Exhibit 10.20
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of September 1, 1998 between HarvardNET, Inc., a Delaware corporation
(the "Company"), and those entities whose names appear on the signature pages
hereof (the "Holders").
This Agreement is made in connection with the Securities Purchase
Agreement, dated the date hereof (the "PURCHASE AGREEMENT") between the Company
and the Holders, pursuant to which the Holders are acquiring Series A Preferred
Stock, of the Company. The execution of and delivery of this Agreement is a
condition precedent to the obligations of the Holders under the Purchase
Agreement.
Unless otherwise defined herein, capitalized terms so used herein and not
defined shall have the same meaning as provided in the Purchase Agreement.
The parties hereby agree as follows:
1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the following
respective meanings:
"BUSINESS DAY" means any day, other than a Saturday, Sunday or legal
holiday, on which banks in the State of New York are open for business.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Common Stock, par value $.01 per share, of
the Company, as constituted on the date hereof, any shares into which such
Common Stock shall have been changed, or any shares resulting from any
reclassification of such Common Stock.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any successor statute thereto, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.
"HOLDERS" means the Holders referred to in the Preamble and any other
person holding Registrable Securities to whom these registration rights have
been assigned pursuant to Section 9(f) of this Agreement.
"MAJOR PURCHASERS" means any Holder who, at the time of measurement
thereof, holds 10% or more of the Registrable Securities.
"PERSON" shall mean an individual, partnership, corporation,
association, trust, joint venture, unincorporated organization and any
government, governmental department or agency or political subdivision thereof.
"PURCHASERS" means any person who holds Registrable Securities.
"REGISTRABLE SECURITIES" means (i) the Common Stock held by any
Holder issued or issuable pursuant to the conversion of Series A Preferred
Stock; (ii) any Common Stock or other
securities issued or issuable pursuant to the conversion of, or with respect to,
Series A Preferred Stock held by any Holder upon any stock split, stock
dividend, recapitalization, or similar event; and (iii) securities issued in
replacement or exchange of any of the securities issued in clauses (i) or (ii)
above; PROVIDED, HOWEVER, that shares of Common Stock that are Registrable
Securities shall cease to be Registrable Securities upon any sale pursuant to a
registration statement or Rule 144 under the Securities Act. Wherever reference
is made in this Agreement to a request or consent of holders of a certain
percentage of Registrable Securities, the determination of such percentage shall
include shares of Common Stock issuable upon conversion of the Series A
Preferred Stock even if such conversion has not been effected.
"REGISTRATION EXPENSES" means all expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation,
all registration, filing, listing and National Association of Securities
Dealers, Inc. ("NASD") fees, all fees and expenses of complying with securities
or blue sky laws, all word processing, duplicating and printing expenses, all
messenger and delivery expenses, any transfer taxes, the fees and expenses of
the Company's legal counsel and independent public accountants, including the
expenses of any special audits or "cold comfort" letters required by or incident
to such performance and compliance, fees and disbursements of one counsel for
all of the Holders, and any fees and disbursements of underwriters customarily
paid by issuers or sellers of securities; PROVIDED, HOWEVER, that Registration
Expenses shall not include underwriting discounts and commissions.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor statute thereto, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect at the time.
"SERIES A PREFERRED STOCK" means the Series A Preferred Stock, $.01
par value per share, of the Company, as constituted on the date hereof, any
shares into which such Series A Preferred Stock shall have been changed or any
shares resulting from any reclassification of such Series A Preferred Stock.
