EXHIBIT 4.3
PRIMUS KNOWLEDGE SOLUTIONS, INC.
Registration Rights Agreement
DATED
AS OF
JANUARY 21, 2000
CONTENTS
1. Definitions............................................. 1
2. Request for Registration................................ 2
3. Company Registration.................................... 2
4. Obligations of the Company.............................. 3
5. Furnish Information..................................... 4
6. Expenses of Registration................................ 5
7. Underwriting Requirements............................... 5
8. Delay of Registration................................... 6
9. Indemnification......................................... 6
11. Assignment of Registration Rights....................... 8
12. Termination of Registration Rights...................... 9
14. Miscellaneous........................................... 9
14.1 Notices........................................... 9
14.2 Amendments and Waivers............................ 10
14.3 Governing Law; Jurisdiction; Venue................ 10
14.4 Successors and Assigns............................ 10
14.5 Severability...................................... 10
14.6 Entire Agreement; Counterparts.................... 10
PRIMUS KNOWLEDGE SOLUTIONS, INC.
Registration Rights Agreement
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of
January 21, 2000, by and among Primus Knowledge Solutions, Inc., a Washington
corporation (the "Company"), and the Investors listed on Schedule A hereto (the
"Investors").
RECITALS
A. The Company is proposing to issue and sell newly authorized shares of
its Common Stock (the "Common Stock") to the Investors.
B. The Company and the Investors desire to enter into this Registration
Rights Agreement to facilitate the resale of the Common Stock by the Investors.
AGREEMENT
1. Definitions
For purposes of this Agreement, the following terms have the following
meanings:
(a) "Form S-1" means such form under the Securities Act of 1933, as
amended (the "Act"), as in effect on the date hereof or any registration form
under the Act subsequently adopted by the SEC;
(b) "Holder" means any of the Investors, as well as any person owning
or having the right to acquire Registrable Securities who is a party to this
Agreement as of the date hereof or who may be added as a party pursuant to the
terms of this Agreement, and any assignee thereof;
(c) "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Act and the declaration or order of
effectiveness of such registration statement or document;
(d) "Registrable Securities" means (i) any shares of Common Stock
issued to the Investors pursuant to that certain Agreement and Plan of Merger
dated
January 8, 2000 by and among the Company, Austin Acquisition, Inc. and
0xxxxx.xxx,Inc. and (ii) any Common Stock of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for
or in replacement of, such Common Stock, excluding in all cases, however, any
Registrable Securities sold by a person in a transaction in which its rights
under this Agreement are not assigned and any Common Stock which the holder
thereof is entitled to sell into the public market, together with all other
Registrable Securities of the Company beneficially owned by such holder (and all
Registrable Securities as to which such holder shares beneficial ownership) that
is at the time of registration, transferable by the holder thereof in a single
brokerage transaction under the provisions and within the volume limitations of
Rule 144(e)(1) promulgated under the Act or any successor to such Rule;
(e) "Registrable Securities then outstanding" means the number of
shares of Common Stock outstanding which are Registrable Securities; and
(f) "SEC" means the Securities and Exchange Commission.
2. Request for Registration
(a) The Company shall, by April 15, 2000, file a Registration Statement
on Form S-1 covering the resale of the Registrable Securities then outstanding.
(b) The Company is obligated to effect only one registration on behalf of
the Investors pursuant to this Section 2.
3. Company Registration
If the Company proposes to register (including for this purpose a
registration effected by the Company for shareholders other than the Holders)
any of its stock or other securities under the Act in connection with the public
offering of such securities solely for cash (other than a registration relating
solely to the sale of securities to participants in a Company stock plan, or a
registration on any form that does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities), the Company shall, at each such
time, promptly give each Holder of Registrable Securities written notice of such
registration. Upon the written request of each such Holder given within 20 days
after the mailing of such notice by the Company, the Company shall, subject to
the provisions of Section 7, use commercially reasonable efforts to cause to be
registered under the Act all of the Registrable Securities that each such Holder
has requested to be registered. In the event that the Company decides for any
reason not
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to complete the registration of its stock or other securities other than
Registrable Securities, the Company shall have no obligation under this Section
3 to continue with the registration of Registrable Securities. Any request
pursuant to this Section 3 to register Registrable Securities as part of an
underwritten public offering of Common Stock shall specify that such Registrable
Securities are to be included in the underwriting on the same terms and
conditions as the shares of Common Stock otherwise being sold through
underwriters under such registration.
