EXHIBIT 10.8
REGISTRATION RIGHTS AGREEMENT
March 19, 1996
To each of the several Purchasers named in
Schedule I to the Series A Convertible Preferred
Stock Purchase Agreement of even date herewith
(each a "Purchaser" and, collectively, the
"Purchasers")
Ladies and Gentlemen:
This will confirm that in consideration of your agreement on the date
hereof to purchase an aggregate of 804 shares (the "Preferred Shares") of Series
A Convertible Preferred Stock, $0.01 par value ("Preferred Stock"), of Teledata
Solutions, Inc., an Illinois corporation (the "Company"), pursuant to the Series
A Convertible Preferred Stock Purchase Agreement of even date herewith (the
"Purchase Agreement") between the Company and you and as an inducement to you to
consummate the transactions contemplated by the Purchase Agreement, the Company
covenants and agrees with each of you as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"Common Stock" shall mean the Common Stock, $no par value, of the
Company, as constituted as of the date of this Agreement.
"Conversion Shares" shall mean shares of Common Stock issued upon
conversion of the Preferred Shares.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"Registration Expenses" shall mean the expenses so described in
Section 8.
"Restricted Stock" shall mean the Conversion Shares, excluding
Conversion Shares which have been (a) registered under the Securities Act
pursuant to an effective registration statement filed thereunder and
disposed of in accordance with the registration statement covering them or
(b) publicly sold pursuant to Rule 144 under the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Selling Expenses" shall mean the expenses so described in Section 8.
2. Restrictive Legend. Each certificate representing Preferred Shares
or Conversion Shares shall, except as otherwise provided in this Section 2 or in
Section 3, be stamped or otherwise imprinted with a legend substantially in the
following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND
ALL SUCH APPLICABLE LAWS OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE."
A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Company (it being agreed that Xxxxx, Xxxxxxx & Xxxxxxxxx
shall be satisfactory) the securities represented thereby may be publicly sold
without registration under the Securities Act and any applicable state
securities laws.
3. Notice of Proposed Transfer. Prior to any proposed transfer of any
Preferred Shares or Conversion Shares (other than under the circumstances
described in Sections 4, 5 or 6), the holder thereof shall give written notice
to the Company of its intention to effect such transfer. Each such notice shall
describe the manner of the proposed transfer and, if requested by the Company,
shall be accompanied by an opinion of counsel satisfactory to the Company (it
being agreed that Xxxxx, Xxxxxxx & Xxxxxxxxx shall be satisfactory) to the
effect that the proposed transfer may be effected without registration under the
Securities Act and any applicable state securities laws, whereupon the holder of
such stock shall be entitled to transfer such stock in accordance with the terms
of its notice; provided, however, that no such opinion of counsel shall be
required for a transfer to one or more partners of the transferor (in the case
of a transferor that is a partnership) or to an affiliated corporation (in the
case of a transferor that is a corporation). Each certificate for Preferred
Shares or Conversion Shares transferred as above provided shall bear the legend
set forth in Section 2, except that such certificate shall not bear such legend
if (i) such transfer is in accordance with the provisions of Rule 144 (or any
other rule permitting public sale without registration under the Securities Act)
or (ii) the opinion of counsel referred to above is to the further effect that
the transferee and any subsequent transferee (other than an affiliate of the
Company) would be entitled to transfer such securities in a public sale without
registration under the Securities Act. The restrictions provided for in this
Section 3 shall not apply to securities which are not required to bear the
legend prescribed by Section 2 in accordance with the provisions of that
Section.