2. REGISTRATION.
(a) REQUESTED REGISTRATION. At any time following the 180th day after the
consummation of the Company's initial public offering of shares of Common Stock,
any Major Purchaser may deliver to the Company a written request that the
Company effect the registration under the Securities Act of all or part of the
Registrable Securities held by such person (a "REQUESTED REGISTRATION"). Upon
the delivery of such request, the Company will use its best efforts to effect
the registration under the Securities Act of the Registrable Securities that the
Company has been so requested to register in accordance with this Section 2(a)
within sixty (60) days after receipt of such request or within thirty (30) days
after receipt of such request if the Company is qualified to file a registration
statement on Commission Form S-3 or any successor or similar short-form
registration statement (collectively, "COMMISSION FORM S-3"); PROVIDED, HOWEVER,
that (i) the Company shall not be obligated to effect a Requested Registration
pursuant to this Section 2(a) during the 180 day period immediately following
the commencement of a public offering of the Company's equity securities and
(ii) the Company shall not be obligated to effect a Requested Registration on
Commission Form S-1 if the anticipated aggregate offering price of the
Registrable Securities and
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other securities to be sold in such registration is less than $1,000,000 unless
the requesting Major Purchasers pay the Registration Expenses incurred with
respect to such registration. The Company must effect an unlimited number of
registrations pursuant to this subdivision (a) to the extent such registrations
may be effected on Commission Form S-3, but the Company shall not be obligated
to effect more than three Requested Registrations hereunder other than on
Commission Form S-3. Subject to subdivision (f), the Company may include in such
Requested Registration other securities of the Company for sale, for the
Company's account or for the account of any other person, subject to the
managing underwriter, if any, determining that the inclusion of such additional
shares will not interfere with the orderly sale of the underwritten securities
at a price range acceptable to the Holder making a request under this Section
2(a).
(b) INCIDENTAL REGISTRATION. If the Company for itself or any of its
security holders shall at any time or times after the date hereof determine to
register under the Securities Act any shares of its capital stock or other
securities (other than (i) the registration of an offer, sale or other
disposition of securities solely to employees of, or other persons providing
services to, the Company, or any subsidiary pursuant to an employee or similar
benefit plan and (ii) registrations incident to a merger, acquisition or other
transaction of the type described in Rule 145 under the Securities Act or a
comparable or successor rule, registered on Form S-4 or similar or successor
forms), on each such occasion the Company will notify each Holder of such
determination at least thirty (30) days prior to the filing of such registration
statement, and upon the request of any Holder given in writing within twenty
(20) days after the receipt of such notice, the Company will use its best
efforts as soon as practicable thereafter to cause any of the Common Stock
specified by any such Holder to be included in such registration statement to
the extent such registration is permissible under the Securities Act and subject
to the conditions of the Securities Act and this Agreement (an "Incidental
Registration").
(c) REGISTRATION STATEMENT FORM. The Company shall, if permitted by law,
effect any registration requested under Section 2 by the filing of a
registration statement on Commission Form S-3 and shall use its best efforts to
take any action necessary to maintain its eligibility to utilize Commission Form
S-3 to permit resales as requested by the Holders with respect to "Transactions
Involving Secondary Offerings" as described in General Instruction I.B.3 of
Commission Form S-3.
(d) EXPENSES. The Company shall pay all Registration Expenses incurred in
connection with any Incidental Registration and, except as otherwise specified
in Section 2(a), any Requested Registrations.
(e) EFFECTIVE REGISTRATION STATEMENT. A Requested Registration or an
Incidental Registration requested pursuant to Section 2(a) or Section 2(b),
respectively, shall not be deemed to have been effected unless it has become
effective with the Commission; provided that the Company shall be deemed to have
satisfied its obligations hereunder with respect to any Requested Registration
other than on Form S-3 if the Significant Holder(s) requesting the same
thereafter withdraw such request prior to such Requested Registration becoming
effective with the Commission. Notwithstanding the foregoing, a registration
statement will not be deemed to have been effected if: (i) after it has become
effective with the Commission, such registration is interfered with by any stop
order, injunction, or other order or requirement of the Commission or other
governmental
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agency or any court proceeding for any reason other than a misrepresentation or
omission by any Holder; or (ii) the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied, other than solely by reason of some act or
omission by any Holder.
