIBIT 10.45
HOUSTONSTREET EXCHANGE, INC.
AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
This Agreement dated as of March 30, 2001 amends and restates (i) that
certain Investor Rights Agreement dated as of February 2, 2000 and amended March
6, 2000, March 31, 2000 and December 4, 2000, by and among HoustonStreet Street
Exchange, Inc., a Delaware corporation (the "Company"), BayCorp Holdings, Ltd.,
a Delaware corporation ("BayCorp"), Equiva Trading Company, a Delaware general
partnership ("Equiva"), Enron Net Work LLC, a Delaware limited liability company
("Enron"), and the Purchasers named therein (the "Series A Investor Rights
Agreement") and (ii) that certain Investor Rights Agreement dated as of March
31, 2000 by and among the Company and the holders of Series B Convertible
Preferred Stock, par value $.01 per share, of the Company (the "Series B Stock")
(the "Series B Investor Rights Agreement").
This Agreement is entered into by and among the Company, BayCorp,
Equiva, Enron, the holders of Series A Convertible Preferred Stock, par value
$.01 per share, of the Company (the "Series A Stock") listed on SCHEDULE A
hereto (the "Series A Stockholders"), the holders of Series B Stock listed on
SCHEDULE A hereto (the "Series B Stockholders") and the purchasers of units
("Units") consisting of (x) Senior Secured Notes, (y) Warrants to purchase
shares of Series C Convertible Preferred Stock, par value $.01 per share of the
Company (the "Series C Stock" and, together with the Series A Stock and the
Series B Stock, the "Preferred Stock") (the "Series C Warrants"), and (z)
Warrants to purchase shares of Common Stock, $.01 par value per share (the
"Common Stock") (the "Common Stock Warrants"), pursuant to that certain Secured
Note and Warrant Purchase Agreement dated as of the date hereof (the "Note and
Warrant Purchase Agreement") listed on SCHEDULE A hereto (the "Unit
Purchasers"). In the event of an Additional Initial Closing (as defined in the
Note and Warrant Purchase Agreement), SCHEDULE A hereto will be amended to
include such purchasers as Unit Purchasers hereunder.
RECITALS
1. The Series A Stockholders purchased certain shares of Series A Stock
pursuant to the Series A Convertible Preferred Stock Purchase Agreement dated as
of February 2, 2000 (the "Series A Preferred Stock Purchase Agreement").
2. Equiva purchased 4,814,815 shares of the Common Stock pursuant to
the Common Stock Purchase Agreement dated as of February 2, 2000.
3. BayCorp owns of record 10,000,000 shares of Common Stock.
4. The Series B Stockholders purchased certain shares of Series B Stock
pursuant to the Series B Convertible Preferred Stock Purchase Agreement dated as
of March 31, 2000 (the "Series B Preferred Stock Purchase Agreement").
5. Enron purchased 1,781,043 shares of Common Stock pursuant to the
Common Stock Purchase Agreement dated as of September 20, 2000.
6. On December 4, 2000, the Company issued to Enron a warrant (the
"Enron Warrant") to purchase a minimum of 2,544,347 shares of Common Stock (or
such number of shares of Common Stock equal to ten 10% of the outstanding Common
Stock on the date of exercise of the Enron Warrant) pursuant to the Warrant
Agreement dated as of December 4, 2000.
7. The Unit Purchasers are purchasing, concurrently herewith, the Units
pursuant to the Note and Warrant Purchase Agreement.
8. 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.
9. Section 5(f) of the Series A Investor Rights Agreement provides that
the Series A Investor Rights Agreement may be amended with the written consent
of the holders of 75% of the voting power of the Series A Stock, and the Common
Stock issued and issuable to Enron and the Common Stock issuable upon exercise
of the Enron Warrant then outstanding (giving effect to the conversion into
Common Stock of all securities convertible thereinto).
