EXHIBIT 99.4
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FOURTH AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JULY 26, 2001,
AMONG
EXCHANGE APPLICATIONS, INC.
AND
THE
INVESTORS
IDENTIFIED HEREIN
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TABLE OF CONTENTS
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Page
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SECTION 1. DEFINITIONS...................................................1
SECTION 2. REQUIRED REGISTRATION.........................................3
SECTION 3. PIGGYBACK REGISTRATION........................................5
SECTION 4. REGISTRATIONS ON FORM S-3 AND PURSUANT TO RULE 415............6
SECTION 5. HOLDBACK AGREEMENT............................................7
SECTION 6. PREPARATION AND FILING........................................8
SECTION 7. EXPENSES.....................................................10
SECTION 8. INDEMNIFICATION..............................................10
SECTION 9. UNDERWRITING AGREEMENT.......................................13
SECTION 10. INFORMATION..................................................13
SECTION 11. EXCHANGE ACT COMPLIANCE......................................13
SECTION 12. NO CONFLICT OF RIGHTS........................................13
SECTION 13. TERMINATION..................................................14
SECTION 14. SUCCESSORS AND ASSIGNS.......................................14
SECTION 15. ASSIGNMENT; INVESTOR REPRESENTATIVE..........................14
SECTION 16. ENTIRE AGREEMENT.............................................14
SECTION 17. NOTICES......................................................14
SECTION 18. MODIFICATIONS; AMENDMENTS; WAIVERS...........................16
SECTION 19. COUNTERPARTS.................................................16
SECTION 20. HEADINGS.....................................................16
SECTION 21. GOVERNING LAW................................................16
i
FOURTH AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (the
"Agreement"), dated as of July 26, 2001, among EXCHANGE APPLICATIONS, INC., a
Delaware corporation (the "Corporation"), and INVESTORS (as herein defined).
The Investors and the Corporation are party to the Third Amended and
Restated Registration Rights Agreement, dated June 1, 2001 (the "Third Amended
and Restated Registration Rights Agreement").
The Investors and the Corporation hereby desire to amend and restate
the Third Amended and Restated Registration Rights Agreement as hereinafter set
forth.
The Investors own or have the right to purchase or otherwise acquire
shares of the capital stock of the Corporation. 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
Common Stock. To that end, the Corporation and the Investors hereby set forth
this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and obligations hereinafter set forth, the Corporation and the Investors hereby
agree as follows:
Definitions.
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As used in this Agreement, the following terms shall have the
following meanings:
"April 16 Warrant" means the Warrant dated as of April 16, 2001,
issued by the Corporation to the Investors.
"Business Day" means any day that is not a Saturday, Sunday,
legal holiday or other day on which banks are required to be closed in New York
and Massachusetts.
"Closing Date" means the date hereof.
"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 per
share, of the Corporation.
"Convertible Debentures" means, collectively, the (i) U.S.
$7,241,307.37 million principal amount 12% Senior Subordinated Convertible
Debenture, plus any accrued and unpaid
interest thereon, and (ii) U.S. $5,000,000.00 principal amount 12% Senior
Subordinated Convertible Debenture, plus any accrued and unpaid interest
thereon, each of (i) and (ii) dated as of July 26, 2001, issued by the
Corporation to the Investors.
"Corporation" shall have the meaning ascribed to such term in
the Caption.
"Counsel" shall have the meaning ascribed to such term in
Section 6(b).
"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.
"Information" shall have the meaning ascribed to such term in
Section 6(i).
"Inspectors" shall have the meaning ascribed to such term in
Section 6(i).
"Investor Representative" means Insight Venture Associates IV,
L.L.C., or any successor thereto approved by the Corporation (which approval
shall not be unreasonably withheld).
"Investors" means the Persons set forth on Schedule I and each
additional Person who shall execute a counterpart signature page hereto, and,
subject to Section 15 hereof, includes any successor to, or assignee or
transferee of, any such Person who or which agrees in writing to be treated as
an Investor hereunder and to be bound by the terms and comply with all
applicable provisions hereof.
"June 1 Warrant" means the Warrant dated June 1, 2001, issued by
the Corporation to the Investors.
"Other Shares" means at any time those shares of Common Stock
which do not constitute Primary Shares or Registrable Shares.
"Person" means any individual, partnership, corporation, group,
trust, limited liability company or other legal entity.
"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.
"Records" shall have the meaning ascribed to such term in
Section 6(i).