4. Obligations of the Company
Whenever required under this Agreement to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its commercially reasonable
efforts to cause such registration statement to become effective, and, upon the
request of the Holders of 25% of the Registrable Securities registered
thereunder, keep such registration statement effective for up to 90 days.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the Act, and such
other documents as they may reasonably request to facilitate the disposition of
all securities covered by such registration statement.
(d) Use commercially reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering. Each Holder
participating in such registration shall also enter into and perform its
obligations under such an agreement.
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(f) Notify each Holder of Registrable Securities covered by such
registration statement, during the time when a prospectus is required to be
delivered under the Act, of the happening of any event as a result of which the
prospectus included 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 the light of the circumstances then existing.
(g) In the event of any underwritten public offering, at the request
of any Holder selling Registrable Securities in such registration, furnish on
the date that such Registrable Securities are delivered to the underwriters for
sale in connection such registration (i) an opinion, dated such date, of legal
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given by Company counsel to underwriters in an
underwritten public offering, addressed to the underwriters and (ii) a letter,
dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters.
(h) List the Registrable Securities being registered on any national
securities exchange on which a class of the Company's equity securities is
listed or qualify the Registrable Securities being registered for inclusion on
Nasdaq if the Company does not have a class of equity securities listed on a
national securities exchange.
(i) Provide a transfer agent and registrar for the securities being
registered and a CUSIP number, not later than the effective date of the
registration statement.
5. Furnish Information
It shall be a condition precedent to the obligations of the Company to take
any action pursuant to this Agreement that the selling Holders shall furnish to
the Company such information regarding themselves, the Registrable Securities
held by them and the intended method of disposition of such securities as shall
be reasonably required to effect the registration of their Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request.
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6. Expenses of Registration
In connection with any registration pursuant to this Agreement, the Company
shall be responsible for the payment of all reasonable expenses of the
registration, with the exception of (a) underwriting discounts and commissions,
if any, which shall be paid by the Company, the Holders and any other selling
holders of the Company's securities in proportion to the aggregate value of the
securities offered for sale by each of them, and (b) the fees and expenses of
more than one law firm acting as counsel to the selling Holders selected by a
majority in interest of the selling Holders, which additional counsel, if any,
shall be paid by the Holder or Holders that engage such counsel. The expenses to
be paid by the Company shall include, without limitation, all registration,
filing and qualification fees, printing and accounting fees, the fees and
disbursements of counsel for the Company and the fees and disbursements of one
counsel for the selling Holders.
7. Underwriting Requirements
The Company shall not be required under Section 3 to include any of the
Holders' securities in an underwritten offering of the Company's securities
unless such Holders accept the terms of the underwriting as agreed upon between
the Company and the underwriters selected by it. If the underwriters advise the
Company that marketing factors require a limitation on the number of Registrable
Securities to be included in such offering, then the Company shall so advise all
Holders of Registrable Securities that would otherwise have been underwritten
pursuant to Section 3, and the number of shares, including Registrable
Securities, that may be included in the registration shall be apportioned first
to the Company, then to selling Holders according to the total amount of
Registrable Securities requested to be sold in such registration by such
Holders, then pro rata among any other selling shareholders according to the
total amount of securities otherwise entitled to be included therein owned by
each such other selling shareholder, or in such other proportions as shall
mutually be agreed to by such selling shareholders; provided that in no event
shall the amount of securities of the selling Holders included in the
registration be reduced below 30% of the total amount of securities included in
such registration, unless such registration is the initial public offering of
the Company's securities, in which case the selling Holders may be excluded if
the underwriters make the determination described above and provided no other
shareholder's securities are included.