10. Section 5.6 of the Series B Investor Rights Agreement provides that
the Series B Investor Rights Agreement may be amended with the written consent
of the holders of 75% of the voting power of the Series B Stock then outstanding
(giving effect to the conversion into Common Stock of all securities convertible
thereinto).
11. The Company, BayCorp, Equiva, Enron, the Series A Stockholders and
the Series B Stockholders are the holders of at least 75% of the voting power of
the Series A Stock, the Series B Stock, the Common Stock issued and issuable to
Enron and the Common Stock issuable upon exercise of the Enron Warrant
outstanding (giving effect to the conversion into Common Stock of all securities
convertible thereinto) and of at least 75% of the voting power of the Series B
Stock outstanding (giving effect to the conversion into Common Stock of all
securities convertible thereinto), in each case immediately prior to the
issuance of the Units.
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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.
"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, 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).
"Preferred Stockholders" means the Series A Stockholders, the Series B
Stockholders and the Series C Stockholders and their respective successors or
permitted assigns.
"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
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Registrable Shares, the determination of such percentage shall include shares of
Common Stock issuable upon conversion of the shares of Preferred Stock 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.
"Senior Registrable Shares" means (i) the shares of Common Stock issued
or issuable upon conversion of the Preferred Stock, (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, (iii) the shares of Common Stock issued or issuable to Enron, (iv)
the shares of Common Stock issued or issuable upon exercise of the Enron Warrant
once it becomes exercisable, (v) the shares of Common Stock issued or issuable
upon exercise of the Common Stock Warrants once they become exercisable, (vi)
the shares of Common Stock issued or issuable upon conversion of the Series C
Stock issued or issuable upon exercise of the Series C Stock Warrants once they
become exercisable and (vii) any other shares of Common Stock issued in respect
of shares referred to in the foregoing clauses (i), (ii), (iii), (iv), (v) and
(vi) (because of stock splits, stock dividends, reclassifications,
recapitalizations or similar events).
"Series C Stockholder" means any holder of Series C Stock and any Unit
Purchaser or his, her or its respective successors or permitted assigns who
exercises any Series C Warrant.
"Stockholders" means BayCorp, Enron and the Preferred Stockholders and
any persons or entities to whom the rights granted under this Agreement are
transferred by BayCorp, Enron or the Preferred Stockholders, their respective
successors or permitted 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 2.1(g), at any time after
the earlier of (x) the third anniversary date of the
Subsequent Closing (as defined in the Note and Warrant
Purchase Agreement) of the Units or (y) six months after the
closing of the Initial Public Offering, a Stockholder or
Stockholders holding in the aggregate at least 15% 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 Senior Registrable Shares
for which registration is sought by such Stockholder.
(b) Subject to the terms and conditions of this Agreement,
including without limitation Section 2.1(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
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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 from any
stockholder having registration rights pursuant to this
Agreement or any other agreement, 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), 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 that are materially greater than the
obligations of the Stockholders under 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
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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), and 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
Initiating 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 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
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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 period 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 that the Company is required to
effect pursuant to clause (ii) or (iii), as the cases 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 such Registration Statement
pursuant to this Section 2.1(h). The Company's right to
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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 that are greater than the obligations of the
Stockholders under 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 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
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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 that 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
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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 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 Stockholders; 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 Shares to be listed, prior to the
date of the first sale of such Registrable Shares
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
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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 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:
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(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;
(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 period which shall satisfy the
provisions of Section 11(a) of the Securities Act or
Rule 158 under the Securities Act;
(xvi) 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; and
(xvii) 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
12
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 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 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,
13
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 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
14
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 alleged untrue
statement of material fact related to information supplied by
the Company or the Selling
15
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, (i) 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 (ii) 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.
In any underwritten offering in which shares of the Preferred
Stockholders are to be included, if the managing underwriter requests a
limitation in the number of such shares to be included therein, then
any such reduction shall be borne ratably by the Preferred Stockholders
in proportion to the number of shares held by each that carry
registration rights.
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.
16
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 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 85% 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
17
(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.
