1
EXHIBIT 10.14
================================================================================
EXCHANGE APPLICATIONS, INC.
(a Delaware corporation)
---------------------------------
AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
---------------------------------
DECEMBER 4, 1997
================================================================================
2
AMENDED AND RESTATED REGISTRATION
RIGHTS AGREEMENT dated as of December 4,
1997, among EXCHANGE APPLICATIONS, INC., a
Delaware corporation (the "CORPORATION"), and
the INVESTORS (as defined below).
The Investors own or have the right to purchase or otherwise acquire
(by the exercise, exchange or conversion of shares of the Corporation's capital
stock owned by the Investors) shares of the Corporation's Common Stock (as
defined below). The Corporation and the Investors deem it to be in their
respective best interests to set forth the rights of the Investors in connection
with public offerings and sales of the capital stock of the Corporation.
ACCORDINGLY, in consideration of the mutual covenants and agreements
contained herein, the sufficiency of which is hereby acknowledged, the parties
agree as follows:
1. DEFINITIONS; RULES OF CONSTRUCTION.
(a) DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings ascribed to them below:
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which banks are not required to be open in New York, New York or Boston,
Massachusetts.
"COMMISSION" means the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
"COMMON STOCK" means the Common Stock, $.001 par value, of the Company.
"COMMON STOCK EQUIVALENT" means (i) one share of Common Stock or (ii)
the right to acquire, whether or not immediately exercisable, one share of
Common Stock, whether evidenced by an option, warrant, convertible security or
other instrument or agreement.
"CYRK" means CYRK, Inc., a Delaware corporation.
3
"CYRK/GPLP INVESTORS" means, collectively, CYRK, GPLP and their
respective affiliates and partners, and each of their respective directors,
officers, employees, partners and stockholders, in each case who hold Restricted
Shares, and shall also include any successor to, or assignee or transferee of
Restricted Shares held by, any of the foregoing Persons who or which executes
and delivers to the Corporation an Investor Joinder.
"EXCHANGE ACT" means the Securities Exchange Act of 1934 or any
successor Federal statute, and the rules and regulations of the Commission
promulgated thereunder, all as the same shall be in effect from time to time.
"GPLP" means Grant & Partners Limited Partnership, a Delaware limited
partnership.
"INITIAL PUBLIC OFFERING" means the initial Public Offering of the
Common Stock, registered pursuant to the Securities Act.
"INSIGHT" means Insight Venture Partners I, L.P., a Delaware limited
partnership.
"INSIGHT II" means Insight Capital Partners II, L.P., a Delaware
limited partnership.
"INSIGHT INVESTORS" means, collectively, Insight, Wexford and their
respective affiliates and partners, and each of their respective directors,
officers, employees, partners and stockholders, in each case who hold Restricted
Shares, and shall also include any successor to, or assignee or transferee of
Restricted Shares held by, any of the foregoing Persons who or which executes
and delivers to the Corporation an Investor Joinder.
"INSIGHT II INVESTORS" means, collectively, Insight II and Wexford and
their respective affiliates and partners, and each of their respective
directors, officers, employees, partners and stockholders, in each case who hold
Restricted Shares, and shall also include any successor to, or assignee or
transferee of Restricted Shares held by any of the foregoing Persons who or
which executes and delivers to the Corporation an Investor Joinder.
"INVESTOR JOINDER" means a joinder agreement, substantially in the form
of EXHIBIT A hereto, by which a Person may become an Investor after the date
hereof.
"INVESTORS" means, collectively, each of the Persons listed on Schedule
I hereto and any other Person who becomes a party to this Agreement as an
Investor, and includes any successor to, or assignee or transferee of, any such
Person and
-2-
4
who or which executes and delivers to the Corporation an Investor Joinder.
"MAJORITY OF THE INSIGHT INVESTORS" means those Insight Investors who
hold in the aggregate in excess of 50% of the Restricted Shares (on a Common
Stock Equivalent basis) held by all of the Insight Investors.
"MAJORITY OF THE INSIGHT II INVESTORS" means those Insight II Investors
who hold in the aggregate in excess of 50% of the Restricted Shares (on a Common
Stock Equivalent basis) held by all of the Insight II Investors.
"OTHER SHARES" means, at any time, those shares of Common Stock which
do not constitute Primary Shares or Registrable Shares.