"Registrable Shares" means, with respect to any Investor, (i)
the shares of Common Stock held by such Investor, (ii) the shares of Common
Stock issuable upon conversion of the Convertible Debentures, (iii) the shares
of Common Stock issuable upon exercise of the April 16 Warrant, (iv) shares of
Common Stock issuable upon exercise of the June 1 Warrant, (v) the shares of
Common Stock issuable upon exercise of the Series A Preferred Stock, which
shares in each of (i), (ii), (iii), (iv) and (v) constitute Restricted Shares.
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"Restricted Shares" means shares of Common Stock held by the
Investors issued or issuable upon conversion of the Convertible Debenture, the
Series A Preferred Stock or upon exercise of the Warrants which have not been
registered under the Securities Act. As to any particular Restricted Shares,
once issued, such Restricted Shares shall cease to be Restricted Shares when (i)
they have been registered under the Securities Act, the registration statement
in connection therewith has been declared effective and they have been disposed
of pursuant to such effective registration statement, (ii) they are eligible to
be sold or distributed pursuant to Rule 144 within any consecutive three-month
period (including, without limitation, Rule 144(k)) without volume limitations,
or (iii) they shall have ceased to be outstanding.
"Registration Statement" means any registration statement of the
Corporation which covers any of the Registrable Shares, and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Requisite Investors" means those Investors who hold in the
aggregate in excess of 50% of the Registrable Shares held by all Investors at
the time in question.
"Rule 144" means Rule 144 promulgated under the Securities Act
or any successor rule thereto or any complementary rule thereto (such as Rule
144A).
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933 or any
successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
"Series A Preferred Stock" means the Series A Convertible
Redeemable Preferred Stock, $.001 par value per share, of the Corporation.
"Shelf Registration" shall have the meaning ascribed to it in 0.
"Silicon Valley Shares" means, collectively, the shares of
Common Stock issuable (i) upon exercise of the Warrant, dated April 24, 2001,
issued by the Corporation to Silicon Valley Bank and (ii) issuable upon exercise
of the Warrant, dated on or about July 26, 2001, issued by the Corporation to
Silicon Valley Bank.
"Warrants" means, collectively, the (i) April 16 Warrant and
(ii) the June 1 Warrant.
Required Registration.
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From and after the 90th day following the Closing Date, if the
Requisite Investors shall in writing state that such holders desire to sell
Registrable Shares in the public securities markets and request the Corporation
to effect the registration under the Securities Act of Registrable Shares, the
Corporation shall promptly use commercially reasonable efforts to effect
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the registration under the Securities Act of the Registrable Shares which the
Corporation has been so requested by the Requisite Investors to register.
Anything contained in Section 2(a) to the contrary notwithstanding,
the Corporation shall not be obligated to effect any registration under the
Securities Act pursuant to Section 2(a) except in accordance with the following
provisions:
The Corporation shall not be obligated to use commercially
reasonable efforts to file and cause to become effective (A) more than
two Registration Statements initiated pursuant to this Section 2(a);
provided, however, that if the Investors were unable to sell at least
90% of the Registrable Shares requested to be included in the last
registration initiated by such group of Investors pursuant to Section
2(a) as a result of an underwriter's cutback, then additional
registrations shall be added to this Section 2(b) until the foregoing
condition is satisfied for such initiating group of Investors, 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 or Other Shares are to be or were sold has been
filed and not withdrawn or has been declared effective within the
prior 90 days.
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 (i) 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
Investors holding Registrable Shares may include such Registrable
Shares pursuant to Section 3 or (ii) the Corporation reasonably
determines that such registration and offering would interfere with
any material transaction involving the Corporation; provided, however,
that the Corporation may only delay the filing or effectiveness of a
registration statement pursuant to this Section 2(b) for a total of 90
days after the date of a request for registration.
With respect to any registration pursuant to this Section 2(a),
the Corporation shall give notice of such registration to the
Investors who do not request registration hereunder and to the holders
of all Other Shares which are entitled to registration rights and 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 Registrable Shares,
Primary Shares and/or Other Shares proposed to be included in such
registration would interfere with the successful marketing (including
pricing) of the Registrable Shares proposed to be included in such
registration, 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:
first, pro rata among (x) the Registrable Shares requested
by the 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 Investor), (y) the Other Shares
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(only to the extent required by an effective Registration Rights
Agreement entered into prior to March 28, 2001 between the
Corporation and the holders of such Other Shares) and (z) the
Silicon Valley Shares;
second, the Primary Shares; and;
third, the Other Shares which are entitled to registration
rights.