(f) PRIORITY IN REGISTRATION. If any registration to which this Agreement
is applicable is an underwritten registration, and the managing underwriters
shall give written advice to the Company that, in their opinion, market
conditions dictate that no more than a specified maximum number of securities
(the "UNDERWRITER'S MAXIMUM NUMBER") could successfully be included in such
registration, then the Company and the Holders will be able to participate in
such offering in the following order of priority: (A) in the case of a Requested
Registration (i) first, there shall be included in such registration that number
of Registrable Securities requested to be included therein by the Purchasers,
PRO RATA in accordance with their relative holdings of Registrable Securities,
that does not exceed the Underwriter's Maximum Number, (ii) second, there shall
be included in such registration those securities that the Company proposes to
offer and sell for its own account to the full extent of the remaining portion
of the Underwriter's Maximum Number, and (iii) third, there shall be included in
such registration that number of shares of Common Stock that Holders other than
the Purchasers shall have requested to be included in such offering, PRO RATA in
accordance with such Holder's relative holdings of Common Stock, to the full
extent of the remaining portion of the Underwriter's Maximum Number; and (B) in
the case of an Incidental Registration: (i) the Company shall be entitled to
include in such registration that number of securities that the Company proposes
to offer and sell for its own account in such registration and which does not
exceed the Underwriter's Maximum Number; (ii) second, there shall be included in
such registration that number of Registrable Securities requested to be included
therein by the Purchasers, PRO RATA in accordance with their relative holdings
of Registrable Securities, to the full extent of the remaining portion of the
Underwriter's Maximum Number, and (iii) third, there shall be included in such
registration that number of shares of Common Stock that Holders other than the
Purchasers shall have requested to be included in such offering, PRO RATA in
accordance with such Holder's relative holdings of Common Stock, to the full
extent of the remaining portion of the Underwriter's Maximum Number. If the
number of shares of Common Stock requested to be included in an underwritten
offering exceeds the then remaining portion of the Underwriter's Maximum Number
as provided in clauses (A) and (B) of this Section 2(f), as the case may be,
then the Holders whose aggregate request so exceeds the then remaining portion
of the Underwriter's Maximum Number may include shares of Common Stock in such
underwritten offering PRO RATA in accordance with the relative number of shares
originally requested to be included in such offering by such Holders in the
writing delivered in accordance with Section 2(a) or Section 2(b), as the case
may be.
(g) Notwithstanding anything in paragraphs (a) and (b) of this Section 2,
the Company shall have the right to delay any registration pursuant to paragraph
(a) or (b) of this Section 2 for up to ninety (90) days if such registration
would, in the judgment of the Company's Board of Directors, substantially
interfere with any material transaction being considered at the time of receipt
of the request from the Holders.
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3. REGISTRATION PROCEDURES.
(a) If and whenever the Company is required to use its best efforts to
effect the registration of any shares of Common Stock under the Securities Act
as provided in Section 2, the Company, as expeditiously as possible and subject
to the terms and conditions of Section 2, will:
(i) prepare and file with the Commission the requisite registration
statement to effect such registration and use its best efforts to cause such
registration to become and remain effective;
(ii) permit any Holder which, in the reasonable judgment of the
Holder, might be deemed to be an underwriter or a controlling person of the
Company, to participate in the preparation of such registration statement and to
require the insertion therein of material, furnished to the Company in writing,
which in the reasonable judgment of such Holder and its counsel should be
included;
(iii) 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 and
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement until the
earlier of such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement or the expiration of 180 days
after such registration statement becomes effective;
(iv) furnish to the Holders such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as the purchaser or any Holder of Common Stock to be
sold under such registration statement may reasonably request;
(v) use its best efforts to register or qualify all Common Stock
covered by such registration statement under such other United States state
securities or blue sky laws of such jurisdictions as any Holder of Common Stock
to be sold under registration statement shall reasonably request, to keep such
registration or qualification in effect for so long as such registration remains
in effect, and take any other action that may be reasonably necessary or
advisable to enable the Holder of Common Stock to be sold under such
registration statement to consummate the disposition in such jurisdictions of
the securities owned by such Holder, except that the Company shall not for any
such purpose be required to (a) qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the requirements of
this subdivision (v) be obligated to be so qualified, or (b) subject itself to
taxation in any such jurisdiction.