"PERSON" shall be construed broadly and shall include an individual, a
partnership, an association, a joint stock company, a limited liability company,
a trust, a joint venture, an unincorporated organization and a governmental
entity or any department, agency or political subdivision thereof.
"PRIMARY SHARES" means, at any time, the authorized but unissued shares
of Common Stock and shares of Common Stock held by the Corporation in its
treasury.
"PUBLIC OFFERING" means a public offering of Common Stock pursuant to a
registration statement declared effective under the Securities Act, except that
a Public Offering shall not include an offering of Common Stock to be issued as
consideration in connection with a business acquisition or an offering of
Securities issuable pursuant to an employee benefit plan.
"REGISTRABLE SHARES" means Restricted Shares which constitute Common
Stock.
"REGISTRATION DATE" means the date upon which the registration
statement pursuant to which the Corporation shall have initially registered
shares of Common Stock under the Securities Act for sale to the public shall
have been declared effective.
"RESTRICTED SHARES" means, at any time and with respect to any
Investor, the shares of Common Stock and any other Securities issued by the
Corporation which by their terms are exercisable or exchangeable for or
convertible into Common Stock, and any Securities issued by the Corporation
received on or with respect to any such Common Stock, which are held by such
Investor and which heretofore have not been sold to the public pursuant to a
registration statement under the Securities Act or pursuant to Rule 144 or may
not be sold under Rule 144(k).
-3-
5
"RULE 144" means Rule 144 promulgated by the Securities and Exchange
Commission under the Securities Act as such rule may be amended from time to
time, or any similar rule then in force.
"SECURITIES" means, with respect to any Person, such Person's
"SECURITIES" as defined in Section 2(1) of the Securities Act and includes,
without limitation, such Person's capital stock or other equity interests or any
options, warrants or other securities that are directly or indirectly
convertible into, or exercisable or exchangeable for, such Person's capital
stock or other equity interests.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"WEXFORD" means Wexford Insight LLC, a Delaware limited liability
company. RULES OF CONSTRUCTION. The use in this Agreement of the term
"INCLUDING" means "INCLUDING, WITHOUT LIMITATION." The words "herein", "HEREOF",
"HEREUNDER" and other words of similar import refer to this Agreement as a
whole, including the schedules and exhibits, as the same may from time to time
be amended, modified, supplemented or restated, and not to any particular
section, subsection, paragraph, subparagraph or clause contained in this
Agreement. All references to sections, schedules and exhibits mean the sections
of this Agreement and the schedules and exhibits attached to this Agreement. The
title of and the section and paragraph headings in this Agreement are for
convenience of reference only and shall not govern or affect the interpretation
of any of the terms or provisions of this Agreement. The use herein of the
masculine, feminine or neuter forms shall also denote the other forms, as in
each case the context may require. Where specific language is used to clarify by
example a general statement contained herein, such specific language shall not
be deemed to modify, limit or restrict in any manner the construction of the
general statement to which it relates. The language used in this Agreement has
been chosen by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party.
2. REQUIRED REGISTRATION.
(a) If at any time from and after the Registration Date, the
Corporation shall be requested by either a Majority of the Insight Investors or
by a Majority of the Insight II Investors to effect the registration under the
Securities Act of Registrable Shares with an anticipated aggregate offering
price of at least $5,000,000 in a firm commitment, underwritten Public Offering
to be managed by an underwriter selected by the Company and reasonably
acceptable to a Majority of the Insight Investors, in the case where
Registration was requested by the
-4-
6
Insight Investors, or by a Majority of the Insight II Investors, in the case
where registration was requested by the Insight II Investors, it shall promptly
give written notice to the other Investors of its requirement so to register
such Registrable Shares and, upon the written request, delivered to the
Corporation within 30 days after delivery of any such notice by the Corporation,
of the other Investors to include in such registration Registrable Shares (which
request shall specify the number of Registrable Shares proposed to be included
in such registration), the Corporation shall, subject to SECTION 2(b), promptly
use its best efforts to effect such registration under the Securities Act of the
Registrable Shares which the Corporation has been so requested to register.