4. Required Registration. (a) At any time after the earliest of (i)
six months after any registration statement covering a public offering of
securities of the Company under the Securities Act shall have become effective,
(ii) six months after the Company shall have become
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a reporting company under Section 12 of the Exchange Act, and (iii) the fifth
anniversary of the date of this Agreement, the holders of Restricted Stock
constituting at least 40% of the total shares of Restricted Stock then
outstanding may request the Company to register under the Securities Act all or
any portion of the shares of Restricted Stock held by such requesting holder or
holders for sale in the manner specified in such notice, provided that the
shares of Restricted Stock for which registration has been requested shall
constitute at least 20% of the total shares of Restricted Stock originally
issued if such holder or holders shall request the registration of less than all
shares of Restricted Stock then held by such holder or holders (or any lesser
percentage if the reasonably anticipated aggregate price to the public of such
public offering would exceed $5,000,000). For purposes of this Section 4 and
Sections 5, 6, 13(a) and 13(d), the term "Restricted Stock" shall be deemed to
include the number of shares of Restricted Stock which would be issuable to a
holder of Preferred Shares upon conversion of all Preferred Shares held by such
holder at such time, provided, however, that the only securities which the
Company shall be required to register pursuant hereto shall be shares of Common
Stock, and provided, further, however, that, in any underwritten public offering
contemplated by this Section 4 or Sections 5 and 6, the holders of Preferred
Shares shall be entitled to sell such Preferred Shares to the underwriters for
conversion and sale of the shares of Common Stock issued upon conversion
thereof. Notwithstanding anything to the contrary contained herein, no request
may be made under this Section 4 within 120 days after the effective date of a
registration statement filed by the Company covering a firm commitment
underwritten public offering in which the holders of Restricted Stock shall have
been entitled to join pursuant to Sections 5 or 6 and in which there shall have
been effectively registered all shares of Restricted Stock as to which
registration shall have been requested.
(b) Following receipt of any notice under this Section 4, the Company
shall immediately notify all holders of Restricted Stock from whom notice has
not been received and shall use its best efforts to register under the
Securities Act, for public sale in accordance with the method of disposition
specified in such notice from requesting holders, the number of shares of
Restricted Stock specified in such notice (and in all notices received by the
Company from other holders within 30 days after the giving of such notice by the
Company). If such method of disposition shall be an underwritten public
offering, the holders of a majority of the shares of Restricted Stock to be sold
in such offering may designate the managing underwriter of such offering,
subject to the approval of the Company, which approval shall not be unreasonably
withheld or delayed. The Company shall be obligated to register Restricted
Stock pursuant to this Section 4 on two occasions only, provided, however, that
such obligation shall be deemed satisfied only when a registration statement
covering all shares of Restricted Stock specified in notices received as
aforesaid, for sale in accordance with the method of disposition specified by
the requesting holders, shall have become effective and, if such method of
disposition is a firm commitment underwritten public offering, all such shares
shall have been sold pursuant thereto.
(c) The Company shall be entitled to include in any registration
statement referred to in this Section 4, for sale in accordance with the method
of disposition specified by the requesting holders, shares of Common Stock to be
sold by the Company for its own account, except as and to the extent that, in
the opinion of the managing underwriter (if such method of disposition shall be
an underwritten public offering), such inclusion would adversely affect the
marketing of the Restricted Stock to be sold. Except for registration
statements on Form X-0, X-0
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or any successor thereto, the Company will not file with the Commission any
other registration statement with respect to its Common Stock, whether for its
own account or that of other stockholders, from the date of receipt of a notice
from requesting holders pursuant to this Section 4 until the completion of the
period of distribution of the registration contemplated thereby.
5. Incidental Registration. If the Company at any time (other than
pursuant to Section 4 or Section 6) proposes to register any of its securities
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Forms X-0, X-0 or another form not available for
registering the Restricted Stock for sale to the public), each such time it will
give written notice to all holders of outstanding Restricted Stock of its
intention so to do. Upon the written request of any such holder, received by
the Company within 30 days after the giving of any such notice by the Company,
to register any of its Restricted Stock, the Company will use its best efforts
to cause the Restricted Stock as to which registration shall have been so
requested to be included in the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent requisite to
permit the sale or other disposition by the holder of such Restricted Stock so
registered. In the event that any registration pursuant to this Section 5 shall
be, in whole or in part, an underwritten public offering of Common Stock, the
number of shares of Restricted Stock to be included in such an underwriting may
be reduced (pro rata among the requesting holders based upon the number of
shares of Restricted Stock owned by such holders) if and to the extent that the
managing underwriter shall be of the opinion that such inclusion would adversely
affect the marketing of the securities to be sold by the Company therein,
provided, however, that such number of shares of Restricted Stock shall not be
reduced if any shares are to be included in such underwriting for the account of
any person other than the Company or requesting holders of Restricted Stock, and
provided, further, however, that in no event may less than one-third of the
total number of shares of Common Stock to be included in such underwriting be
made available for shares of Restricted Stock. Notwithstanding the foregoing
provisions, the Company may withdraw any registration statement referred to in
this Section 5 without thereby incurring any liability to the holders of
Restricted Stock.