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(vi) use its best efforts to cause all Common Stock covered by such
registration statement to be registered with or approved by such other United
States state governmental agencies or authorities as may be necessary to enable
the Holder of Common Stock to be sold under such registration statement to
consummate the intended disposition of such Common Stock;
(vii) in the event of the issuance of any stop order suspending the
effectiveness of the registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Common Stock included in such registration statement for sale in any
jurisdiction, the Company shall use its best efforts promptly to obtain the
withdrawal of such order;
(viii) in the case of an underwritten public offering, use it best
efforts to furnish (1) an opinion, dated the effective date of the registration
statement, of the independent counsel representing the Company for the purposes
of such registration, addressed to the underwriters, in form and substance
customarily issued to underwriters in connection with an underwritten public
offering and (2) a letter, dated the effective date of the registration
statement, from the independent certified public accountants of the Company,
addressed to the underwriters stating that they are independent certified public
accountants within the meaning of the Securities Act and that in the opinion of
such accountants, the financial statements and other financial data of the
Company included in the registration statement or the prospectus, or any
amendment or supplement thereto, comply as to form in all material respects with
the applicable accounting requirements of the Securities Act.
(ix) immediately notify the Holders of Common Stock included in 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
as result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made, and at the request of the Holders promptly prepare and furnish
to the Holders a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered to the
Holders of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made;
(x) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen months, beginning
with the first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder, and not file any amendment
or supplement to such registration statement or prospectus to which any Holder
shall have reasonably objected in writing on the grounds that such amendment or
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supplement does not comply in all material respects with the requirements of the
Securities Act or of the rules or regulations thereunder, having been furnished
with a copy thereof at least two business days prior to the filing thereof;
(xi) provide a transfer agent for all Common Stock covered by such
registration statement not later than the effective date of such registration
statement; and
(xii) use its best efforts to list all Common Stock covered by such
registration statement on any securities exchange (or on NASD's NASDAQ) on which
any of the Company's issued and outstanding securities are then listed.
(b) The Company may require each Holder of Common Stock to be sold under
such registration statement, at the Company's expense, to furnish the Company
with such information and undertakings as it may reasonably request regarding
such Holder and the distribution of such securities as the Company may from time
to time reasonably request in writing.
(c) Each Holder, by execution of this Agreement, agrees (A) that upon
receipt of any notice of the Company of the happening of any event of the kind
described in subdivision (a)(ix) of this Section 3, such Holder will forthwith
discontinue its disposition of Common Stock pursuant to the registration
statement relating thereto until the receipt by such Holder of the copies of the
supplemented or amended prospectus contemplated by subdivision (a)(ix) of this
Section 3 and, if so directed by the Company, will deliver to the Company all
copies other than permanent file copies, then in possession of the Holders of
the prospectus relating to such Common Stock current at the time of receipt of
such notice and (B) that it will immediately notify the Company, at any time
when a prospectus relating to the registration of such Common Stock is required
to be delivered under the Securities Act, of the happening of any event as a
result of which information previously furnished by such Holder to the Company
for inclusion in such prospectus contains an untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances
under which they were made. In the event the Company or any such Holder shall
give any such notice, the period referred to in subdivision (a)(iii) of this
Section 3 shall be extended by a number of days equal to the number of days
during the period from and including the giving of notice pursuant to
subdivision (a)(ix) of this Section 3 to and including the date when such Holder
shall have received the copies of the supplemented or amended prospectus
contemplated by subdivision (a)(ix) of this Section 3.
4. UNDERWRITTEN OFFERINGS.
(a) UNDERWRITTEN OFFERING. In connection with any underwritten offering
pursuant to a registration requested under Section 2(a), the Company will enter
into an underwriting agreement with the underwriters for such offering, such
agreement to be in form and substance reasonably satisfactory to Major
Purchasers holding in the aggregate 60% or more of the Registrable Securities in
their reasonable judgment and to contain such representations and warranties by
the Company and such other terms as are customarily contained in agreements of
that type, including, without limitation, indemnities to the effect and to the
extent provided in Section 6. Each Holder proposing to distribute shares of
Common Stock in a registration in accordance with Section 2
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shall, if requested by the underwriters thereof, be required to enter into an
underwriting agreement containing customary representations and warranties
regarding such Holder and its intended method of distribution and any other
representation required by law, and containing customary indemnification and
contribution provisions.