(b) Anything contained in SECTION 2(a) to the contrary
notwithstanding, the Corporation shall not be obligated to effect pursuant to
SECTION 2(a) any registration under the Securities Act except in accordance with
the following provisions:
(i) the Corporation shall not be obligated to use its best
efforts to file and cause to become effective
(A) more than (1) two registration statements on Form S-1
(or any successor form thereto) (the "S-1 Registration") initiated
pursuant to SECTION 2(a) by a majority of the Insight Investors
and (2) two S-1 Registrations initiated by a Majority of the
Insight II Investors pursuant to which the Registrable Shares
requested to be included therein have been effectively sold
thereunder or
(B) any registration statement during any period in which
any other registration statement (other than on Form S-4 or Form
S-8 promulgated under the Securities Act or any successor forms
thereto) pursuant to which Primary Shares are to be or were sold
has been filed and not withdrawn or has been declared effective
within the prior 90 days;
(ii) the Corporation may delay the filing or effectiveness of
any registration statement for a period of up to 90 days after the date
of a request for registration pursuant to SECTION 2(a) if at the time
of such request the Corporation is engaged, or has fixed plans to
engage within 90 days of the time of such request, in a firm
commitment, underwritten Public Offering of Primary Shares in which the
holders of Registrable Shares may include Registrable Shares pursuant
to SECTION 3;
-5-
7
(iii) with respect to any registration pursuant to SECTION 2(A),
the Corporation may include in such registration any Primary Shares or
Other Shares; PROVIDED, HOWEVER, that if the managing underwriter
advises the Corporation that the inclusion of all of the Registrable
Shares, Primary Shares and/or Other Shares proposed to be included in
such registration would interfere with the successful marketing
(including pricing) of all of such securities, then the number of
Registrable Shares, Primary Shares and/or Other Shares proposed to be
included in such registration shall be included in the following order:
(A) FIRST, the Registrable Shares requested by the Insight
Investors and Insight II Investors to be included in such
registration (or, if necessary, such Registrable Shares PRO RATA
among the holders thereof based upon the number of Registrable
Shares requested to be registered by each such holder);
(B) SECOND, the Registrable Shares requested by the
CYRK/GPLP Investors to be included in such registration (or, if
necessary, such Registrable Shares PRO RATA among the holders
thereof based upon the number of Registrable Shares requested to
be registered by each such holder);
(C) THIRD, the Registrable Shares requested by Investors
(other than the Insight Investors, Insight II Investors or the
CYRK/GPLP Investors) to be included in such registration (or, if
necessary, such Registrable Shares PRO RATA among the holders
thereof based upon the number of Registrable Shares requested to
be registered by each such holder);
(D) FOURTH, the Primary Shares; and
(E) FIFTH, the Other Shares.
(c) A requested registration under SECTION 2(a) may be rescinded
prior to such registration being declared effective by the Commission by written
notice to the Corporation either from the Majority of Insight Investors
initiating such registration, in the case where the Insight Investors initiated
registration pursuant to SECTION 2(a), or from the Majority of Insight II
Investors initiating such registration, in the case where the Insight II
Investors initiated registration pursuant to SECTION 2(a); PROVIDED, HOWEVER,
that such rescinded registration shall not be deemed a registration statement
initiated pursuant to SECTION 2(a) for the purpose of SECTION 2(a)(i)(A) if (x)
such request of withdrawal shall have been caused by, or made in response to,
the material adverse effect of an event on the business, operations, assets or
-6-
8
condition (financial or otherwise) of the Corporation and its subsidiaries taken
as a whole or (y) the Corporation shall have been reimbursed for all
out-of-pocket expenses incurred by the Corporation in connection with such
rescinded registration.