6. Registration on Form S-3. If at any time (i) a holder or holders
of Preferred Shares or Restricted Stock request that the Company file a
registration statement on Form S-3 or any successor thereto for a public
offering of all or any portion of the shares of Restricted Stock held by such
requesting holder or holders, the reasonably anticipated aggregate price to the
public of which would exceed $1,000,000, and (ii) the Company is a registrant
entitled to use Form S-3 or any successor thereto to register such shares, then
the Company shall use its best efforts to register under the Securities Act on
Form S-3 or any successor thereto, for public sale in accordance with the method
of disposition specified in such notice, the number of shares of Restricted
Stock specified in such notice. Whenever the Company is required by this
Section 6 to use its best efforts to effect the registration of Restricted
Stock, each of the procedures and requirements of Section 4 (including but not
limited to the requirement that the Company notify all holders of Restricted
Stock from whom notice has not been received and provide them with the
opportunity to participate in the offering) shall apply to such registration,
provided, however, that there shall be no limitation on the number of
registrations on Form S-3 which may be requested and obtained under this Section
6, and provided, further, however, that
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the requirements contained in the first sentence of Section 4(a) shall not apply
to any, registration on Form S-3 which may be requested and obtained under this
Section 6.
7. Registration Procedures. If and whenever the Company is required
by the provisions of Sections 4, 5 or 6 to use its best efforts to effect the
registration of any shares of Restricted Stock under the Securities Act, the
Company will, as expeditiously as possible:
(a) prepare and file with the Commission a registration statement
(which, in the case of an underwritten public offering pursuant to Section 4,
shall be on Form S-1 or other form of general applicability satisfactory to the
managing underwriter selected as therein provided) with respect to such
securities and use its best efforts to cause such registration statement to
become and remain effective for the period of the distribution contemplated
thereby (determined as hereinafter provided);
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in paragraph (a) above and comply with the provisions of
the Securities Act with respect to the disposition of all Restricted Stock
covered by such registration statement in accordance with the sellers' intended
method of disposition set forth in such registration statement for such period;
(c) furnish to each seller of Restricted Stock and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale or other
disposition of the Restricted Stock covered by such registration statement;
(d) use its best efforts to register or qualify the Restricted Stock
covered by such registration statement under the securities or "blue sky" laws
of such jurisdictions as the sellers of Restricted Stock or, in the case of an
underwritten public offering, the managing underwriter reasonably shall request,
provided, however, that the Company shall not for any such purpose be required
to qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service of
process in any such jurisdiction;
(e) use its best efforts to list the Restricted Stock covered by such
registration statement with any securities exchange on which the Common Stock of
the Company is then listed;
(f) immediately notify each seller of Restricted Stock and each
underwriter under such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the prospectus contained in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;
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(g) if the offering is underwritten and at the request of any seller
of Restricted Stock, use its best efforts to furnish on the date that Restricted
Stock is delivered to the underwriters for sale pursuant to such registration:
(i) an opinion dated such date of counsel representing the Company for the
purposes of such registration, addressed to the underwriters and to such seller,
stating that such registration statement has become effective under the
Securities Act and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the Securities
Act, (B) the registration statement, the related prospectus and each amendment
or supplement thereof comply as to form in all material respects with the
requirements of the Securities Act (except that such counsel need not express
any opinion as to financial statements contained therein) and (C) to such other
effects as reasonably may be requested by counsel for the underwriters or by
such seller or its counsel and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters reasonably may request;
and
(h) make available for inspection by each seller of Restricted Stock,
any underwriter participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by such seller
or underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such registration
statement.
For purposes of Section 7(a) and 7(b) and of Section 4(c), the period
of distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Restricted Stock covered thereby and 120 days
after the effective date thereof.
In connection with each registration hereunder, the sellers of
Restricted Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as reasonably shall
be necessary in order to assure compliance with federal and applicable state
securities laws.
In connection with each registration pursuant to Sections 4, 5 or 6
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an
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arrangement between such underwriter and companies of the Company's size and
investment stature.