A requested registration under Section 2(a) may be rescinded as to
all of the Registrable Shares requested to be so registered prior to such
registration being declared effective by the Commission by written notice from
such Requisite Investors to the Corporation; 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(b)(i)(A) if the
Corporation shall have been reimbursed for all out-of-pocket expenses incurred
by the Corporation in connection with such rescinded registration.
Piggyback Registration.
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From and after the 90th day following the Closing Date, 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), it shall
give written notice to the Investors of its intention to so register such
Primary Shares or Other Shares at least 30 days before the initial filing of
such Registration Statement and, upon the written request, delivered to the
Corporation within 20 days after delivery of any such notice by the Corporation,
of the Investors to include in such registration Registrable Shares (which
request shall specify the number of Registrable Shares proposed to be included
in such registration and shall state that the Investors desire to sell such
Registrable Shares in the public securities markets), the Corporation shall use
commercially reasonable 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:
first, pro rata among (w) the Corporation and the holders of
Other Shares initiating such registration, as the case may be, (x)
Investors requesting their Registrable Shares 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), (y) the Other Shares
(only to the extent required by an effective Registration Rights
Agreement entered into prior to March 28, 2001 between the Corporation
and the holders of such Other Shares) and (z) the Silicon Valley
Shares; and
second, the Other Shares which are entitled to registration
rights and are held by holders who are not initiating such
registration under this Section 3.
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The number of requests permitted by the Investors pursuant to this
Section 3 shall be unlimited.
Registrations on Form S-3 and Pursuant to Rule 415.
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Registration on Form S-3. Anything contained in Section 2 to the
contrary notwithstanding, from and after the 90th day following the Closing
Date, 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, each
Investor holding Registrable Shares then outstanding shall have the right to
request in writing that the Corporation effect the registration of Registrable
Shares on Form S-3 or such successor form, which request or requests shall (i)
specify the number of Registrable Shares intended to be sold or disposed of and
the holders thereof and (ii) state the intended method of disposition of such
Registrable Shares. The Corporation shall use commercially reasonable efforts to
promptly effect the registration under the Securities Act of the Registrable
Shares so requested to be registered. A requested registration on Form S-3 or
any such successor form in compliance with this Section 4(a) shall not count as
a registration statement initiated pursuant to Section 2(a) for purposes of
Section 2 (b)(i)(A) and, except as otherwise expressly provided in this Section
4(a), shall otherwise be subject to Section 2. The number of requests permitted
by the Investors pursuant to this Section 4(a) shall be unlimited; provided,
however, that the Investors shall not be permitted to effect more than one
registration pursuant to this Section 4(a) during any 180-day period.
Registration Pursuant to Rule 415.
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(xxi) Anything contained in 0 to the contrary notwithstanding,
from and after the 90th day following the Closing Date, at such time
as the Corporation shall have qualified for use of a registration
statement filed pursuant to Rule 415 of the Securities Act or such
successor rule, the Requisite Investors shall have the right to
request in writing that the Corporation effect a continuous or delayed
registration of Registrable Shares on a registration statement filed
pursuant to Rule 415 of the Securities Act or such successor rule (a
"Shelf Registration"), which request shall (i) specify the number of
Registrable Shares intended to be sold or disposed of and the holders
thereof and (ii) state the intended method of disposition of such
Registrable Shares. The Corporation shall use commercially reasonable
efforts to promptly effect the registration under the Securities Act
of the Registrable Shares so requested to be registered and shall
cause such registration statement to become and remain effective for
such period as may be reasonably necessary to effect the sale of such
Registrable Securities, but in no event longer than 180 days. A
requested registration made pursuant to this 0 shall not count as a
registration statement initiated pursuant to 0 for purposes of Section
2(b)(i)(A) and, except as otherwise provided on this 4(b), shall
otherwise be subject to 0. The number of requests permitted by the
Investors pursuant to this 0 shall be one.
