WEBORDER REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of March 23, 2000 by and among Netopia, Inc., a Delaware corporation
("Netopia"), and the persons and entities listed on Exhibit A attached hereto
(the "Stockholders," and each individually a "Stockholder"), each of whom
immediately prior to the effective time of the Merger (defined below) was a
stockholder of WebOrder, a California corporation ("WebOrder").
BACKGROUND
A. WebOrder, Netopia and WO Merger Corporation, a Delaware corporation
("Sub") and a wholly-owned subsidiary of Netopia, have entered into an Agreement
and Plan of Reorganization dated as of February 22, 2000 (the "Plan"), pursuant
to which WebOrder shall merge with and into Sub in a forward triangular merger
(the "Merger"), with Sub to be the surviving corporation. The capitalized terms
used in this Agreement and not otherwise defined herein will have the meanings
given them in the Plan.
B. As a condition to the consummation of the Merger, the Plan provides
that each Stockholder who executes and delivers this Agreement shall be granted
certain registration rights with respect to those shares of Common Stock, $0.001
par value of Netopia ("Common Stock") issued to such Stockholders in the Merger,
on the terms, and subject to the conditions and limitations set forth in this
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises hereinafter set forth, the parties hereto agree as follows:
Section 1. Incidental Registration Rights
1.1 Definitions. For the purposes of this Agreement, the following
words shall have the meanings set forth below:
"Company" means Netopia.
"Holder" means any Stockholder owning of record at the time in
question, Registrable Shares and any Person to whom Holder's registration rights
hereunder are validly transferred and assigned pursuant to the provisions of
this Agreement.
"Person" includes an individual, partnership, trust, corporation,
limited liability company, joint venture, association, government, government
bureau or agency or other entity of whatsoever kind or nature.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act.
"Registrable Stock" means (x) the shares of Common Stock issued
pursuant to the Plan, and (y) any shares issued or issuable with respect to the
securities identified in clause (x) above by reason of a stock dividend or stock
split or in connection with a combination of shares of Common Stock, merger,
consolidation or other reorganization. Each share of Registrable Stock shall
cease to be Registrable Stock when transferred pursuant to a registered public
offering or which is transferred, or which in the reasonable opinion of Netopia
may be transferred without volume restrictions, pursuant to Rule 144 promulgated
by the Securities and Exchange Commission (the "Commission") under the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
1.2 Incidental Registration.
(a) If the Company at any time proposes to register on a firmly
underwritten public offering basis any of its shares of Common Stock to be
offered for cash for its own account pursuant thereto (other than a registration
requested pursuant to registration rights held by other shareholders, a
registration relating to employee benefit plans or agreements or a registration
relating to a transaction described in Rule 145 promulgated under the Securities
Act and excluding any registration involving any convertible debt or equity
securities), it shall give written notice (the "Company's Notice"), at its
expense, to all holders of Registrable Stock of its intention to do so at least
15 days if practicable, but in all events at least 10 days, prior to the filing
of a registration statement with respect to such registration with the
Commission. If any holder of Registrable Stock desires to dispose of all or part
of such stock, it may request registration thereof in connection with the
Company's registration by delivering to the Company, within eight (8) days after
delivery of the Company's Notice, written notice of such request (the "Holder's
Notice") stating the number of shares of Registrable Stock that Holder desired
to be included in the registration. The Company shall use its best efforts to
cause all shares of Registrable Stock specified in the Holder's Notice to be
registered under the Securities Act so as to permit the sale or other
disposition by such holder or holders of the shares so registered, subject
however, to the limitations contained in this Agreement.
(b) Notwithstanding anything to the contrary herein, Netopia shall
have no obligations pursuant to this Section 1 with respect to any shares of
Registrable Stock proposed to be sold by a Holder in a registration pursuant to
Section 1.2 if, in the reasonable opinion of counsel to Netopia, all such shares
of Registrable Stock proposed to be sold by a Holder may be sold without
registration under the Securities Act pursuant to Rule 144 under the Securities
Act (assuming, for this purpose, that if "current public information" (as
defined in Rule 144 (c) of the Commission under the Securities Act) is available
with respect to the Company as of the date of such opinion, it will remain so
available).
1.3 Limitations on Incidental Registration.
(a) The Company shall have the right to limit the aggregate size of
the offering or the number of shares of Registrable Stock to be included therein
by the Holders, if requested to do so in good faith by the managing
underwriter(s) of the offering; provided, however, that in no event shall the
amount of securities of a selling Holder included in the
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offering be reduced below twenty percent (20%) of the total amount of securities
that the Holder requested to be included in the offering. Only securities which
are to be included in the underwriting may be included in the registration.