8. Expenses. All expenses incurred by the Company in complying with
Sections 4, 5 and 6, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Company, fees and expenses (including counsel fees)
incurred in connection with complying with state securities or "blue sky" laws,
fees of the National Association of Securities Dealers, Inc., transfer taxes,
fees of transfer agents and registrars, costs of insurance and reasonable fees
and disbursements of one counsel for the sellers of Restricted Stock, but
excluding any Selling Expenses, are called "Registration Expenses". All
underwriting discounts and selling commissions applicable to the sale of
Restricted Stock are called "Selling Expenses."
The Company will pay all Registration Expenses in connection with each
registration statement under Sections 4, 5 or 6. All Selling Expenses in
connection with each registration statement under Sections 4, 5 or 6 shall be
borne by the participating sellers in proportion to the number of shares sold by
each, or by such participating sellers other than the Company (except to the
extent the Company shall be a seller) as they may agree.
9. Indemnification and Contribution. (a) In the event of a
registration of any of the Restricted Stock under the Securities Act pursuant to
Sections 4, 5 or 6, the Company will indemnify and hold harmless each seller of
such Restricted Stock thereunder, each underwriter of such Restricted Stock
thereunder and each other person, if any, who controls such seller or
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such seller,
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Restricted Stock was registered under the Securities Act
pursuant to Sections 4, 5 or 6, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each such seller, each such underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action, provided, however, that the Company will not be liable in
any such case if and to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished by any such seller, any such underwriter or any such controlling
person in writing specifically for use in such registration statement or
prospectus.
(b) In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Sections 4, 5 or 6, each seller of such
Restricted Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter
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and each person who controls any underwriter within the meaning of the
Securities Act, against all losses, claims, damages or liabilities, joint or
several, to which the Company or such officer, director, underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement under
which such Restricted Stock was registered under the Securities Act pursuant to
Sections 4, 5 or 6, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the Company and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action, provided, however, that such seller will be liable
hereunder in any such case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such, furnished
in writing to the Company by such seller specifically for use in such
registration statement or prospectus, and provided, further, however, that the
liability of each seller hereunder shall be limited to the proportion of any
such loss, claim, damage, liability or expense which is equal to the proportion
that the public offering price of the shares sold by such seller under such
registration statement bears to the total public offering price of all
securities sold thereunder, but not in any event to exceed the proceeds received
by such seller from the sale of Restricted Stock covered by such registration
statement.
(c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 9 and shall only relieve it
from any liability which it may have to such indemnified party under this
Section 9 if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 9 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected, provided,
however, that, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, the indemnified party shall have the
right to select a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such
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action, with the expenses and fees of such separate counsel and other expenses
related to such participation to be reimbursed by the indemnifying party as
incurred.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Restricted Stock exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 9 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 9 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling holder or any such controlling
person in circumstances for which indemnification is provided under this Section
9; then, and in each such case, the Company and such holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such holder
is responsible for the portion represented by the percentage that the public
offering price of its Restricted Stock offered by the registration statement
bears to the public offering price of all securities offered by such
registration statement, and the Company is responsible for the remaining
portion; provided, however, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the public offering price of all
such Restricted Stock offered by it pursuant to such registration statement; and
(B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any person or entity who was not guilty of such fraudulent
misrepresentation.
10. Chances in Common Stock or Preferred Stock. If, and as often as,
there is any, change in the Common Stock or the Preferred Stock by way of a
stock split, stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustment shall be made in the provisions hereof so that the
rights and privileges granted hereby shall continue with respect to the Common
Stock or the Preferred Stock as so changed.
11. Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Restricted Stock to the public without registration, at all
times after 90 days after any registration statement covering a public offering
of securities of the Company under the Securities Act shall have become
effective, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;
(b) use its best 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; and
(c) furnish to each holder of Restricted Stock forthwith upon request
a written statement by the Company as to its compliance with the reporting
requirements of such Rule 144
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and of the Securities Act and the Exchange Act, a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents so
filed by the Company as such holder may reasonably request in availing itself of
any rule or regulation of the Commission allowing such holder to sell any
Restricted Stock without registration.
12. Representations and Warranties of the Company. The Company
represents and warrants to you as follows:
(a) The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the Charter or By-laws of the Company or any provision of any
indenture, agreement or other instrument to which it or any or its properties or
assets is bound, conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such indenture, agreement
or other instrument or result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the properties or assets of
the Company.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.