(xxii) If and whenever the Corporation is required by the
provisions of this 0 to effect the registration of Registrable
Securities under Rule 415 of the Securities Act, the Corporation will:
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prepare and file with the SEC such amendments to such Shelf
Registration and supplements to the prospectus contained therein
as may be necessary to keep such Shelf Registration effective for
such period as may be reasonably necessary to effect the sale of
such Registrable Securities, but in no event longer than 180
days;
(A) prepare and promptly file with the SEC and promptly
notify the Investors of the filing of such amendment or
supplement to such Shelf Registration or prospectus as may be
necessary to correct any statements or omission if, at the time
when a prospectus relating to such Registrable Securities is
required to be delivered under the Securities Act, any event
shall have occurred as the result of which any such prospectus or
any other prospectus as then in effect would include an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading and
promptly provide to the Investors sufficient copies of such
amended or supplemented prospectus so that it can be delivered to
the Investors of the Registrable Securities as required by the
Securities Act and the regulations thereunder;
(B) advise the Investors, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop
order by the SEC suspending the effectiveness of such Shelf
Registration or the initiation or threatening of any proceeding
for that purpose, promptly use its commercially reasonable
efforts to prevent the issuance of any stop order or to obtain
its withdrawal if such stop order should be issued and promptly
notify the Investors of the forbearance, lifting or withdrawal of
such stop order or proceeding;
Holdback Agreement.
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If the Corporation at any time shall register shares of Common Stock
under the Securities Act (including any registration pursuant to Sections 2, 3
or 4 hereof) for sale to the public in an underwritten offering, no Investor
shall sell, make any short sale of, grant any option for the purchase of, or
otherwise dispose of, any Registrable Shares (other than those shares of Common
Stock included in such registration pursuant to Sections 2, 3 or 4 hereof)
without the prior written consent of the Corporation, for a period as shall be
determined by the relevant managing underwriters, which period shall not last
more than 180 days after the effective date of such Registration Statement. From
and after the date hereof, the Corporation shall use commercially reasonable
efforts to 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 (or similar
provisions of a separate agreement) as if such Person were an Investor.
If the Corporation at any time pursuant to Sections 2 or 3 of this
Agreement shall register under the Securities Act Registrable Shares held by the
Investors for sale to the public pursuant to an underwritten offering, the
Corporation shall not effect any public sale or distribution of securities
similar to those being registered, or any securities convertible into or
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exercisable or exchangeable for such securities, for such period as shall be
determined by the Corporation and the managing underwriters, which period shall
not be less than 5 days.
Preparation and Filing.
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If and whenever the Corporation is under an obligation pursuant to
the provisions of this Agreement to effect the registration of any Registrable
Shares, the Corporation shall, as expeditiously as practicable:
use commercially reasonable 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);
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 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 amendments or successive drafts of the same
document proposed to be filed so long as such amendments or successive drafts
are supplied to Counsel in advance of the proposed filing by a period of time
that is customary and reasonable under the circumstances);
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 an additional period of 90 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;
promptly notify Counsel in writing (i) of 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)
of the receipt by the Corporation of any notification with respect to 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 (iii) of
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;
use its best efforts to register or qualify such Registrable
Shares under such other securities or blue sky laws of such jurisdictions as the
holders of the Registrable Shares reasonably request and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
holders to consummate the disposition in such jurisdictions of such holders'
Registrable Shares; provided, however, that the Corporation will not be required
to qualify generally to do business, subject itself to general taxation or
consent to general service of
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process in any jurisdiction where it would not otherwise be required to do so
but for this paragraph (e);
furnish to the holders of such 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 holders may reasonably request in order to
facilitate the public sale or other disposition of such Registrable Shares;
without limiting subsection (e) above, use its best efforts to
cause such Registrable Shares to be registered with or approved by such other
governmental agencies or authorities of the United States as may be necessary by
virtue of the business and operations of the Corporation to enable the holders
of such Registrable Shares to consummate the disposition of such Registrable
Shares;
notify the holders of such Registrable Shares on a timely basis
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
subparagraph (a) of this Section 6, 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 light of the circumstances then existing and, at the request
of such holders, prepare and furnish to such 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 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;
make available upon reasonable notice and during normal business
hours, for inspection by any underwriter participating in any disposition
pursuant to such Registration Statement and any attorney, accountant or other
agent retained by the underwriter (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 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 (iii) such Information has been made
generally available to the public, and the Investors agree that they 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;
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if required by the underwriters, use commercially reasonable
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;
if required by the underwriters, use commercially reasonable
efforts to obtain from its counsel an opinion or opinions in customary form;
provide a transfer agent and registrar (which may be the same
entity and which may be the Corporation) for such Registrable Shares;
issue to any underwriter to which the holders of such Registrable
Shares may sell shares in such offering certificates evidencing such Registrable
Shares;
use commercially reasonable efforts to qualify such Registrable
Shares for listing on the Nasdaq Stock Market or such other national securities
exchange on which the Corporation shall from time to time list its securities;
otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission; and
subject to all the other provisions of this Agreement, use
commercially reasonable efforts to take all other commercially reasonable steps
necessary to effect the registration of such Registrable Shares contemplated
hereby.