3. PIGGYBACK REGISTRATION.
If the Corporation at any time proposes for any reason to register
Primary Shares or Other Shares under the Securities Act (other than on Form S-4
or Form S-8 promulgated under the Securities Act or any successor forms thereto)
(but not in connection with any Initial Public Offering), it shall promptly give
written notice to the Investors of its intention to so register such Primary
Shares or Other Shares and, upon the written request, delivered to the
Corporation within 30 days after delivery of any such notice by the Corporation,
of any Investor to include in such registration Registrable Shares (which
request shall specify the number of Registrable Shares proposed to be included
in such registration), the Corporation shall use its best efforts to cause all
such Registrable Shares to be included in such registration on the same terms
and conditions as the securities otherwise being sold in such registration;
PROVIDED, HOWEVER, that if the managing underwriter advises the Corporation that
the inclusion of all Registrable Shares requested to be included in such
registration would interfere with the successful marketing (including pricing)
of the Primary Shares or Other Shares proposed to be registered by the
Corporation, then the number of Primary Shares, Registrable Shares and Other
Shares proposed to be included in such registration shall be included in the
following order:
(i) FIRST, the Primary Shares;
(ii) SECOND, the Registrable Shares requested to be included in
such registration (or, if necessary, PRO RATA among the holders
thereof, based upon the number of Registrable Shares requested to be
registered by each such holder); and
(iii) THIRD, the Other Shares.
-7-
9
4. REGISTRATIONS ON FORM S-3.
Anything contained in SECTION 2 to the contrary notwithstanding, at
such time as the Corporation shall have qualified for the use of Form S-3
promulgated under the Securities Act or any successor form thereto, a Majority
of the Insight Investors and a Majority of the Insight II Investors shall have
the right to request in writing an unlimited number of registrations on Form S-3
(or any successor form thereto) of Registrable Shares, which request or requests
shall (i) specify the number of Registrable Shares intended to be sold or
disposed of and the holders thereof, which shall have an anticipated aggregate
offering price of at least $2,500,000, and (ii) state the intended method of
disposition of such Registrable Shares. A requested registration on Form S-3 or
any such successor form in compliance with this SECTION 4 shall not count as a
registration statement initiated pursuant to SECTION 2 but shall otherwise be
treated as a registration initiated pursuant to, and shall, except as otherwise
expressly provided in this SECTION 4, be subject to SECTION 2.
5. HOLDBACK AGREEMENT.
If the Corporation at any time shall register shares of Common Stock
under the Securities Act (including any registration pursuant to SECTION 2) for
sale to the public, the Investors shall not sell publicly, make any short sale
of, grant any option for the purchase of, or otherwise dispose publicly of, any
Registrable Shares (other than those shares of Common Stock included in such
registration pursuant to SECTIONS 2, 3 or 4) without the prior written consent
of the Corporation for a period designated by the Corporation in writing to the
Investors, which period shall begin not more than 10 days prior to the
effectiveness of the registration statement pursuant to which such Public
Offering shall be made and shall not last more than 180 days after the effective
date of such registration statement. The Corporation shall obtain the agreement
of any Person permitted to sell shares of stock in a registration to be bound by
and to comply with this SECTION 5 as if such Person was an Investor hereunder.
6. PREPARATION AND FILING.
If and whenever the Corporation is under an obligation pursuant to the
provisions of this Agreement to use its best efforts to effect the registration
of any Registrable Shares, the Corporation shall, as expeditiously as
practicable:
(a) use its best efforts to cause a registration statement that
registers such Registrable Shares to become and remain effective for a period of
180 days or until all of such Registrable Shares have been disposed of (if
earlier);
-8-
10
(b) furnish, at least five business days before filing a
registration statement that registers such Registrable Shares, a prospectus
relating thereto or any amendments or supplements relating to such a
registration statement or prospectus, to one counsel selected by Insight and
Insight II (the "INVESTORS' COUNSEL"), copies of all such documents proposed to
be filed (it being understood that such five-business-day period need not apply
to successive drafts of the same document proposed to be filed so long as such
successive drafts are supplied to the Investors' Counsel in advance of the
proposed filing by a period of time that is customary and reasonable under the
circumstances);
(c) 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
at least a period of 180 days or until all of such Registrable Shares have been
disposed of (if earlier) and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of such Registrable Shares;
(d) notify in writing the Investors' Counsel promptly of (i) the
receipt by the Corporation of any notification with respect to any comments by
the Commission with respect to such registration statement or prospectus or any
amendment or supplement thereto or any request by the Commission for the
amending or supplementing thereof or for additional information with respect
thereto, (ii) the issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or prospectus or any amendment or
supplement thereto or the initiation or threatening of any proceeding for that