8. Delay of Registration
No Holder shall have any right to obtain or seek an injunction restraining
or otherwise delaying any registration of the Company as the result of any
controversy
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that might arise with respect to the interpretation or implementation of this
Agreement.
9. Indemnification
In the event any Registrable Securities are included in a registration
statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the Securities Exchange Act of 1934, as amended (the
"1934 Act"), against any actual expenses (including legal fees and costs),
losses, claims, damages (including settlement amounts) or liabilities (joint or
several) (collectively, "Losses") to which they may become subject under the
Act, the 1934 Act or other federal or state law, insofar as such Losses arise
out of or are based upon any of the following statements, omissions or
violations (collectively, a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus contained therein, or
any amendments or supplements thereto, untrue in light of the circumstances
under which they were made, (ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or (iii) any violation or alleged violation by the Company of
the Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Act, the 1934 Act or any state securities law. The Company
will reimburse (as incurred) each such Holder, underwriter or controlling person
for any Losses reasonably incurred by them in connection with investigating or
defending any Violations; provided, however, that the indemnity agreement
contained in this Section 9(a) shall not apply to amounts paid in settlement of
any claims for Violations if such settlement is made without the consent of the
Company, which consent shall not be unreasonably withheld, nor shall the Company
be liable in any such case for any Losses that arise out of or are based upon a
Violation that occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by,
or on behalf of, any such Holder, underwriter or controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company and its officers, directors, agents and
employees, each underwriter and each other Holder selling securities in such
registration statement, and any person who controls any of the foregoing within
the meaning of the Act or the 1934 Act, against any Losses to which the Company
or such
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officer, director, agent, employee, or underwriter or other selling Holder or
controlling person may become subject under the Act, the 1934 Act or other
federal or state law, insofar as such Losses arise out of or are based upon any
Violation that occurs in reliance upon and in conformity with written
information furnished by, or on behalf of, such Holder expressly for use in
connection with such registration; and each such Holder will reimburse (as
incurred) any Losses reasonably incurred by the Company or its officers,
directors, agents, employees, or underwriters or other selling Holders or
controlling persons in connection with investigating or defending any
Violations; provided, however, that (i) the indemnity agreement contained in
this Section 9(b) shall not apply to amounts paid in settlement of any claims
for Violations if such settlement is made without the consent of the Holder,
which consent shall not be unreasonably withheld and (ii) the obligations of
such Holders shall be limited to an amount equal to the net proceeds after
expenses and commissions to each such Holder of Registrable Securities sold as
contemplated herein, except in the case of willful fraud by such Holder.
(c) Promptly after receipt of notice of the commencement of any
action (including any governmental action), an indemnified party will, if a
claim is to be made against any indemnifying party under this Section 9, deliver
to the indemnifying party a written notice of the commencement, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if, in the opinion of counsel for the indemnifying
party, representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in the proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable period of time after notice of the
commencement of any such action shall relieve such indemnifying party of any
liability to the indemnified party under this Section 9 to the extent such
failure is prejudicial to its ability to defend such action, but the omission to
deliver written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section 9.
(d) If the indemnification provided for in this Section 9 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any Losses, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of
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the indemnifying party on the one hand and of the indemnified party on the other
in connection with the Violations that resulted in such Losses as well as any
other relevant equitable considerations; provided, that, in no event shall any
contribution by a Holder under this Section 10(d) exceed the net proceeds after
expenses and commissions to each such Holder, except in the case of willful
fraud by such Holder. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the Violation resulting in such Losses relates to information supplied
by the indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information, and opportunity to correct or prevent
such Violation.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement
entered into in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting agreement
shall control.
(f) The obligations of the Company and Holders under this Section 9
shall survive the completion of any offering of Registrable Securities and the
termination of Registration Rights pursuant to Section 12.