Each holder of the Registrable Shares upon receipt of any notice from
the Corporation of any event of the kind described in Section 6(h) hereof, shall
forthwith discontinue disposition of the Registrable Shares pursuant to the
registration statement covering such Registrable Shares until such holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 6(h) hereof, and, if so directed by the Corporation, such holder shall
deliver to the Corporation all copies, other than permanent file copies then in
such holder's possession, of the prospectus covering such Registrable Shares at
the time of receipt of such notice.
Expenses.
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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 National Association of Securities Dealers,
Inc.), fees and expenses of complying with securities and blue sky laws,
printing expenses, fees and expenses of the Corporation's counsel and
accountants and reasonable fees and expenses of Counsel shall be paid by the
Corporation.
Indemnification.
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In connection with any registration of any Registrable Shares under
the Securities Act pursuant to this Agreement, the Corporation shall indemnify
and hold harmless the holders of Registrable Shares, each underwriter, broker or
any other Person acting on behalf of the holders of Registrable Shares, and each
other Person, if any, who controls any of the foregoing
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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 the holders of Registrable Shares, such
underwriter, such broker or such other Person acting on behalf of the holders of
Registrable Shares and each such controlling Person for any legal or other
expenses reasonably incurred by any of them in connection with 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 (including any legal or other
expenses incurred) 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 by the holders of Registrable Shares or their
counsel or underwriter specifically for use in the preparation thereof; provided
further, however, that the foregoing indemnity agreement is subject to the
condition that, insofar as it relates to any untrue statement, allegedly untrue
statement, omission or alleged omission made in any preliminary prospectus but
eliminated or remedied in the final prospectus (filed pursuant to Rule 424 of
the Securities Act), such indemnity agreement shall not inure to the benefit of
any Investor, underwriter, broker or other Person acting on behalf of holders of
the Restricted Shares, from whom the Person asserting any loss, claim, damage,
liability or expense purchased the Restricted Shares which are the subject
thereof, if a copy of such final prospectus had been made available to such
Person and such Investor, underwriter, broker or other Person acting on behalf
of holders of the Registrable Shares and such final prospectus was not delivered
to such Person with or prior to the written confirmation of the sale of such
Registrable Shares to such Person.
In connection with any registration of Registrable Shares under the
Securities Act pursuant to this Agreement, each holder 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 the preceding paragraph of this Section
8) 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 the holders of Registrable Shares and each
Person who controls any of the foregoing Persons within the meaning of the
Securities Act with respect to any
-11-
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 specifically for use in
connection with the preparation of such registration statement, preliminary
prospectus, final prospectus, amendment, supplement or document; 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.
Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in the preceding
paragraphs of this Section 8, 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. The failure of any indemnified party to
notify an indemnifying party of any such action shall not (unless such failure
shall have a material adverse effect on the indemnifying party) relieve the
indemnifying party from any liability in respect of such action that it may have
to such indemnified party on account of this Section 8. 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 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 (but shall have the right to participate therein with counsel
of its choice) 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 is
reasonably related to the matters covered by the indemnity agreement provided in
this Section 8. If the indemnifying party is not entitled to, or elects not to,
assume the defense of a claim, it will not be obligated to pay the fees and
expenses of more than one counsel with respect to such claim.
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
-12-
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. The parties agree that it would not be just
and equitable if contribution pursuant hereto were determined by pro rata
allocation or by any other method or allocation which does not take account of
the equitable considerations referred to herein. No Person guilty of fraudulent
misrepresentation shall be entitled to contribution from any Person.
Underwriting Agreement.
----------------------
Notwithstanding the provisions of Sections 5, 6, 7 and 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 agreement addressing such issue
or issues shall control; provided, however, that any such agreement to which the
Corporation is not a party shall not be binding upon the Corporation. No holder
may participate in any underwritten registration hereunder unless such holder
(a) agrees to sell such holder's securities on the basis provided in any
underwriting arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably and customarily required under the terms of such underwriting
arrangements.
Information.
-----------
Each Investor shall furnish to the Corporation such written
information regarding such Person and the distribution proposed by such Person
as the Corporation may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Agreement.
Exchange Act Compliance.
-----------------------
The Corporation shall use commercially reasonable efforts to 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 to 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 the Investors supplying such information as may
be necessary for the Investors to complete and file any information reporting
forms presently or hereafter required by the Commission as a condition to the
availability of Rule 144.
No Conflict of Rights.