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 and warrants then held by
such Stockholder) 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 and warrants held by all Stockholders) (the "Basic
Amount"), and (B) in the event that all of the Offered
Securities are not subscribed for, all or any portion of the
Offered Securities that remain (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
Stockholder elects to purchase and, if such Stockholder shall
elect to purchase all
18
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 number or amount of the Offered
Securities, then each Stockholder who has offered to purchase
a portion of the 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 are over-subscribed, then each
Stockholder subscribing for a portion of the Undersubscription
Amount shall only be entitled to purchase his pro rata portion
of the Undersubscription Amount (determined by dividing the
Basic Amount of each Stockholder subscribing for a portion of
the Undersubscription Amount by the sum of the Basic Amounts
of all Stockholders subscribing for a portion of the
Undersubscription Amount), 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 "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:
(i) Common Stock issued as a stock dividend to
holders of Common Stock or upon any subdivision or
combination of shares of Common Stock;
(ii) Preferred Stock issued as a stock dividend to
holders of Preferred Stock or upon any subdivision or
combination of shares of Preferred Stock;
(iii) the issuance of any shares of Common Stock upon
conversion of shares of Preferred Stock;
(iv) the issuance of up to 35,387,796 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
19
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);
(v) 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;
(vi) the issuance of up to 10,000,000 shares of
Common Stock (such number of shares to be adjusted in
the event of stock splits, stock dividends,
reclassifications, recapitalizations or similar
events) to creditors of the Company in satisfaction
of amounts payable by the Company in transactions
approved by the Board of Directors of the Company;
(vii) shares of Common Stock sold by the Company in
an underwritten public offering pursuant to an
effective registration statement under the Securities
Act;
(viii) 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);
(ix) the sale by the Company of up to 266,667 shares
of the Company's Common Stock before May 31, 2000;
(x) the sale by the Company of up to 2,333,334 shares
of the Company's Series B Stock, before June 30,
2000;
(xi) the issuance of shares of the Company's Common
Stock to Enron pursuant to the terms of the Enron
Warrant;
(xii) the issuance of up to 763,305 shares of Common
Stock (such number of shares to be adjusted in the
event of stock splits, stock dividends,
reclassifications, recapitalizations or similar
events) to Enron pursuant to the terms of that Common
Stock Purchase Agreement dated as of September 20,
2000;
(xiii) the issuance of up to 60,000 shares of the
Company's Common Stock (such number of shares to be
adjusted in the event of stock splits, stock
dividends, reclassifications, recapitalizations or
similar events) to Xxxxxxxx Consulting LLP (now know
as Accenture LLP) pursuant to the terms of that
certain Warrant Agreement dated as of December, 2000;
and
(xiv) the sale by the Company of Units (each Unit
consisting of a Note, Common Stock Warrants, and
Series C Warrants), including (a) the issuance of
shares of Series C Preferred Stock upon the exercise
of the Series C Warrants, (b) the issuance of shares
of Common Stock upon the
20
exercise of the Common Stock Warrants, and (c) Series
C Warrants issued as payment of interest on the
Notes, pursuant to the Note and Warrant 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; or
(b) the closing of the Initial Public Offering.
3.3. Termination of Series A Stockholders' Rights. The rights
and obligations of the Series A Stockholders under this Section 3 shall
terminate at such time as less than 25% of the aggregate of all
originally issued shares of Series A Stock are outstanding (such number
to be proportionately adjusted in the event of any stock splits, stock
dividends, recapitalizations or similar events occurring on or after
February 1, 2000).
3.4. Termination of Series B Stockholders' Rights. The rights
and obligations of the Series B Stockholders under this Section 3 shall
terminate at such time as less than 25% of the aggregate of all
originally issued shares of Series B Stock are outstanding (such number
to be proportionately adjusted in the event of any stock splits, stock
dividends, recapitalizations or similar events occurring on or after
February 1, 2000).