purpose (and the Corporation shall use its best efforts to prevent the issuance
thereof or, if issued, to obtain its withdrawal) and (iii) the receipt by the
Corporation of any notification with respect to the suspension of the
qualification of such Registrable Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purposes;
(e) use its best efforts to register or qualify such Registrable
Shares under such other securities or blue sky laws of such jurisdictions as any
seller of Registrable Shares reasonably requests, to keep such registrations or
qualifications in effect for so long as the registration statement covering such
Registrable Shares remains in effect and do any and all other acts and things
which may be reasonably necessary or advisable to enable such seller of
Registrable Shares to consummate the disposition in such jurisdictions of the
Registrable Shares owned by such seller; PROVIDED, HOWEVER, that the Corporation
will not be required to qualify generally to do business, subject itself to
general taxation or consent to
-9-
11
general service of process in any jurisdiction where it would not otherwise be
required to do so but for this SECTION 6(e);
(f) furnish to each seller of Registrable Shares such number of
copies of a summary prospectus, if any, or other prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as such seller of Registrable Shares may
reasonably request in order to facilitate the public sale or other disposition
of such Registrable Shares;
(g) use its best efforts to cause such Registrable Shares to be
registered with or approved by such other governmental agencies or authorities
as may be necessary by virtue of the business and operations of the Corporation
to enable the seller or sellers thereof to consummate the disposition of such
Registrable Shares;
(h) notify on a timely basis each seller of such Registrable Shares
at any time when a prospectus relating to such Registrable Shares is required to
be delivered under the Securities Act within the appropriate period mentioned in
SECTION 6(A), of the happening of any event known to the Corporation 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 light of the circumstances then existing and, at the
request of such seller, prepare and furnish to such seller 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 offerees of such shares, 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 light of the circumstances then existing;
(i) make available upon reasonable notice and during normal business
hours, for inspection by any seller of Registrable Shares, any underwriter
participating in any disposition pursuant to such registration statement and any
attorney, accountant or other agent retained by any such seller or underwriter
(collectively, the "INSPECTORS"), all pertinent financial and other records,
pertinent corporate documents and properties of the Corporation (collectively,
the "RECORDS"), as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Corporation's officers,
directors and employees to supply all information (together with the Records,
the "INFORMATION") reasonably requested by any such Inspector in connection with
such registration statement (any of the Information which the Corporation
determines in good faith to be confidential, and of
-10-
12
which determination the Inspectors are so notified, shall not be disclosed by
the Inspectors, unless (i) the disclosure of such Information is necessary to
avoid or correct a misstatement or omission in the registration statement, (ii)
the release of such Information is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction or, upon the written advice of counsel,
is otherwise required by law, or (iii) such Information has been made generally
available to the public, and each seller of Registrable Shares agrees that it
will, upon learning that disclosure of such Information is sought in a court of
competent jurisdiction, give notice to the Corporation and allow the
Corporation, at the Corporation's expense, to undertake appropriate action to
prevent disclosure of the Information deemed confidential);
(j) use its best efforts to obtain from its independent certified
public accountants "COLD COMFORT" letters in customary form and at customary
times and covering matters of the type customarily covered by cold comfort
letters;
(k) use its best efforts to obtain from its counsel an opinion or
opinions in customary form, naming each seller of Registrable Shares as an
additional addressee or party who may rely thereon;
(l) provide a transfer agent and registrar (which may be the same
Person and which may be the Corporation) for such Registrable Shares;
(m) issue to any underwriter to which any seller of Registrable
Shares may sell shares in such offering, certificates evidencing such
Registrable Shares;
(n) list such Registrable Shares on any national securities exchange
on which any shares of the Common Stock are listed or, if the Common Stock is
not listed on a national securities exchange, use its best efforts to qualify
such Registrable Shares for inclusion on the automated quotation system of the
National Association of Securities Dealers, Inc. (the "NASD"), or such other
national securities exchange as the holders of a majority of such Registrable
Shares shall request;
(o) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission and make available to its
securityholders, as soon as reasonably practicable, earnings statements (which
need not be audited) covering a period of 12 months beginning within three
months after the effective date of the registration statement, which earnings
statements shall satisfy the provisions of Section 11(a) of the Securities Act;
and
-11-
13
(p) use its best efforts to take all other steps necessary to effect
the registration of such Registrable Shares contemplated hereby.