(b) SELECTION OF UNDERWRITERS. If a Requested Registration pursuant to
Section 2(a) involves an underwritten offering, then the Company shall select
the underwriter from underwriting firms of national reputation, subject to the
reasonable approval of the Holders of a majority of the Registrable Securities
to be included in such registration.
(c) HOLDBACK AGREEMENTS. Each Holder agrees, if so requested by the
managing underwriter or the Company in connection with the Company's initial
public offering and with a registration effected in accordance with Section 2,
not to effect any public sale or distribution of Series A Preferred Stock or
Common Stock (including, without limitation, making any short sale of, or
granting any option for the purchase of, any Registrable Securities) or sales of
any such securities pursuant to Rule 144 or Rule 144A under the Securities Act,
during the seven (7) days prior to and the 180 days after the Company's initial
public offering or any underwritten registration pursuant to Section 2 has
become effective (except as part of such underwritten registration) or, if the
managing underwriter advises the Company that, in its opinion, no such public
sale or distribution should be effected for a period of not more than 180 days
after such underwritten registration in order to complete the sale and
distribution of securities included in such registration and the Company gives
notice to such effect to such Holders of such advice, each Holder shall not
effect any public sale or distribution of Series A Preferred Stock or Common
Stock or sales of such securities pursuant to Rule 144 or Rule 144A under the
Securities Act during such period after such underwritten registration, except
as part of such underwritten registration, whether or not such Holder
participates in such registration.
5. PREPARATION, REASONABLE INVESTIGATION.
In connection with the preparation and filing of each registration
statement under the Securities Act, the Company will give the Holders of Common
Stock to be sold under such registration statement, the underwriters, if any,
and their respective counsel and accountants, drafts and final copies of such
registration statement, each prospectus included therein or filed with the
Commission and each amendment thereof or supplement thereto, at least 5 business
days prior to the initial filing thereof with the Commission and at least one
business day prior to any other subsequent filing or amendment, and will give
each of them such access to its books and records and such opportunities to
discuss the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the opinion of such Holders and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of any registration under
the Securities Act pursuant to Section 2 of any Common Stock covered by such
registration, the Company will, and hereby does, indemnify and hold harmless
each Holder of Common Stock to be sold under
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such registration statement, each such Holder's legal counsel, each other person
who participates as an underwriter in the offering or sale of such securities
(if so required by such underwriter as a condition to including the Common Stock
of the Holders in such registration) and each other person, if any, who controls
any such Holder or any such underwriter within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which the Holders or underwriter or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, 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 securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained therein
or any document incorporated therein by reference, or any amendment or
supplement thereto, 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, or arise out of any violation by the Company of any rule
or regulation promulgated under the Securities Act or state securities law
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, and the Company will reimburse
the persons seeking indemnification hereunder for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; PROVIDED,
HOWEVER, that the Company shall not be liable to any person seeking
indemnification hereunder in any such case to the extent that any such loss,
claim, damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by such person.