13. Miscellaneous.
(a) All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto (including without
limitation transferees of any Preferred Shares or Restricted Stock), whether so
expressed or not, provided, however, that registration rights conferred herein
on the holders of Preferred Shares or Restricted Stock shall only inure to the
benefit of a transferee of Preferred Shares or Restricted Stock if (i) there is
transferred to such transferee at least 20% of the total shares of Restricted
Stock originally issued pursuant to the Purchase Agreement to the direct or
indirect transferor of such transferee or (ii) such transferee is a partner,
shareholder or affiliate of a party hereto.
(b) All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered in person, mailed by
certified or registered mail, return receipt requested, or sent by telecopier or
telex, addressed as follows:
if to the Company or any other party hereto, at the address of such
party set forth in the Purchase Agreement;
if to any subsequent holder of Preferred Shares or Restricted Stock,
to it at such address as may have been furnished to the Company in writing
by such holder;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Preferred Shares or
Restricted Stock). or to the holders of
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Preferred Shares or Restricted Stock (in the case of the Company) in accordance
with the provisions of this paragraph.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
(d) This Agreement may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company and the holders
of at least two-thirds of the outstanding shares of Restricted Stock.
(e) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(f) The obligations of the Company to register shares of Restricted
Stock under Sections 4, 5 or 6 shall terminate on the fifteenth anniversary of
the date of this Agreement.
(g) If requested in writing by the underwriters for the initial
underwritten public offering of securities of the Company, each holder of
Restricted Stock who is a party to this Agreement shall agree not to sell
publicly any shares of Restricted Stock or any other shares of Common Stock
(other than shares of Restricted Stock or other shares of Common Stock being
registered in such offering), without the consent of such underwriters, for a
period of not more than 270 days following the effective date of the
registration statement relating to such offering; provided, however, that all
persons entitled to registration rights with respect to shares of Common Stock
who are not parties to this Agreement, all other persons selling shares of
Common Stock in such offering, all persons holding in excess of 1% of the
capital stock of the Company on a fully diluted basis and all executive officers
and directors of the Company shall also have agreed not to sell publicly their
Common Stock under the circumstances and pursuant to the terms set forth in this
Section 13(g).
(h) Notwithstanding the provisions of Section 7(a), the Company's
obligation to file a registration statement, or cause such registration
statement to become and remain effective, shall be suspended for a period not to
exceed 90 days in any 24-month period if there exists at the time material non-
public information relating to the Company which, in the reasonable opinion of
the Company, should not be disclosed.
(i) The Company shall not grant to any third party any registration
rights more favorable than or inconsistent with any of those contained herein,
so long as any of the registration rights under this Agreement remains in
effect.
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(j) If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.
Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon this Agreement
shall be a binding agreement between the Company and you.
Very truly yours,
TELEDATA SOLUTIONS, INC.
By: ____________________________
Title: _________________________
AGREED TO AND ACCEPTED as of the date first above written.
Purchasers named in Schedule I to the Purchase Agreement:
ARCH VENTURE FUND II, L.P.
By: ARCH Management Partners II, L.P., its General Partner
By: ARCH Venture Partners, L.P. its General Partner
By: ARCH Venture Corporation, its General Manager
By: ____________________________________
Xxxxx Xxxxxxxx
Managing Director
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ARCH II PARALLEL FUND, L.P.
By: ARCH Management Partners II, L.P., its General Partner
By: ARCH Venture Partners, L.P., its General Partner
By: ARCH Venture Corporation, its General Manager
By:_____________________
Xxxxx Xxxxxxxx
Managing Director
XXXXXXX XXXXX CAPITAL PARTNERS V., L.P.
By: Xxxxxxx Xxxxx Capital Partners, LLC, its General Partner
By:_________________________________
Title: ______________________________
-13-
AMENDMENT NO. 1
TO
REGISTRATION RIGHTS AGREEMENT
AMENDMENT NO. 1, dated as of December 20,1996 by and among Teledata
Solutions, Inc., an Illinois corporation (the "Company"), certain holders of the
Company's outstanding securities (collectively, the "Existing Investors") and
those purchasers listed in Schedule I to the Series B Convertible Preferred
Stock Purchase Agreement (the "Purchase Agreement") dated the date hereof
(collectively, including such purchasers who participate in any Additional
Closing (as defined in the Purchase Agreement) and who execute a counterpart to
this Agreement, the "Purchasers").