3.5. Termination of Series C Stockholders' Rights. The rights
and obligations of the Series C Stockholders under this Section 3 shall
terminate at such time as less than 25% of the aggregate of all
originally issued shares of Series C Stock are outstanding (such number
to be proportionately adjusted in the event of any stock splits, stock
dividends, recapitalizations or similar events occurring on or after
the date hereof).
3.6. Termination of Enron's Rights. Enron shall not be
entitled to the rights of each Stockholder pursuant this Section 3 if
that certain Price Posting Agreement dated as of December 4, 2000 (the
"Posting Agreement") shall have been terminated (i) by Enron prior to
the Interface Completion Date (as defined in the Posting Agreement)
pursuant to Section 12(a)(i) through (xi) (except (iii)) of the Posting
Agreement, (ii) by the Company at any time pursuant to Section 12(b) of
the Posting Agreement or (iii) at any time pursuant to Section
12(a)(iii) of the Posting Agreement.
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.
21
5. General.
5.1. 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.
5.2. 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 Stockholder 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.
5.3. 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).
5.4. 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, her or its address as set forth in the
Series A Preferred Stock Purchase Agreement, the Series B Preferred
Stock Purchase Agreement, the Note and Warrant Purchase Agreement or,
in the case of Enron,
Enron Net Works LLC
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Compliance Department
Xxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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.
5.5. 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.
5.6. 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
(i) 85% of the voting power of the Senior Registrable Shares, (ii)
22
75% of the voting power of the Series A Stock, (iii) 75% of the voting
power of the Series B Stock, and (iv) 85% of the voting power of the
Series C Stock and the Series C Warrants (to the extent that the Series
C Warrants are then exercisable), each as then outstanding (assuming
the exercise and conversion into Common Stock of all securities
exercisable therefor or convertible thereinto); provided that:
(a) 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 Stockholders pursuant to Section
5.6(c) does not adversely affect the Company's rights or
obligations set forth in this Agreement);
(b) 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
Stockholders shall affect all Stockholders in the same
fashion;
(c) subsequent purchasers of the Company's capital stock, or
options to purchase such capital stock or securities
convertible into such capital stock, shall constitute
"Stockholders" 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;
(d) 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;
and
(e) any amendment, modification or termination effected in
accordance with this Section 5.6 shall be binding upon all
parties hereto.
Notwithstanding the provisions of Section 5.6(iv) above, unless and
until the Subsequent Closing (as defined in the Note and Warrant Purchase
Agreement) occurs, 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 90% of the voting power of the Series C Stock and
the Series C Warrants (to the extent that the Series C Warrants are then
exercisable).
5.7. 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.
5.8. 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.
23
5.9. 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.
6.0 Subsequent Unit Purchasers. Any future purchaser of Units
in accordance with the terms of the Note and Warrant Purchase Agreement
may become a party to this Agreement after the date hereof without the
consent of the other parties hereto by executing a counterpart
signature page to this Agreement. Each such party shall be deemed a
Unit Purchaser hereunder. SCHEDULE A hereto shall be amended from time
to time to reflect the addition of any Unit Purchasers pursuant to this
Section 6.0.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
24
IN WITNESS WHEREOF, this Amended and Restated Investor Rights Agreement
has been executed by the parties hereto as of the day and year first above
written.
HOUSTONSTREET 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/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President
XXXXXX X. XXX INVESTORS
LIMITED PARTNERSHIP
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Senior Vice President and
Treasurer
TSG EQUITY FUND, L.P.
By: /s/ T. Xxxxxxxxx Xxxxxxxx
-------------------------------------
Name: T. Xxxxxxxxx Xxxxxxxx
Title: President
TSG EQUITY PARTNERS LLC
By: /s/ T. Xxxxxxxxx Xxxxxxxx
-------------------------------------
Name: T. Xxxxxxxxx Xxxxxxxx
Title: President
XXXXXX X. XXXXXXXX
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
25
T. XXXXXXXXX XXXXXXXX
/s/ T. Xxxxxxxxx Xxxxxxxx
----------------------------------------
XXXXX X. XXXXXX XX.
