FINAL
EXHIBIT 10.36
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and entered into
as of the 25th day of July, 2002 by and among RED BEND LTD., an Israeli company
(the "COMPANY"), the founders of the Company (the "FOUNDERS") and the persons
and entities identified in Annex 1 attached hereto (together with the Founders,
the "NON-INVESTING SHAREHOLDERS")- And - CARMEL VENTURES FUNDS (collectively the
"CARMEL FUNDS") and the persons and entities identified in Annex 2 attached
hereto (each an "INVESTING SHAREHOLDER" or "INVESTOR" and collectively the
"INVESTORS") (the Non-Investing Shareholders and the Investors shall hereinafter
be referred to as the "SHAREHOLDERS").
WITNESSETH
WHEREAS, the Company and the Shareholders are parties to a certain
Registration Rights Agreement dated October 10, 2000 as amended on August 1,
2001 ("PRIOR REGISTRATION RIGHTS AGREEMENT"); and
WHEREAS, concurrent with this Agreement, the Company and the Investors
are entering into a certain Share Purchase Agreement in relation to which the
parties hereto wish to cancel the Prior Registration Rights Agreement and set
forth herein certain rights to registration of the Company's Series A Preferred
Shares, Series B1 Preferred Shares and Series B Preferred Shares, and shares
that may be issued upon exercise of preemptive and anti-dilution rights with
respect to the above detailed shares, all as shall be converted into Ordinary
Shares (the "SHARES"); and
NOW THEREFORE, in consideration of the mutual covenants and undertakings
herein contained, and other consideration received by the parties, the
sufficiency and adequacy of which is hereby acknowledged, the parties hereby
agree as follows:
1. Nullification of Registration Rights. The parties hereby cancel all
registration rights granted pursuant to the Prior Registration Rights Agreement
which agreement shall be null and void, and substitute same with the rights set
out in this Agreement.
2. Demand Registration. Subject to the terms hereof, and provided any
securities of the Company are publicly traded over the counter or on any
recognized stock exchange in the United States or any other recognized stock
exchange, the holders of the majority of the Shares shall have the right, to
demand that the Company shall effect up to two (2) registrations of their Shares
(a "DEMAND REGISTRATION") (provided that no more than one request may be made in
any six-month period), provided that (i) such demand is not made
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before termination of six (6) months from the first date the Company's shares
are registered for trade as aforesaid and not following five (5) years from such
date, and (ii) the shares that are registered have a total market value of at
least three million United States dollars ($3,000,000) under the United States
Securities Act of 1933, as amended (the "SECURITIES ACT"), or other applicable
law of all or part of the Shares.
In this section 2 "the holders of majority of the Shares" shall mean only
holders of Preferred B Shares and Preferred B1 Shares in the share capital of
the Company, which were converted into Ordinary Shares and shall exclude holders
of Preferred A Shares of the Company.
3. Piggyback Registrations
3.1 Whenever the Company or any of its affiliates proposes to
register any of its securities under the Securities Act or other applicable law
and the registration form to be used is suitable for the registration of the
Shares (a "PIGGYBACK REGISTRATION") (it being understood that Form S-8 and Form
F-4 may not be used for such purposes), the Company will give written notice to
the holders of Shares (each a "HOLDER" and collectively, the "HOLDERS") of its
intention to effect such a registration (which notice shall describe the
proposed registration and distribution, including those jurisdictions where
registration under the securities or blue sky laws in intended) and will include
in such registration all Shares with respect to which the Company has received
written requests for inclusions therein within thirty (30) days after the
Company gives such notice. Such notice will be delivered to the Holders at least
thirty (30) days prior to the initial filing of a registration statement with
the Securities and Exchange Commission or other similar regulatory agency.
The Holders shall have the right to exercise their Piggyback
Registration rights pursuant to the provisions of this Section on any number of
occasions that the Company shall determine to file a Registration Statement.