(b) INDEMNIFICATION BY THE HOLDERS. Each Holder that sells any Common Stock
in any registration as contemplated by this Agreement shall, severally, and not
jointly and severally, indemnify and hold harmless (in the same manner and to
the same extent as set forth in subdivision (a) of this Section 6) the Company,
each director of the Company, each officer of the Company, each underwriter, if
any, and each other person, if any, who controls the Company within the meaning
of the Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if, and only if, such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with information furnished in writing to the Company directly by such
person or entity specifically for use therein; PROVIDED, HOWEVER, that the
obligation of any Holder hereunder shall be limited to an amount equal to the
net cash proceeds received by such Holder upon the sale of Common Stock sold in
the offering covered by such registration.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by a party seeking
indemnification in accordance with this Section 6 (an "Indemnified Party") of
notice of the commencement of any action or proceeding involving a claim
referred to in the preceding subdivisions of this Section 6, such Indemnified
Party will, if a claim in respect thereof is to be made against a party required
to provide indemnification (an "Indemnifying Party"), give written notice to the
latter of the commencement of such action, PROVIDED, HOWEVER, that the failure
of any Indemnified Party to give
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notice as provided herein shall not relieve the Indemnifying Party of its
obligation under the preceding subdivisions of this Section 6, except to the
extent that the Indemnifying Party is actually prejudiced by such failure to
give notice. In case any such action is brought against an Indemnified Party,
unless in such Indemnified Party's reasonable judgment a conflict of interest
between such Indemnified and indemnifying parties may exist in respect of such
claim, the Indemnifying Party shall be entitled to participate in and to assume
the defense thereof, jointly with any other Indemnifying Party similarly
notified to the extent that it may wish, with counsel reasonably satisfactory to
such Indemnified Party, and after notice from the Indemnifying Party to such
Indemnified Party of its election so to assume the defense thereof, the
Indemnifying Party shall not be liable to such Indemnified Party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. Without the
consent of the Indemnified Party, no Indemnifying Party shall consent to entry
of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation, and, without the consent of the Indemnifying Party, no Indemnified
Party shall consent to the entry of any judgment or enter into any settlement
with respect to any claim or litigation with respect to which such Indemnified
Party seeks indemnity hereunder.
(d) OTHER INDEMNIFICATION. Indemnification similar to that specified in the
preceding subdivisions of this Section 6 (with appropriate modifications) shall
be given by the Company and each Holder of Registrable Securities included in
any registration statement with respect to any required registration or other
qualification of securities under any Federal or state law or regulation of any
governmental authority, other than the Securities Act.
(e) INDEMNIFICATION PAYMENT. The indemnification required by this Section 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
(f) SURVIVAL OF OBLIGATIONS. The obligations of the Company and of the
Holders under this Section 6 shall survive the completion of any offering of
Common Stock under this Agreement.
(g) CONTRIBUTION. If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an Indemnified Party, then each
Indemnifying Party shall contribute to the amount paid or payable to such
Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in this Section 6 an amount or additional amount, as the case may
be, in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party or parties on the one hand and the Indemnified Party on the
other in connection with the statements or omissions which resulted in such
losses, claims, demands or liabilities as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Indemnifying Party or parties on the one hand or the
Indemnified Party on the other and the parties' relative, intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid to an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this Section 6(g) shall be deemed to include any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any
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action or claim which is the subject of this Section 6. 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.
7. COVENANTS RELATING TO RULE 144.
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
securities of the Company to the public without registration after such time as
a public market exists for the Common Stock, the Company agrees:
(a) to make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date of the first registration under the Securities Act filed by
the Company for an offering of its securities to the general public;
(b) to use its best efforts to then 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, as amended (at any time after it has become
subject to such reporting requirements); and
(c) so long as a Holder owns any Common Stock, to furnish to the
Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 (at any time after
90 days after the effective date of the first registration statement filed by
the Company for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements) a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents of the Company as a
Holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing a Holder to sell any such securities without
registration.
8. OTHER REGISTRATION RIGHTS.
The Company represents and warrants that, except as provided in this
Agreement, it has not granted to any Person any right to require the Company to
register shares of the Company's capital securities under the Securities Act or
to participate in any manner in any registration or public offering of the
Company's capital securities under the Securities Act.
9. MISCELLANEOUS.
(a) SPECIFIC PERFORMANCE. The parties hereto acknowledge that there may be
no adequate remedy at law if any party fails to perform any of its obligations
hereunder and that each party may be irreparably harmed by any such failure, and
accordingly agree that each party, in addition to any other remedy to which it
may be entitled at law or in equity, shall be entitled to compel specific
performance of the obligations of any other party under this Agreement in
accordance with the terms and conditions of this Agreement.
-11-
(b) NOTICES. All demands, requests, notices and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered personally or sent by
United States first class mail, postage prepaid, and to the parties hereto at
the following address or at such other address as any party hereto shall
hereafter specify by notice to the other party hereto:
(i) if to the Company, addressed to:
HarvardNET, Inc.