7. EXPENSES.
All expenses incurred by the Corporation in complying with SECTION 6,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the NASD), fees and expenses of complying with
securities and blue sky laws, printing expenses, fees and expenses of the
Corporation's counsel and accountants and fees and expenses of the Investors'
Counsel, shall be paid by the Corporation; PROVIDED, HOWEVER, that all
underwriting discounts and selling commissions applicable to the Registrable
Shares and Other Shares shall not be borne by the Corporation but shall be borne
by the seller or sellers thereof, in proportion to the number of Registrable
Shares and Other Shares sold by each such holder.
8. INDEMNIFICATION.
(a) In connection with any registration of any Registrable Shares
under the Securities Act pursuant to this Agreement, the Corporation shall
indemnify and hold harmless each seller of such Registrable Shares, each
underwriter, broker or any other Person acting on behalf of such seller and each
other Person, if any, who controls any of the foregoing Persons within the
meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several (or actions in respect thereof), to which any of
the foregoing Persons 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 an untrue statement or allegedly untrue
statement of a material fact contained in the registration statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein or otherwise filed
with the Commission, any amendment or supplement thereto or any document
incident to registration or qualification of any Registrable Shares, 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 or, with respect to any prospectus, necessary to make the
statements therein in light of the circumstances under which they were made not
misleading, or any violation by the Corporation of the Securities Act or state
securities or blue sky laws applicable to the Corporation and relating to action
or inaction required of the Corporation in connection with such registration or
qualification under such state securities or blue sky laws; and shall reimburse
such seller, such underwriter, such broker or such other Person acting on behalf
of such seller and each such controlling Person for any legal or other expenses
reasonably incurred by any of them in connection with
-12-
14
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the Corporation shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises out of
or is based upon an untrue statement or allegedly untrue statement or omission
or alleged omission made in said registration statement, preliminary prospectus,
final prospectus, amendment, supplement or document incident to registration or
qualification of any Registrable Shares in reliance upon and in conformity with
written information furnished to the Corporation through an instrument duly
executed by such seller or underwriter specifically for use in the preparation
thereof.
(b) In connection with any registration of Registrable Shares under
the Securities Act pursuant to this Agreement, each seller of Registrable Shares
shall severally and not jointly indemnify and hold harmless (in the same manner
and to the same extent as set forth in SECTION 8(a)) the Corporation, each
director of the Corporation, each officer of the Corporation who shall sign such
registration statement, each underwriter, broker or other Person acting on
behalf of such seller and each Person who controls any of the foregoing Persons
within the meaning of the Securities Act and each other seller of Registrable
Shares under such registration statement with respect to any statement or
omission from such registration statement, any preliminary prospectus or final
prospectus contained therein or otherwise filed with the Commission, any
amendment or supplement thereto or any document incident to registration or
qualification of any Registrable Shares, if such statement or omission was made
in reliance upon and in conformity with written information furnished to the
Corporation or such underwriter through an instrument duly executed by such
seller or a Person duly acting on their behalf specifically for use in
connection with the preparation of such registration statement, preliminary
prospectus, final prospectus, amendment or supplement; PROVIDED, HOWEVER, that
the maximum amount of liability in respect of such indemnification shall be
limited, in the case of each seller of Registrable Shares, to an amount equal to
the net proceeds actually received by such seller from the sale of Registrable
Shares effected pursuant to such registration.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in SECTIONS 8(a) and
(b), such indemnified party will, if a claim in respect thereof is made against
an indemnifying party, give written notice to the latter of the commencement of
such action. In case any such action is brought against an indemnified party,
the indemnifying party will 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
-13-
15
defense thereof, the indemnifying party shall not be responsible for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof; PROVIDED, HOWEVER, that if any indemnified party shall
have reasonably concluded that there may be one or more legal or equitable
defenses available to such indemnified party which are additional to or conflict
with those available to the indemnifying party, or that such claim or litigation
involves or could have an effect upon matters beyond the scope of the indemnity
agreement provided in this SECTION 8, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party
and such indemnifying party shall reimburse such indemnified party and any
Person controlling such indemnified party for that portion of the fees and
expenses of any counsel retained by the indemnified party which are reasonably
related to the matters covered by the indemnity agreement provided in this
SECTION 8. The indemnifying party shall not be liable to indemnify any
indemnified party for any settlement of any claim or action effected without the
consent of the indemnifying party. The indemnifying party may not settle any
claim or action brought against an indemnified party unless such indemnified
party is released from all and any liability as part of such settlement.