3.2 If a Piggyback Registration is an underwritten offering of
the Company's securities and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be included
in such registration exceeds the number that can be sold in such offering
without adversely affecting such underwriters' ability to effect an orderly
distribution of such securities, the Company will be entitled to exclude from
such registration some or all of the Shares, provided, however, that the
quantity of Securities that shall eventually participate in such offering shall
be determined in a pro rata basis among all Holders that indicated their
intention to participate in such offering.
3.3 Whenever the Company becomes eligible to file an F-3 "Shelf"
Registration, the Company shall, at the request of the holders of at the
majority of the Shares, file a shelf registration with the Securities and
Exchange Commission, and the Company will make reasonable efforts to maintain
the effectiveness of such registration statement and will take all reasonable
action necessary to allow its continued use by the holders of the Shares,
including the timely filing of all required reports under the Securities Act,
for a period of one year. The Company will within twenty (20) days after receipt
of any such request give written notice of the proposed registration to all
Holders, and include in such registration all the Shares held by all such
Holders who wish to participate in such registration and provide the Company
with written requests for inclusion therein within 15 days after the receipt of
the Company's notice. Such Holders shall be entitled to six Shelf Registrations
subject to the
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terms hereof.
3.4 Without derogating from the rights of the Holders, the
Founders shall be entitled to participate in any registration made under this
Section 3, pro rata to their respective holdings, aggregately, in an amount
equal to up to one-fifth of the total number of Shares registered in any such
registration, subject always to the managing underwriter's limitation on a
pro-rata basis with the other Holders.
4. Registration Procedures
4.1 Whenever the Holders have requested that any Shares be
registered pursuant to this Agreement, the Company will use its best efforts to
effect the registration with the proper authorities, to cause such registration
statement to become effective as soon as practicable and keep such registration
statement effective for a period of 120 (one hundred and twenty) days or until
the Holder(s) whose Shares are included in the registration statement have
completed the distribution, whichever first occurs, provided however that in the
event of registration of Shares on form F-3 which are intended to be offered on
a continuous or delayed basis, such 120 days period shall be extended, if
necessary, to keep the registration statement effective until all such Shares
are sold. In connection therewith, the Company will make available for
inspection by any selling Holder, and any attorney, accountant, or any other
agent retained by such Holder, all pertinent financial and other records, other
pertinent corporate documents and properties of the Company, and cause the
Company's respective officers, directors, and employees to supply all
information reasonably requested by such Holder, attorney, accountant, or agent
in connection with such registration statement.
The Company shall use its best efforts to register or qualify any
Shares ("QUALIFIED SHARES") included in a Registration Statement above under
state "blue sky" or similar securities laws in such jurisdictions as the selling
Holders reasonably request and to take such other action as may be reasonably
necessary to enable the selling Holders to sell their qualified Shares in the
jurisdictions where such registration or qualification was made; provided that
the Company will not be required to qualify to do business in any jurisdiction
in which it is not so qualified or to execute a general consent to service of
process in any jurisdiction in which it has not executed such a consent.
No later than ten (10) days after the receipt of a Demand
Registration request or an F-3 Registration request, the Company shall notify,
in writing, all Holders who have not joined in such request of the proposed
filing; provided, however, that in the case of a Demand Registration request,
only the Holders of the Series B1 Preferred Shares and of Series B Preferred
Shares shall be so notified. Such Holders, if they desire to sell any qualified
securities owned by or issued to them, may elect, by notice given in writing to
the Company no later than fifteen (15) days after receipt of such notice from
the Company, to have all or any portion of their owned or issued qualified
Shares included in the Registration Statement.
4.2 No Holder may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's securities on the
basis provided in any customary underwriting arrangements; and (ii) completes
and executes all questionnaires,
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powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.