/s/ Xxxxx X. Xxxxxx Xx.
----------------------------------------
ENRON NET WORKS LLC
By: /s/ Xxxxxx Zipper
------------------------------------
Name: Xxxxxx Zipper
Title: Vice President
XXXXXXX XXXXXXXXXX
/s/ Xxxxxxx Xxxxxxxxxx
----------------------------------------
XXXXXXX XXXXXXXX
/s/ Xxxxxxx XxXxxxxx
----------------------------------------
XXXXX XXXXXX
/s/ Xxxxx Xxxxxx
----------------------------------------
XXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxx
----------------------------------------
XXXXXXXX XXXXXX
/s/ Xxxxxxxx Xxxxxx
----------------------------------------
26
XXXXXXXX ENERGY MARKETING &
TRADING COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Director
SAPIENT CORPORATION
By:
-------------------------------------
Name:
Title:
XXXXXXXXX.XXX, INC.
By:
-------------------------------------
Name:
Title:
OMEGA ADVISORS, INC. for and on behalf
of Omega Capital Partners, L.P.,
Omega International Partners, L.P.,
Omega Overseas Partners, Ltd., and
various institutional accounts under
the investment management of Omega
Advisors, Inc.
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Chief Operating Officer
XXXXXXX ASSOCIATES, L.P.
By: /s/ Xxxx Xxxxxx
-------------------------------------
Name:
Title:
KROAD VENTURES, L.P.
By: KRoad Partners, LLC
Its General Partner
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
27
VIVENDI, S.A.
By:
-------------------------------------
Name:
Title:
CONOCO, INC.
By: /s/ E.L. Oshlo
-------------------------------------
Name: E.L. Oshlo
Title: Vice President
MICROARTS CORPORATION AFFILIATES
By:
-------------------------------------
Name:
Title:
28
SCHEDULE A
Xxxxxx X. Xxx Investors Limited Partnership 200,000
Attention: Xxxxx Xxxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
TSG Equity Fund, L.P. 55,217
Attention: Xxxxxx X. Xxxxxxxx
000 Xxxxx Xxxx
Xxxx, XX 00000
TSG Equity Partners LLC 667
Attention: Xxxxxx X. Xxxxxxxx
000 Xxxxx Xxxx
Xxxx, XX 00000
Xxxxxx X. Xxxxxxxx 7,939
c/o TSG Equity Partners LLC
000 Xxxxx Xxxx
Xxxx, XX 00000
T. Xxxxxxxxx Xxxxxxxx 2,844
c/o TSG Equity Partners LLC
000 Xxxxx Xxxx
Xxxx, XX 00000
Xxxxx X. Xxxxxx Xx 60,000
000 Xxxxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000-0000
JUNIOR REGISTRABLE SHARES
BayCorp Holdings, Ltd. 10,000,000
Attn. Xxxxx X. Xxxxxx Xx
000 Xxxxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000-0000
Equiva Trading Company 4,814,815
Attention: Xxxxxxx X. Xxxxxxxx
One Xxxxx Center
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
SENIOR REGISTRABLE SHARES
COMMON STOCK
Enron Net Works LLC 1,781,043
Attention: Compliance Department; Xxxxx Xxxxx
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Enron Net Works LLC 763,305
Attention: Compliance Department; Xxxxx Xxxxx (Contingent Rights to
0000 Xxxxx Xxxxxx Receive Common Stock)
Xxxxxxx, Xxxxx 00000
Enron Net Works LLC 2,544,347
Attention: Compliance Department; Xxxxx Xxxxx (Warrant to Purchase
0000 Xxxxx Xxxxxx Xxxxxx Xxxxx)
Xxxxxxx, Xxxxx 00000
SERIES A CONVERTIBLE PREFERRED STOCK
Xxxxxxx Xxxxxxxxxx 22,222
Xxxxxxx XxXxxxxx 22,223
Xxxxx Xxxxxx 22,222
c/o MicroArts Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxx X. Xxxxxx 26,667
00 Xx. Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
2
Xxxxxxxx Energy Marketing & Trading Company 800,000
Attention: Xxxx Xxxxx
Xxx Xxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxx, Xxxxxxxx 00000
Sapient Corporation 266,667
Attention: Xxxxx Xxxxx
Xxx Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Xxxxxxxxx.xxx, Inc. 66,667
Attention: Xxxx Xxxxxxx
0 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxxxxx 00000
Equiva Trading Company 1,066,667
Attention: Xxxxxxx X. Xxxxxxxx
One Xxxxx Center
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Omega Advisors, Inc. 666,667
Attention: Xxxxx Xxxxx
Wall Street Plaza
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Associates, L.P. 666,667
Attention: Xxxxxxx X. Latina
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Equiva Trading Company 133,334