(d) If the indemnification provided for in this SECTION 8 is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, claim, damage, liability or action referred to herein, then
the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amounts paid or payable by such indemnified
party as a result of such loss, claim, damage, liability or action in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions which resulted in such loss, claim, damage,
liability or action as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party 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 by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
-14-
16
9. UNDERWRITING AGREEMENT.
Notwithstanding the provisions of SECTIONS 5 through 8, to the extent
that the Investors shall enter into an underwriting or similar agreement, which
agreement contains provisions covering one or more issues addressed in such
SECTIONS, the provisions contained in such SECTIONS addressing such issue or
issues shall be of no force or effect with respect to such registration, but
this provision shall not apply to the Corporation if the Corporation is not a
party to the underwriting or similar agreement.
10. INFORMATION BY HOLDER.
Each holder of Registrable Shares to be included in any such
registration shall furnish to the Corporation and the managing underwriter such
written information regarding such holder and the distribution proposed by such
holder as the Corporation or the managing underwriter may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement.
11. EXCHANGE ACT COMPLIANCE.
From the Registration Date or such earlier date as a registration
statement filed by the Corporation pursuant to the Exchange Act relating to any
class of the Corporation's securities shall have become effective, the
Corporation shall comply with all of the reporting requirements of the Exchange
Act applicable to it (whether or not it shall be required to do so) and shall
comply with all other public information reporting requirements of the
Commission which are conditions to the availability of Rule 144 for the sale of
the Common Stock. The Corporation shall cooperate with each Investor in
supplying such information as may be necessary for such Investor to complete and
file any information reporting forms presently or hereafter required by the
Commission as a condition to the availability of Rule 144.
12. MERGERS, ETC.
The Corporation shall not, directly or indirectly, enter into any
merger, consolidation or reorganization in which the Corporation shall not be
the surviving corporation unless the surviving corporation shall, prior to such
merger, consolidation or reorganization, agree in writing to assume the
obligations of the Corporation under this Agreement, and for that purpose
references hereunder to "REGISTRABLE SHARES" shall be deemed to include the
shares of common stock, if any, that holders of Registrable Shares would be
entitled to receive in exchange for Common Stock under any such merger,
consolidation or reorganization; PROVIDED, HOWEVER, that, to the extent holders
of
-15-
17
Registrable Shares receive securities that are by their terms convertible into
shares of common stock of the issuer thereof, then only such shares of common
stock as are issued or issuable upon conversion of said convertible securities
shall be included within the definition of "REGISTRABLE SHARES."
13. NEW CERTIFICATES.
As expeditiously as possible after the effectiveness of any
registration statement filed pursuant to this Agreement, the Corporation will
deliver in exchange for any legended certificate evidencing Restricted Shares so
registered, new stock certificates not bearing any restrictive legends, provided
that in the event less than all of the Restricted Shares evidenced by such
legended certificate are registered, the holder thereof agrees that a new
certificate evidencing such unregistered shares will be issued bearing the
appropriate restrictive legend.
14. NO CONFLICT OF RIGHTS.
The Corporation represents and warrants that the registration rights
granted to the Investors hereby do not conflict with or impair any other
registration rights granted by the Corporation. The Corporation shall not, after
the date hereof, grant any registration rights which conflict with or impair the
registration rights granted hereby, including, but not limited to, (i)
registration rights superior to the registration rights granted herein, and (ii)
registration rights that would allow any Person to register any Registrable
Shares or Other Shares in a registration initiated under SECTIONS 2 or 4 other
than in the manner and priority contemplated by such SECTIONS.
15. TERMINATION.
This Agreement shall terminate and be of no further force or effect
when there shall no longer be any Restricted Shares outstanding.
16. SUCCESSORS AND ASSIGNS.
This Agreement shall bind and inure to the benefit of the Corporation
and the Investors and, subject to SECTION 17, their respective successors and
assigns.
17. ASSIGNMENT.
Each Investor may assign its rights hereunder to any purchaser or
transferee from such Investor of Restricted Shares; PROVIDED, HOWEVER, that such
purchaser or transferee shall, as a condition to the effectiveness of such
assignment, be required to execute an Investor Joinder, whereupon such purchaser
or transferee shall have the benefits of, and shall be subject to the
restrictions contained in, this Agreement as if such
-16-
18
purchaser or transferee was originally included in the definition of "INVESTOR"
herein and had originally been a party hereto.