4.3 Commencing with the filing of any Registration Statement and
continuing until the termination of the effectiveness thereof, the Company shall
provide to the selling Holders without charge a reasonable number of copies of
the Prospectus (including any preliminary Prospectus prepared for circulation to
prospective purchasers of qualified Shares) included in the Registration
Statement and any amendment or supplement thereto. The Company consents to the
use of any such Prospectus or amendment or supplement thereto in connection with
the offering and sale of the qualified Shares covered thereby. In addition
during such period, the Company shall provide the selling Holders, without
charge, with (i) one (1) copy of the Registration Statement and any
post-effective amendment thereto (including financial statements and schedules
and, to the extent requested by the Selling Holders in writing, the exhibits
thereto), and (ii) to the extent requested by the selling Holders, all reports
and filing made by the Company pursuant to the Securities Exchange Act of 1934.
The Company will promptly notify each selling Holder of the
occurrence of any event which renders any Prospectus then being circulated among
prospective purchasers misleading because such Prospectus contains an untrue
statement of a material fact or omits to state a material fact necessary to make
the statements made, in light of the circumstances in which they were made, not
misleading, and the Company will, as promptly as possible, amend the Prospectus
so that it does not contain any material misstatements or omissions and deliver
the number of copies of such amendments to each selling Holder as each selling
Holder may require.
5. Registration Expenses. The Company will be responsible for all
registration expenses incurred in connection with the transactions described in
this Agreement. Registration expenses include all expenses incident to the
Company's or its affiliates' performance of or compliance with this Agreement
with respect to any Demand Registration (whether or not the registration has
become effective or is counted as a Demand Registration, provided that the
Company shall not have to pay the expenses of a registration proceeding
withdrawn by the Holders of the Shares) or Piggyback Registration, including
without limitation expenses incurred in connection with the preparation of a
prospectus and the expense of one legal counsel to the selling Holders (which
may be the same counsel as legal counsel to the Company). Notwithstanding the
foregoing, however, all underwriters' discounts and commissions in respect of
the sale of Shares will be paid by the selling Holders of such Shares, pro-rata
in accordance with the number of Shares sold in the offering, and such selling
Holders will bear the expense of their legal counsel, if separate from the
Company's legal counsel.
6. Rule 144. With a view to making available the benefits of Rule 144
under the Securities Act (or similar rule then in effect) available to the
Holders, after the initial public offering ("IPO") of any securities of the
Company, the Company will:
6.1 Make and keep available adequate current public information
with respect to the Company within the meaning of Rule 144(c) under the
Securities Act (or similar rule then in effect);
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6.2 Furnish to any Holder forthwith upon request: (i) a written
statement by the Company as to its compliance with the informational
requirements of Rule 144(c) (or similar rule then in effect) or (ii) a copy of
the most recent annual or quarterly report of the Company; and
6.3 Comply with all other necessary filings and other
requirements so as to enable each of the Holders and any transferee thereof to
sell Shares under Rule 144 under the Securities Act (or similar rule then in
effect).
7. Indemnification and Contribution
7.1 The Company shall indemnify and hold harmless each Holder,
each officer and director of each Holder, legal counsel and independent
accountants and each person that "Controls" a Holder within the meaning of the
Securities Act, from and against any and all losses, claims, damages,
liabilities, legal actions and charges, joint or several ("CLAIM(S)"), to which
any of them may be subject under the Securities Act or any other statute
(whether U.S., Israeli or other) or at common law, insofar as such Claims arise
out of, are based upon, or are in connection with: (i) any untrue statement of
an material fact contained in any registration statement or prospectus under
which such shares were sold, or (ii) any omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or (iii) any other violation by the Company of the Securities
Act or any state or foreign jurisdiction securities laws in connection with each
such registration to the extent that it arises out of or based on any untrue
statement (or alleged untrue statement of a material fact) contained in any such
registration statement, prospectus, offering circular or other document, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
shall reimburse such person entitled to indemnification for any legal or other
expenses reasonably incurred by such person in connection with investigating or
defending any such Claim; provided, however, that the Company will not be liable
to any such person in any such case to the extent that any such Claim arose out
of or is based upon any untrue statement or omission made in such registration
statement or prospectus in reliance upon and in conformity with written
information furnished to the Company by such persons and/or any person acting on
its behalf for use in such registration statement or prospectus.