Attention: Xxxxxx Xxxxxxxxx
One Xxxxx Center - 000 Xxxxxx
Xxxxxxx, Xxxxx 00000
3
SERIES B CONVERTIBLE PREFERRED STOCK
KRoad Ventures, L.P. 416,667
000 Xxxxxxx Xxx.
00xx Xxxxx
Xxx Xxxx, XX 00000
Vivendi, S.A. 166,667
x/x XXxxx Xxxxxxxx, X.X.
000 Xxxxxxx Xxx.
00xx Xxxxx
Xxx Xxxx, XX 00000
Conoco, Inc 500,000
000 X. Xxxxx Xxxxxxx
XX 0000
Xxxxxxx, XX 00000-0000
PURCHASERS OF UNITS
Name and Address Units/Principal No. of Series C No. of Common Stock
---------------- --------------- --------------- -------------------
Amount of Notes Stock Warrants Warrants
--------------- -------------- --------
BayCorp Holdings, Ltd. $8,419,842.00 56,132,280 2,806,614
Attn: Xxxxx X. Xxxxxx, Xx
000 Xxxxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
TSG Equity Fund, L.P. $ 17,763.11 118,421 5,920
Attn: Xxxxxx X. Xxxxxxxx
000 Xxxxx Xxxx
Xxxx, XX 00000
TSG Equity Partners LLC $ 179.43 1,196 60
Attn: Xxxxxx X. Xxxxxxxx
000 Xxxxx Xxxx
Xxxx, XX 00000
Xxxxxx X. Xxxxxxxx $ 21,503.60 10,024 501
c/o TSG Equity Partners LLC
000 Xxxxx Xxxx
Xxxx, XX 00000
T. Xxxxxxxxx Xxxxxxxx $ 553.86 3,692 185
c/o TSG Equity Partners LLC
000 Xxxxx Xxxx
Xxxx, XX 00000
Xxxxx X. Xxxxxx $ 187,500.00 1,250,000 62,500
00 Xx. Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Xxxxxxxx Xxxxxx $ 125,000.00 833,334 41,667
0 Xxxxxx Xxxx
Xxxxx Xxxxxxxxx, XX 00000
KRoad Ventures $ 160,000.00 1,066,667 53,334
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
4
Equiva Trading Company $1,394,354.00 9,295,693 464,785
Attention: Xxxxxxx X. Xxxxxxxx
One Xxxxx Center
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Omega Advisors, Inc. $ 180,000.00 1,200,000 60,000
Attention: Xx Xxxx
Wall Street Plaza
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxxx X. Xxxxxxxxxx $ 83,333.00 555,553 27,778
c/o MicroArts Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Xxxxxxx XxXxxxxx $ 83,334.00 555,560 27,778
c/o MicroArts Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Xxxxx X. Xxxxxx $ 83,333.00 555,553 27,778
c/o MicroArts Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Conoco, Inc. $ 437,819.00 2,918,793 145,940
000 X. Xxxxx Xxxxxxx
XX 0000
Xxxxxxx, XX 00000-0000
Xxxxxx X. Xxx Investors Limited $ 75,000 500,000 25,000
Partnership
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Vivendi, S.A
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
5