18. SEVERABILITY.
It is the desire and intent of the parties hereto that the provisions
of this Agreement be enforced to the fullest extent permissible under the laws
and public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated
by a court of competent jurisdiction to be invalid, prohibited or unenforceable
for any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
19. ENTIRE AGREEMENT.
This Agreement contains the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior arrangements or
understandings with respect thereto.
20. NOTICES.
All notices or other communications which are required or otherwise
delivered hereunder shall be in writing and shall be deemed to have been duly
given if (a) personally delivered or sent by telecopier, (b) sent by nationally
recognized overnight courier or (c) sent by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
-17-
19
If to the Corporation, to:
Exchange Applications, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
with a copy to:
Xxxxxxx, Xxxx & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
If to an Investor, at his or its address set forth on SCHEDULE I
hereto.
or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such notice
or communication shall be deemed to have been received (i) when delivered, if
personally delivered or sent by telecopier, (ii) on the first Business Day after
dispatch, if sent by nationally recognized, overnight courier guaranteeing next
Business Day delivery and (iii) on the fifth Business Day following the date on
which the piece of mail containing such communication is posted, if sent by
mail.
-18-
20
21. MODIFICATIONS; AMENDMENTS; WAIVERS.
The terms and provisions of this Agreement may not be modified or
amended, nor may any provision applicable to the Investors be waived, except
pursuant to a writing signed by (i) the Corporation, (ii) a Majority of the
Insight Investors, (iii) a Majority of the Insight II Investors and (iv) the
holders of at least a majority of the Restricted Shares (on a Common Stock
Equivalent basis) held by all Investors (unless such amendment, modification or
waiver affects such Investors in the same fashion as all Investors). The failure
of any party to enforce any of the provisions of this Agreement shall in no way
be construed as a waiver of such provisions and shall not affect the right of
such party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
22. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the domestic laws of the Commonwealth of Massachusetts, without giving effect to
any choice of law or conflicting provision or rule (whether of the Commonwealth
of Massachusetts or any other jurisdiction) that would cause the laws of any
jurisdiction other than the Commonwealth of Massachusetts to be applied, except
to the extent that this Agreement relates to the internal affairs of the
Corporation, which shall be governed by and construed in accordance with the
laws of the State of Delaware without giving effect to any choice of law or
conflicting provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the laws of any jurisdiction other than the State
of Delaware to be applied to such matters. In furtherance of the foregoing, the
internal law of the Commonwealth of Massachusetts or the State of Delaware, as
the case may be, shall control the interpretation and construction of this
Agreement, even if under such jurisdiction's choice of law or conflict of law
analysis, the substantive law of some other jurisdiction would ordinarily apply.
23. COUNTERPARTS; VALIDITY.
This Agreement may be executed in any number of counterparts, and each
such counterpart hereof shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement. The failure of
any Person holding Registrable Shares to execute this Agreement does not make it
invalid as against any other Person holding Registrable Shares.
-19-
21
24. HEADINGS.
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
* * * * *
-20-
22
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first written above.
EXCHANGE APPLICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------
Xxxxxx X. Xxxxxxx
President
23
INVESTORS:
INSIGHT VENTURE PARTNERS I, L.P.
BY: INSIGHT VENTURE ASSOCIATES, LLC,
its general partner
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title:
INSIGHT CAPITAL PARTNERS II, L.P.
BY: INSIGHT VENTURE ASSOCIATES II, LLC,
its general partner
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title:
24
WEXFORD INSIGHT LLC
BY: WEXFORD MANAGEMENT LLC,
its investment manager
By: /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: Principal
CYRK, INC.
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx
Title: President
25
INVESTORS:
GRANT & PARTNERS LIMITED PARTNERSHIP
BY: GRANT & PARTNERS, INC.,
its general partner
By: /s/ Xxxx X. X. Xxxxx
-----------------------------------------
Name: Xxxx X. X. Xxxxx
Title: President, Grant & Partners, Inc.
/s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxx XxXxxxxxx
---------------------------------------------
Xxxxxxx XxXxxxxxx