---------------------
The Corporation shall not, after the date hereof, grant any
registration rights which conflict with or impair the registration rights
granted hereby.
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Termination.
-----------
This Agreement shall terminate and be of no further force or effect
when there shall no longer be any Registrable Shares outstanding.
Successors and Assigns.
----------------------
This Agreement shall bind and inure to the benefit of the Corporation
and the Investors and, subject to Section 15, the respective successors and
assigns of the Corporation and the Investors.
Assignment; Investor Representative.
-----------------------------------
Each Investor may assign its rights hereunder to (i) its limited
partners or any Affiliate of such Investor or (ii) any purchaser or transferee
from such Investor of Restricted Shares with the consent of the Corporation;
provided, however, that any such purchaser or transferee shall, as a condition
to the effectiveness of such assignment, be required to execute a counterpart to
this Agreement agreeing to be treated as an Investor, whereupon such purchaser
or transferee shall have the benefits of, and shall be subject to the
restrictions contained in, this Agreement as if such purchaser or transferee had
originally been a party hereto and was originally included in the definition of
an Investor herein.
A decision, act, consent or instruction of the Investor
Representative in respect of any action hereunder shall constitute a decision of
all holders of Registrable Shares and shall be final, binding and conclusive
upon each such holder of Registrable Shares and the Corporation may rely upon
any decision, act consent or instruction of the Investor Representative
hereunder as being the decision, act, consent or instruction of each and every
such holder of Registrable Shares. Notice delivered to the Investor
Representative shall for all purposes constitute notice of all holders of
Registrable Shares. The foregoing shall be binding upon all holders of
Registrable Shares and all transferees and assignees thereof.
Entire Agreement.
----------------
This Agreement and the other writings referred to herein or therein
or delivered pursuant hereto or thereto, contain the entire agreement among the
Investors and the Corporation with respect to the subject matter hereof and
supersede all prior and contemporaneous arrangements or understandings with
respect thereto, including, without limitation, the Amended and Restated
Registration Rights Agreement, all of which are hereby automatically terminated
in their entirety and of no further force or effect, without any action by the
parties thereto.
Notices.
-------
All notices, requests, consents and other communications hereunder to
any party shall be deemed to be sufficient if contained in a written instrument
delivered in person or sent by telecopy, nationally-recognized overnight courier
or first class registered or certified mail, return receipt requested, postage
prepaid, addressed to such party at the address set forth below or such other
address as may hereafter be designated in writing by such party to the other
parties:
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if to the Corporation, to:
Exchange Applications, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000-0000
Attention: Xxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Investors, to:
InSight Venture Partners
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
X'Xxxxxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxx X. Nissan, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
All such notices, requests, consents and other communications shall be deemed to
have been delivered (a) in the case of personal delivery or delivery by
telecopy, on the date of such delivery, (b) in the case of dispatch by
nationally-recognized overnight courier, on the next Business Day following such
dispatch and (c) in the case of mailing, on the third Business Day after the
posting thereof.
-15-
Modifications; Amendments; Waivers.
----------------------------------
The terms and provisions of this Agreement may not be modified or
amended, nor may any provision be waived, except pursuant to a writing signed,
in the case of a modification or amendment, by the Corporation and the
Investors, or in the case of a waiver, by the party against whom the waiver is
to be effective.
Counterparts.
------------
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.
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.
Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed wholly therein.
-16-
IN WITNESS WHEREOF, the parties hereto have executed this Third
Amended and Restated Registration Rights Agreement on the date first written
above.
CORPORATION:
------------
EXCHANGE APPLICATIONS, INC.
By: /s/ F. Xxxxxx Xxxxx
-----------------------------------------
Name: F. Xxxxxx Xxxxx
Title: CSO
PURCHASERS:
-----------
INSIGHT VENTURE PARTNERS IV, L.P.
INSIGHT VENTURE PARTNERS (CAYMAN) IV, L.P.
INSIGHT VENTURE PARTNERS IV (FUND B), L.P.
INSIGHT VENTURE PARTNERS IV (CO-INVESTORS), L.P.
By: Insight Venture Associates IV, L.L.C.,
the general partner to each of the above-
referenced entities:
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
-17-
SCHEDULE 1
Investors
---------
Insight Venture Partners IV, L.P.
Insight Venture Partners (Cayman) IV, L.P.
Insight Venture Partners IV (Fund B), L.P.
Insight Venture Partners IV (Co-investors), L.P.
-18-
--------
1 The Company to confirm the Capitalization.