WHEREAS, the Company and the Existing Investors are parties to that
Registration Rights Agreement (the "Registration Rights Agreement") by and among
the Company and the parties named therein dated as of the 19th day of March
1996; and
WHEREAS, the Purchasers are purchasing from the Company and the Company is
issuing and selling to the Purchasers up to 1,599,888 shares (the "Series B
Shares") of Series B Convertible Preferred Stock, par value $.01, ("Series B
Stock") of the Company at the aggregate purchase price of up to $6,000,000
pursuant to the Purchase Agreement, and
WHEREAS, it is a condition to the purchase of the Series B Shares that the
Registration Rights Agreement be amended to grant the Purchasers certain rights
thereunder, and the parties hereto desire to amend the Registration Rights
Agreement as set forth below;
NOW, THEREFORE in consideration of the foregoing and the promises and
covenants contained herein, the parties hereby agree as follows:
1. That Section 1 be and hereby is amended to add the following definition in
appropriate alphabetical order:
"Preferred Shares" shall mean shares of the Company's Series A Convertible
Preferred Stock, par value $.01 and Series B Convertible Preferred Stock,
par value $.01.
2. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Registration Rights Agreement.
3. In all other respects, the Registration Rights Agreement is hereby
ratified, confirmed and approved, and all terms thereof shall remain in
full force and effect.
4. This Amendment No. 1 may be executed in counterparts, each of which shall
constitute an original, but all of which, when taken together, shall
constitute but one agreement.
[Signature Pages Follow Immediately]
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COMPANY:
TELEDATA SOLUTIONS, INC.
By:_______________________________________
Name:
Title:
EXISTING AND NEW PURCHASERS:
ARCH VENTURE FUND II, L.P.
By: ARCH Management Partners II, L.P., its
General Partner
By: ARCH Venture Partners, its General
Partner
By: ARCH Venture Corporation, its
General Partner
By:_____________________
Xxxxx Xxxxxxxx
Managing Director
ARCH II PARALLEL FUND, L.P.
By: ARCH Management Partners II, L.P., its
General Partner
By: ARCH Venture Partners, L.P., its
General Partner
By: ARCH Venture Corporation, its
General Manager
By:_____________________
Xxxxx Xxxxxxxx
Managing Director
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XXXXXXX XXXXX CAPITAL PARTNERS V., L.P.
By: Xxxxxxx Xxxxx Capital Partners, LLC, its
General Partner
By:_________________________________
Name: ______________________________
NEW PURCHASERS:
ALLSTATE INSURANCE COMPANY
By: ______________________________________
By: ______________________________________
its Authorized Signatories
ARCH VENTURE FUND III, L.P.
By: ARCH Venture Partners, LLC, its General
Partner
By:______________________________________
Xxxxx Xxxxxxxx
Managing Director
-16-
AMENDMENT NO. 2
TO
REGISTRATION RIGHTS AGREEMENT
AMENDMENT NO. 2, dated as of March 11, 1998 by and among Apropos
Technology, Inc. (FKA "Teledata Solutions, Inc."), an Illinois corporation (the
"Company"), certain holders of the Company's outstanding securities
(collectively, the "Existing Investors") and the person listed under the heading
"New Investor" on the signature pages hereto (together with the Existing
Investors, the "Purchasers").
WHEREAS, the Company and the Existing Investors are parties to that
Registration Rights Agreement (the "Registration Rights Agreement") by and among
the Company and the parties named therein dated as of the 19th day of March
1996, as amended by Amendment No. 1 to Registration Rights Agreement dated
December 20, 1996; and
WHEREAS, certain of the Purchasers are purchasing from the Company and the
Company is issuing and selling to such Purchasers an aggregate of 1,152,737
shares (the "Series C Shares") of Series C Convertible Preferred Stock, par
value $.01, of the Company (the "Series C Stock") at the aggregate purchase
price of $8,000,000 pursuant to the certain Series Convertible Preferred Stock
Purchase Agreement dated as of March 11, 1998 between the Company and such
Purchasers (the "Purchase Agreement"); and
WHEREAS, it is a condition to the purchase of the Series C Shares that the
Registration Rights Agreement be further amended to grant the Purchasers certain
rights thereunder, and the parties hereto desire to amend the Registration
Rights Agreement as set forth below;
NOW, THEREFORE in consideration of the foregoing and the promises and
covenant contained herein, the parties hereby agree as follows:
1. That Section 1 of the Registration Rights Agreement be and hereby is
amended to restate the definition of "Preferred Shares" to read in its
entirety as follows:
"Preferred Shares" shall mean shares of the Company's
Series A Convertible Preferred Stock, par value $.01,
Series B Convertible Preferred Stock, par value $.01,
and Series Convertible Preferred Stock, $.01 par value
per share.
2. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Registration Rights Agreement.
3. In all other respects, the Registration Rights Agreement is hereby
ratified, confirmed and approved, and all terms thereof shall remain in
full force and effect.
4. This Amendment No. 2 may be executed in counterparts, each of which shall
constitute an original, but all of which, when taken together, shall
constitute but one agreement.
[Signature Pages Follow Immediately]
-17-
IN WITNESS WHEREOF, the Company, the Existing Investors and the New
Investor have executed this Amendment No. 2 as of the day and year first above.
COMPANY:
APROPOS TECHNOLOGY, INC
By:_______________________________________
Name:
Title:
EXISTING INVESTORS:
ARCH VENTURE FUND II, L.P.
By: ARCH Management Partners II, L.P., its
General Partner
By: ARCH Venture Partners, its General
Partner
By: ARCH Venture Corporation, its
General Partner
By:_____________________
Xxxxx Xxxxxxxx
Managing Director
ARCH II PARALLEL FUND, L.P.
By: ARCH Management Partners II, L.P., its
General Partner
By: ARCH Venture Partners, L.P., its
General Partner
By: ARCH Venture Corporation, its
General Manager
By:_____________________
Xxxxx Xxxxxxxx
Managing Director
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XXXXXXX XXXXX CAPITAL PARTNERS V., L.P.
By: Xxxxxxx Xxxxx Capital Partners, LLC, its
General Partner
By:
---------------------------------
Name:
------------------------------
ALLSTATE INSURANCE COMPANY
By:
--------------------------------------
By:
--------------------------------------
its Authorized Signatories
ARCH VENTURE FUND III, L.P.
By: ARCH Venture Partners, LLC, its General
Partner
By:
--------------------------------------
Xxxxx Xxxxxxxx
Managing Director
NEW INVESTOR:
OHIO PARTNERS, LTD.
By:
--------------------------------------
Title:
-------------------------------------
-19-
AMENDMENT NO. 3
TO
REGISTRATION RIGHTS AGREEMENT
AMENDMENT NO. 3, dated as of February __, 2000, by and among Apropos
Technology, Inc. (f/k/a Teledata Solutions, Inc.), an Illinois corporation (the
"Company"), certain holders of the Company's outstanding securities
(collectively, the "Existing Investors") and Xxxxxxxxx X. Xxxxx ("Xxxxx"
together with the Existing Investors, the "Purchasers").
WHEREAS, the Company and the Existing Investors are parties to that certain
Registration Rights Agreement by and among the Company and the parties named
therein and dated as of March 19, 1996, as amended by Amendment No. 1 to the
Registration Rights Agreement dated December 20, 1996 and Amendment No. 2 to the
Registration Rights Agreement dated March 11, 1998 (as amended, the
"Registration Rights Agreement"); and
WHEREAS, pursuant to a letter agreement between Xxxxxxxxx X. Xxxxx
("Xxxxx") and the Company dated February __, 2000, the Company agreed to use its
reasonable best efforts to have Xxxxx become a Purchaser under the Registration
Rights Agreement on the terms and subject to the conditions contained herein;
and
WHEREAS, the parties hereto desire to amend the Registration Rights
Agreement as set forth below;
NOW, THEREFORE, in consideration of the foregoing and the promises and
covenants contained herein, the parties hereby agree as follows:
1. That Section 1 of the Registration Rights Agreement be and hereby is
amended to insert the definition of "Xxxxx Shares" and restate the definition of
"Restricted Stock" to read in its entirety as follows:
"Xxxxx Shares" shall mean all of the 1,173,510 shares (after giving
effect to the Company's 7 for 4 stock split to take effect immediately
prior to the consummation of the Company's initial public offering) of
Common Stock of the Company owned by Xxxxx."