7.2 Each Holder whose Shares are included in a registration
hereunder will severally indemnify and hold harmless the Company, its officers,
directors, legal counsel and independent accountants and each other Holder from
and against any and all Claims, to which any of them may be subject under the
Securities Act or any other statute (whether U.S. or Israeli) or at common law,
insofar as such Claims arise out of, are based upon, or are in connection with:
(i) any untrue statement of any material fact contained in any registration
statement or prospectus under which Shares were sold, or (ii) any omission to
state therein a material fact required to be stated therein or necessary to make
the statements not misleading, or (iii) any other violation by the Holder or by
the Company of the Securities Act or any state or foreign jurisdiction
securities laws (or the securities laws of relevant jurisdictions) in connection
with any registration, to the extent that it arises out or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the
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statements therein not misleading and shall reimburse each such persons entitled
to indemnification for any legal or other expenses reasonably incurred by such
person in connection with investigating or defending any such Claim; provided,
however, that the aforesaid indemnity will only apply where such Claim or
violation results from and/or in reliance upon and in conformity with written
information furnished to the Company by such Holder and/or any person acting on
its or their behalf for use in such registration statement or prospectus; and
provided further that the aggregate liability of each Holder shall be limited to
the gross proceeds to each Holder from the offering. Further, the liability of
each Holder under this Section shall be several and not joint.
7.3 The parties agree to promptly notify each other of the
commencement of any litigation or proceedings against the Company or any of its
officers or directors in connection with the sale of any Shares or any
preliminary prospectus or registration statement relating to any sale or any
Shares, or of any other litigation or proceedings to which this Agreement is
applicable of which they became aware, and allow the indemnifying party to lead
the defense and/or response procedure with respect to such claim.
Notwithstanding the foregoing, the Indemnifying Party shall not be obligated to
assume the defense for matters as to which there is a conflict of interest or
there are separate and different defenses, and in such event, the Indemnify
party shall be entitled to conduct such defense and to appoint its own counsel
for such purposes, at the expense of the Indemnifying Party. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party (whose consent shall not be unreasonably
withheld), consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.
8. The indemnification provisions set forth in Section 7 above shall not
apply to amounts paid in settlement of any such claims, if such settlement is
effected without the consent of the indemnifying party.
9. Priority. In the case of Underwriter cut-backs in an IPO, the Holder
shall have a priority over the other shareholders of the Company, subject to
Section 3.4 hereof.
10. Public Information. At any time and from time to time after the
earlier of the close of business on such date as (a) a registration statement
filed by the Company under the Securities Act becomes effective, (b) the Company
registers a class of securities under Section 12 of the United States Securities
Exchange Act of 1934, as amended, or any federal statute or code which is a
successor thereto (the "EXCHANGE ACT"), or (c) the Company issues an offering
circular meeting the requirements of Regulation A under the Securities Act, the
Company shall undertake to make publicly available and available to the Holders
pursuant to Rule 144, such information as is necessary to enable the Holders to
make sales of the Shares pursuant to that Rule. The Company shall comply with
the current public information requirements of Rule 144 and shall furnish
thereafter to any Holder, upon request, a written statement executed by the
Company as to the steps it has taken to so comply.
11. Market Stand-off Agreement. If requested by the Company or by the
underwriter(s) of securities of the Company, any shareholder of the Company
shall not sell or otherwise transfer or dispose of any securities of the Company
held by such shareholder (other than those included, if at all, in the
registration) during a period of one hundred and
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eighty (180) days following the effective date of the registration statement of
the Company.
12. No Inconsistent Agreements. Prior to the IPO of its shares, the
Company will not hereafter enter into any agreement with respect to its
securities, which is inconsistent with the rights granted to the Investors
hereunder unless approved in writing by the majority of the Investors.
13. Miscellaneous.
13.1 Further Assurances. Each of the parties hereto shall perform such
further acts and execute such further documents as may reasonably be necessary
to carry out and give full effect to the provisions of this Agreement and the
intentions of the parties as reflected thereby.