11. Assignment of Registration Rights
The rights to cause the Company to register Registrable Securities pursuant
to this Agreement may be assigned by a Holder to a transferee or assignee of
such securities of at least 100,000 shares of Registrable Securities (as
appropriately adjusted for stock splits, stock dividends, combinations and
similar events), who shall, upon such transfer or assignment, be deemed a
"Holder" under this Agreement; provided that the Company is, within a reasonable
period of time after such transfer, furnished with written notice of the name
and address of such transferee or assignee and the securities with respect to
which such registration rights are being assigned, and provided further that the
transferee or assignee agrees in writing to be bound by and subject to the terms
and conditions of this Agreement, including without limitation the provisions of
Section 13 below.
12. Termination of Registration Rights
The registration rights granted under Sections 2 and 3 of this Agreement
shall:
(a) Terminate as to all Holders on the second anniversary of the date of
this Agreement; and
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(b) Terminate as to any Holder at such time as the Registrable Securities
held by such Holder may be sold in any three-month period without registration
pursuant to Rule 144(k) promulgated by the SEC under the Act.
13. Market Standoff Agreement
Upon the request of the Company or the underwriters managing any
underwritten public offering of the Company's securities, the Holder and any
transferee or assignee agrees not to sell, make any short sale of, loan, grant
any option for the purchase of, or otherwise dispose of any Registrable
Securities or other securities of the Company (other than those included in the
registration) without the prior written consent of the Company or such
underwriters, as the case may be, for such period of time (not to exceed 180
days) from the effective date of such registration as may be requested by the
Company or such managing underwriters and to execute an agreement reflecting the
foregoing in such form as may be requested by the underwriters at the time of
the public offering. The Company may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions until the end of
such period. Notwithstanding the foregoing, the provisions of this Section 13
shall not apply to any Holder until 90 days after the effective date of the
registration statement filed by the Company pursuant to Section 2 hereof.
14. Miscellaneous
14.1 Notices
Any notice required or permitted under this Agreement shall be given in
writing and shall be deemed effectively given (a) upon personal delivery to the
party to be notified, (b) upon confirmation of receipt by fax by the party to be
notified, (c) one business day after deposit with a reputable overnight courier,
prepaid for overnight delivery and addressed as set forth in (d), or (d) five
days after deposit with the United States Post Office, postage prepaid,
registered or certified with return receipt requested and addressed to the party
to be notified at the address indicated for such party on the signature page, or
at such other address as such party may designate by 10 days' advance written
notice to the other parties given in the foregoing manner.
14.2 Amendments and Waivers
Any term of this Agreement may be amended and the observance of any term
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the Company and
the holders of a majority of the Registrable Securities then outstanding.
Additional Holders may be
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added to this Agreement with such consent by adding a signature page executed by
such additional Holder.
14.3 Governing Law; Jurisdiction; Venue
This Agreement shall be governed by and construed under the laws of the
state of Washington without regard to principles of conflict of laws. The
parties irrevocably consent to the jurisdiction and venue of the state and
federal courts located in King County, Washington in connection with any action
relating to this Agreement.
14.4 Successors and Assigns
The terms and conditions of this Agreement shall inure to the benefit of
and be binding on the respective successors and assigns of the parties as
provided herein.
14.5 Severability
If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision shall be excluded from this Agreement, and
the balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
14.6 Entire Agreement; Counterparts
This Agreement constitutes the entire agreement between the parties about
its subject and supersedes all prior agreements. This Agreement may be executed
in two or more counterparts, which together shall constitute one instrument.
[Signature pages follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
PRIMUS KNOWLEDGE SOLUTIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxx
Its: President and Chief Executive Officer
Address: 0000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
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SCHEDULE A
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INVESTORS
Xxxxx X. Xxxxxx
Xxxxxx L House
Xxxxx and Xxxx Xxxxxxxxx
Xxxxx Xxxxxx
Xxxxxx Xxxxxxxxxxxx
Xxxxxx Xxxx
Xxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxx Xxxxxx
Oak Investment Partners VII, L.P.
Oak VII Affiliates Fund, L.P.
Intelligent Systems Corporation
Live Oak Equity Partners, L.P.
Xxxxx Xxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxx
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