"Restricted Stock" shall mean (A) the Conversion Shares and (B) with
respect to all Sections of the Registration Rights Agreement except
Sections 4, 6 and 8, the Xxxxx Shares, but excluding any Conversion Shares
or Xxxxx Shares that have been either (i) registered under the Securities
Act pursuant to an effective registration statement filed thereunder and
disposed of in accordance with the registration statement covering them, or
(ii) publicly sold pursuant to Rule 144 under the Securities Act."
2. That Section 5 of the Registration Rights Agreement be and hereby is
amended by adding the following phrase to the end of second sentence of the
Section 5:
-20-
provided, however, that, notwithstanding anything in this Agreement to
the contrary, with respect to the Xxxxx Shares, the registration
rights provided in this Section 5 shall not become effective with
respect to any Restricted Stock held by Xxxxx until each Existing
Investor has sold (or been provided by the Company with an opportunity
pursuant to Sections 4, 5 or 6 of this Agreement to sell) Common
Shares pursuant to Sections 4, 5 or 6 of this Agreement for aggregate
net proceeds representing a Pro-Rata Portion of such Existing
Investor's Common Shares equivalent to Xxxxx'x Portion (with the
Average Price measured at a computation date of the filing date of
each registration statement).
3. Xxxxx hereby acknowledges that she has no right to (i) any registration
rights pursuant to Section 4 or 6 of the Registration Rights Agreement and (ii)
have any of her expenses reimbursed by the Company pursuant to Section 8 or any
other provision of the Registration Rights Agreement.
4. For purposes of this Amendment, the following capitalized terms shall
have the meaning set forth below:
"Average Price" shall mean the average of the closing prices for the
Common Shares over the 20 trading days preceding the fifth trading day prior to
the date of computation.
"Xxxxx'x Portion" shall mean that portion of Xxxxx Shares represented
by a fraction, the numerator of which is the amount of gross proceeds, less
underwriting discount received by Xxxxx in the Company's initial public offering
("IPO"), and the denominator of which is the total number of shares owned by
Xxxxx at the time of the IPO, multiplied by the offering price to the public.
"Pro-Rata Portion" shall mean a fraction, the numerator of which is
the aggregate gross proceeds less underwriting discounts received by the
Existing Investor in a sale or sales subsequent to the IPO, and the denominator
of which is the total number of shares owned by the Existing Investor at the
date of this Amendment multiplied by the Average Price in effect at the time the
computation is made.
5. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Registration Rights Agreement.
6. In all other respects, the Registration Rights Agreement is hereby
ratified, confirmed and approved, and all other terms thereof shall remain in
full force and effect.
7. This Amendment No. 3 may be executed in counterparts, each of which
shall constitute an original, but all of which, when taken together, shall
constitute but one agreement.
[Signature Pages Follow]
-21-
IN WITNESS WHEREOF, the Company, the Existing Investors and Xxxxxxxxx X.
Xxxxx have executed this Amendment No. 3 as of the day and year first written
above.
COMPANY:
APROPOS TECHNOLOGY, INC.
By:
------------------------
Name: Xxxxx X. Xxxxx
Title: President
----------------------------
Xxxxxxxxx X. Xxxxx
EXISTING INVESTORS:
ARCH VENTURE FUND II, L.P.
By: ARCH Management Partners II, L.P, its
General Partner
By: ARCH Venture Partners, L.P, its General
Partner
By: ARCH Venture Corporation, its
general partner
By:
-----------------------
Name:
----------------------
Title:
---------------------
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ARCH II PARALLEL FUND, L.P.
By: ARCH Management Partners II, L.P, its
General Partner
By: ARCH Venture Partners, L.P, its General
Partner
By: ARCH Venture Corporation, its
general partner
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
XXXXXXX XXXXX CAPITAL PARTNERS V, L.P.
By: Xxxxxxx Xxxxx Capital Partners, LLC, its
general partner
By:
------------------------------
Name:
----------------------------
Title:
----------------------------
ALLSTATE INSURANCE COMPANY
By:
-----------------------------------
By:
-----------------------------------
Its authorized signatories
ARCH VENTURE FUND III, L.P.
By: ARCH Venture Partners, LLC
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
OHIO PARTNERS, LTD.
By:
----------------------------------
Name:
---------------------------------
Title:
--------------------------------
-23-