Xxx Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxxxx, Chairman
Facsimile No.: (000) 000-0000
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Facsimile No.: (000) 000-0000
(ii) if to the Holders, to their addresses set forth on Schedule 1
attached hereto
Except as otherwise provided herein, all such demands, requests, notices and
other communications shall be deemed to have been received on the date of
personal delivery thereof or on the third business day after the mailing
thereof.
(c) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts, without
regard to conflicts of law principles thereof.
(d) HEADINGS. The descriptive headings of the several sections and
paragraphs of this Agreement are inserted for convenience only, and do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
(e) ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the other writings
referred to herein or delivered pursuant hereto which form a part hereof contain
the entire understanding of the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter, including, without limitation, any
registration or similar rights granted under (i) the subscription agreement
pursuant to which any Holder acquired Common Stock, (ii) the Agreement and Plan
of Merger dated as of November 12, 1997 by and between the Company and Internet
Northeast, a Maine corporation, or (iii) in any other agreement between or among
the Company and any of its stockholders. This Agreement
-12-
may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a written instrument duly executed by the Company and
Purchasers holding not less than 60% of the voting power represented by the
Series A Preferred Stock or Registrable Securities held by all of the
Purchasers; PROVIDED, HOWEVER, that no amendment may be made to any provision
hereof without the prior written consent of the majority of Holders (as measured
by their relative holdings of Common Stock), if any, whose rights hereunder
would be adversely affected thereby differently than other Holders' rights would
be adversely affected thereby. Each Holder shall be bound by any amendment or
waiver effected in accordance with this Section 9(e), whether or not such Holder
has consented to such amendment or waiver. Without limitation of the foregoing,
solely with the written consent of the Company and Purchasers holding not less
than 60% of the voting power represented by the Registrable Securities held by
all of the Purchasers, this Agreement may be amended or amended and restated so
as to afford to other persons who become stockholders of the Company
registration rights that are senior in right to those granted to the Purchasers
hereunder so long as the relative registration rights of the Purchasers and the
other Holders hereunder are not amended in connection therewith.
(f) ASSIGNABILITY. This Agreement and all of the provisions hereof will be
assigned, without the consent of the Company, by any Holder to, and shall inure
to the benefit of, any purchaser, transferee or assignee of any Registrable
Securities (and in the case of Holders that are not Purchasers, any Common
Stock), unless the Holder specifies otherwise in connection with any particular
purchase, transfer or assignment. However, the Company shall not be required to
recognize any such purchaser, transferee or assignee as a Holder under this
Agreement unless and until either (i) such person becomes the holder of record
of the securities so purchased, transferred or assigned or (ii) the Company
receives written notice of such purchase, transfer or assignment.
(g) COUNTERPARTS. 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.
-13-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
HARVARDNET, INC.
By: /s/ Xxxxxxx Xxxxxxxxxx
-----------------------------------
Name:
Title:
MEDIA/COMMUNICATIONS PARTNERS III
LIMITED PARTNERSHIP
By: M/C III L.L.C., its General Partner
By: /s/ Xxxxx Xxxx
-----------------------------------
Duly Authorized Signatory
M/C INVESTORS L.L.C.
By: /s/ Xxxxx Xxxx
-----------------------------------
Duly Authorized Signatory
CHESTNUT STREET PARTNERS, INC.