13.2 Governing Law; Jurisdiction. This Agreement shall be exclusively
governed by and construed according to the laws of the State of Israel, without
regard to the conflict of laws provisions thereof. Any dispute arising under or
in relation to this Agreement shall be resolved exclusively in the competent
court for Tel Aviv-Jaffa district, and each of the parties hereby submits
irrevocably to the jurisdiction of such court.
13.3 Successors and Assigns; Assignment. Except as otherwise expressly
limited herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors, and administrators of
the parties hereto. The rights to demand that the Company register securities
and the right to join a registration granted herein in relation to any Company
securities, may be freely transferred and assigned by a Holder to a transferee
which purchased such securities from such Holder, provided that (i) the Company
is given written notice of said transfer and the assignment prior to the
exercise of such registration rights, stating the name and address of the
transferee and identifying the securities with respect to which such
registration rights are being assigned; and (ii) such transferee shall assume in
a written instrument to the Company all the transferors obligations hereunder
with respect to the securities transferred, and shall deliver to the Company
such instrument and a copy of this Agreement duly signed by such transferee.
13.4 Entire Agreement; Amendment and Waiver. This Agreement and the
Annexes hereto constitute the full and entire understanding and agreement
between the parties with regard to the subject matters hereof and thereof. Any
term of this Agreement may be amended and the observance of any term hereof may
be waived (either prospectively or retroactively and either generally or in a
particular instance) only with the written consent of the Company and the
majority of the Holders.
13.5 Public Offerings outside the U.S.A. If relevant, and to the extent
possible, the provisions of this Agreement shall apply, mutatis mutandis, to any
registration of securities of the Company made in any other country outside the
U.S.A.
13.6 Notices, etc. All notices and other communications made pursuant to
this Agreement shall be in writing, addressed to each relevant party at its
address set forth in Annex 1 hereto, and shall be conclusively deemed to have
been duly given if: (i) delivered by hand, on the next Business Day (as
hereafter defined); or (ii) in the case of delivery by Federal Express or
similar internationally recognized overnight courier, freight prepaid, four
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(4) Business Days after delivery; or (iii) in the case of a notice given by
facsimile transmission, on the next Business Day after delivery if delivered by
confirmed facsimile transmission. For purposes hereof, a "Business Day" shall
mean a day when banks are open for business in the country in which the
receiving party is located. A copy of all notices or communications made to any
Investor shall also be sent to:
BACH, ARAD, XXXXXX & CO.
Microdaf House
0 Xxxxxxxx Xxxx
Xxx-Xxxx 00000, Xxxxxx
Attention: Xxxx Xxxx, Adv.
Fax: 000 (00) 000 0000
A copy of all notices or communications made to the Company shall also be sent
to:
Eitan, Pearl, Xxxxxx & Xxxxx-Xxxxx
0 Xxxxxxx Xxxxxx
0 Gav-Yam Center
X.X.X. 00000
Xxxxxxxx, Xxxxxx
Attention: Adv. Xxxxx Xxxxxx
Fax: (00) 0000000
A party may change or supplement the addresses given above, or designate
additional addresses for the purpose of this Section 13.6 by giving the other
party written notice of the new address in the manner set forth above.
13.7 Delays or Omissions. No delay or omission to exercise any right,
power, or remedy accruing to any party upon any breach or default under this
Agreement, shall be deemed a waiver of any other breach or default therefore or
thereafter occurring. Any waiver, permit, consent, or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any of the parties, shall be
cumulative and not alternative.
13.8 Severability. If any provision of this Agreement is held by a court
of competent jurisdiction to be unenforceable under applicable law, then such
provision shall be excluded from this Agreement and the remainder of this
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms; provided, however, that in such
event this Agreement shall be interpreted so as to give effect, to the greatest
extent consistent with and permitted by applicable law, to the meaning and
intention of the excluded provision as determined by such court of competent
jurisdiction.
13.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and enforceable against
the parties actually executing such counterpart, and all of which together shall
constitute one and the same instrument.
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[Signature Page to Follow]
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[Signature Page to Amended and Restated Registration Rights Agreement]
IN WITNESS WHEREOF the parties have signed this Agreement as of the date
first hereinabove set forth.
--------------------------------------
Red Bend Ltd.
By:
----------------------------------
Title:
-------------------------------
/s/ XXXXXXX XXXXXX /s/ XXXXXXX XXXXXX
-------------------------------------- -------------------------------------
Carmel Software Fund (Israel) LP Carmel Software Fund (Cayman) LP
By: Carmel V.C. Limited By: Carmel Software Limited
By: Carmel Software L.P.
By: Xxxxxxx Xxxxxx By: Xxxxxxx Xxxxxx
---------------------------------- ---------------------------------
Title: Title:
------------------------------- ------------------------------
/s/ XXXXXXX XXXXXX /s/ XXXXXXX XXXXXX
-------------------------------------- -------------------------------------
Carmel Software Fund (Delaware) LP Carmel VC Ltd. (for Siemens Venture
Capital GmbH)
By: Carmel Software Limited By: Carmel Software Limited
By: Carmel Software L.P. By: Carmel Software L.P.
By: Xxxxxxx Xxxxxx By: Xxxxxxx Xxxxxx
---------------------------------- ---------------------------------
Title: Title:
------------------------------- ------------------------------
/s/ XXXXXXX XXXXXX
-------------------------------------- -------------------------------------
Carmel Software Fund GbR
By: Carmel Software Limited
By: Carmel Software L.P.
By: Xxxxxxx Xxxxxx
----------------------------------
Title:
-------------------------------
/s/ XXX XXXXXX
-------------------------------------- -------------------------------------
XXXX XXXXX Backweb Technologies Ltd.
By: Xxx Xxxxxx
---------------------------------
Title: CEO
------------------------------
-------------------------------------- -------------------------------------
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-------------------------------------- -------------------------------------
FBR Infinity II Ventures (Israel) LP FBR Infinity II Ventures LP
By: By:
---------------------------------- ---------------------------------
Title: Title:
------------------------------- ------------------------------
--------------------------------------
XXXXXX XXXXX XXXXX B.V.
By:
---------------------------------
Title:
------------------------------
--------------------------------------
XXXX XXXXX Jerusalem Hi-Tech Founders Ltd.
By:
---------------------------------
Title:
------------------------------
00
XXXXX 0- XXX XXXXXXXXX XXXXXXXXXXXX
XXX INVESTING SHAREHOLDER Address
------------------------- -------
Xxxxxx Xxxxx 58 Bialik St., Ramat Hasharon
Xxxx Xxxxx 00 Xxx-Xxx Xx., Xxxxxxxxx
Xxxxx B.V. x/x Xxx, Xxxx Xxxxxxxxx, 00 Xxxxxx Xx., Xxxxxxx
Xxxxxxxxx Hi-Tech Founders Ltd. 00 Xxx-Xxxxxx Xx., Xxxx Xxxxx, Xxxxxxxxx
Backweb Technologies Ltd. 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxx, XX
00000, XXX
Xxxx Xxxxx x/x Xxxx Xxxxxxxx Xxxxxxxxxx, Xxxxxxxxxxxxxx 0,
X-00000 Xxxxxx, Xxxxxxx
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ANNEX 2- INVESTING SHAREHOLDERS
INVESTING SHAREHOLDER ADDRESS
--------------------- -------
Carmel Software Fund (Israel) LP Xxxxx Xxxxx, 00 Xxxxxxx Xxx.,
Xxxxxxxxx 00000
Carmel Software Fund (Delaware) LP
Carmel Software Fund GbR
Carmel Software Fund (Cayman) LP
Carmel VC Ltd. (for Siemens Venture
Capital GmbH)
FBR Infinity II Ventures (Israel) LP 3 Azrieli Center, 00xx Xxxxx, Xxx-Xxxx
00000, Xxxxxx
FBR Infinity II Ventures LP