By: /s/ Xxxxx Xxxx
-----------------------------------
Duly Authorized Signatory
FTT VENTURES LIMITED
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Name:
----------------------------
Title: Treasurer
FIDELITY INVESTORS II LIMITED PARTNERSHIP
By: Fidelity Investors Management, LLC,
its General Partner
By:
Name: /s/ Xxxxxx Xxxxxx
----------------------------
Title:
/s/ Xxxxxxx Xxxxxx
--------------------------------------
Xxxxxxx Xxxxxx
XXXXXX X. XXXXX TRUST U/D/T DATED
4/10/97
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Xxxxx Xxxxx, Trustee
/s/ Xxxxxx X. X. Xxxxx
--------------------------------------
Xxxxxx X. X. Xxxxx
/s/ Xxxxxxx Xxxxxxxxxx
--------------------------------------
Xxxxxxx Xxxxxxxxxx
/s/ Xxxxxxx Xxxxxxxxxx
--------------------------------------
Xxxxxxx Xxxxxxxxxx
-2-
/s/ Xxxxx Xxxxx
--------------------------------------
Xxxxx Xxxxx
/s/ Xxxxx Xxxxx
--------------------------------------
Xxxxx Xxxxx
XXXXX-XXXXX TRUST 1997
By: /s/ Xxxxx Xxxxx
----------------------------------
Trustee
/s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxx Xxxxxxx
------------------------------------
Xxxxx Xxxxxxx
/s/ Xxxxx X. Ach III
------------------------------------
Xxxxx X. Ach III
-3-
-----------------------------------
Xxxxx X. Xxxxxxx
-4-
XXXXX X. XXXXXXXX TRUST
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Xxxxx X. Xxxxxxxx, Trustee
-5-
SCHEDULE 1
NAME AND ADDRESS OF HOLDER
MEDIA/COMMUNICATIONS PARTNERS III LIMITED PARTNERSHIP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxx
and Xxxxx X.X. Xxxxxx
with a copy, which shall not constitute notice, to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Slap, Esq.
M/C INVESTORS L.L.C.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxx
and Xxxxx X.X. Xxxxxx
with a copy, which shall not constitute notice, to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Slap, Esq.
CHESTNUT STREET PARTNERS, INC.
(a Small Business Investment Company licensed
by the U.S. Small Business Administration)
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxx
and Xxxxx X.X. Xxxxxx
with a copy, which shall not constitute notice, to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Slap, Esq.
NAME AND ADDRESS OF HOLDER
FTT VENTURES LIMITED
c/o Fidelity Capital
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Vice President Telephone No.: Telephone No:
(000) 000 0000
Facsimile No.: (000) 000-0000
OR, IF BY HAND, TO:
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000
with a copy to, which shall not constitute notice, to:
Xxxxxxxx and Worcester, LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
FIDELITY INVESTORS II LIMITED PARTNERSHIP
c/o Fidelity Capital
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Vice President
Telephone No. (000) 000 0000
Facsimile No.: (000) 000-0000
OR, IF BY HAND, TO:
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000
with a copy to, which shall not constitute notice, to:
Xxxxxxxx and Worcester, LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
XXXXXXX XXXXXX
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-2-
NAME AND ADDRESS OF HOLDER
XXXXXX X. XXXXX TRUST
0000 Xxxxxxxxx Xxxxxx
Xxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: None
XXXXXX X.X. XXXXX
00 Xxxx Xxxxx, Xxxx Xxxxxx
Xxxxxx XX0 0XX Xxxxxxx
Telephone No.: 000 00 000 000-0000
Facsimile No.: 011 44 171 483-2657
with a copy to, which shall not constitute notice, to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
High Street Tower
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
XXXXXXX XXXXXXXXXX
00 Xxx Xxx Xxxx
Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
XXXXXXX XXXXXXXXXX
00 Xxx Xxx Xxxx
Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
XXXXX XXXXX
0 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: [ ]
XXXXX X. XXXXXXX
00 Xxxxxx Xxxxx Xxxx
Xxxx Xxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
XXXXX X. XXXXXXXX TRUST
4 Landing Xxxxx Xxxx
-3-
NAME XXX XXXXXXX XX XXXXXX
Xxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
XXXXX XXXXX
000 Xxxxxxxx Xxxxxx
Xxxxx X-0
Xxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
XXXXX-XXXXX 1997 TRUST
0000 0xx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
XXXX X. XXXXXX
00 Xxxxxxxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
XXXXXX X. XXXXX
00 Xxx Xxxxxx
Xxxxx Xxxxxxxx, XX 00000
XXXXX XXXXXXX
00 Xxxxxxxx Xxxx
Xxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
XXXXX X. ACH III
0 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
-4-