(b) Whenever the number of shares of Registrable Stock which may be
registered hereunder is limited by the provisions of paragraph (a) above, the
Company will include in such registration, (i) first, the securities the Company
proposes to sell, and (ii) second, on a pro rata basis (based on the number of
shares held) shares requested to be sold by Holders of Registrable Stock and
other stockholders requesting inclusion of shares in the registration, to the
extent that such treatment is not inconsistent with or does not otherwise
conflict with or require consents or waivers under other contractual
registration rights (in which case shares of Registrable Stock shall first be
excluded).
(c) Notwithstanding anything to the contrary contained in this
Section, the Company may decide, in its sole and absolute discretion, not to
proceed with or to discontinue any registration commenced or proposed to be
commenced hereunder.
1.4 Registration Procedures.
(a) If and when the Company is required by the provisions of this
Agreement to use its best efforts to effect the registration of shares of
Registrable Stock, the Company shall:
(1) furnish to each holder of shares of Registrable Stock
selling shares in the registration (a "Prospective Seller") such number of
copies of each prospectus, including preliminary prospectuses, in conformity
with the requirements of the Securities Act, and such other documents, as the
Prospective Seller may reasonably request in order to facilitate the public sale
or other disposition of the shares of Registrable Stock owned by it;
(2) use its best efforts to cause all such Registrable Stock
to be listed on each securities exchange on which similar securities issued by
the Company are then listed.
(b) It will be a condition precedent to the obligations of Netopia
to register any shares of Registrable Stock pursuant to this Agreement that
Holder furnish to Netopia and the underwriters for inclusion in the registration
statement (and prospectus included therein) such information regarding Holder
and the Registrable Shares and the intended method of disposition of such
securities as Netopia or the underwriters may reasonably request.
(c) The Prospective Sellers shall not (until further notice) effect
sales of the shares of Registrable Stock covered by the registration statement
after receipt of telegraphic or written notice from the Company to suspend sales
to permit the Company to correct or update a registration statement or
prospectus.
1.5 Expenses of Registration. The expenses incurred in effecting any
registration requested pursuant to this Agreement, including, without
limitation, all registration and filing fees, printing expenses, expenses of
compliance with blue sky laws, fees and disbursements of counsel for the
Company, and expenses of any audits incidental to or required by any such
registration, and the fees and disbursements up to $15,000 of one counsel for
all of the selling
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stockholders selected by them with the approval of the Company, which approval
shall not be unreasonably withhheld ("Registration Expenses"), shall be borne by
the Company; provided, however, that each Prospective Seller shall bear its own
legal expenses if it retains separate counsel other than as described in the
preceding clause of the sentence, and all underwriting discounts or brokerage
fees or commissions relating to the sale of its Registrable Stock.
1.6 Indemnification and Contribution. (a) The Company shall indemnify each
Holder who sells Registrable Stock in a registration ("Selling Stockholder")
(and each person, if any, who controls such Selling Stockholder) against all
losses, damages, expenses and liabilities ("Losses") arising out of or based on
any claim, action or proceeding arising out of or based on untrue statement (or
alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document incident to the offering, or any omission
(or alleged omission) to state a material fact required to be stated or
necessary to make the statements contained in any such document not misleading,
or any violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company (a "Claim"), and shall reimburse such
Selling Stockholder (and each person, if any, who controls such Selling
Stockholder) for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such Claim; provided, however,
that the Company shall not be liable to the extent that any Claim arises out of
or is based on any untrue statement or omission based upon written information
furnished to the Company by such Selling Stockholder specifically for use in
such document.
(b) Each Selling Stockholder shall indemnify the Company and its
officers and directors against all Losses arising out of or based on any Claim,
and shall reimburse the Company and its officers and directors for any legal and
any other expenses reasonably incurred in connection with investigating or
defending any such Claim; provided, however, that such statement or omission was
made in reliance upon and in conformity with information furnished to the
Company in writing by such Selling Stockholder specifically for use in such
document. In no event shall the liability of a Selling Stockholder exceed the
net amount received by such Selling Stockholder upon the sale of Registrable
Stock pursuant to such registration.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a Claim, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action or
proceeding; provided, however, that the failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding subdivisions of this Section, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless the indemnified party has been advised in writing by counsel that a
conflict of interest between such indemnified and indemnifying parties is
reasonably likely to exist in respect of such claim, the indemnifying party
shall be entitled to participate in and to assume the defense of the claim, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation unless the
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indemnified party has been advised in writing by counsel that a conflict of
interest between such indemnified and indemnifying parties arises in respect of
such claim and the indemnified party notifies the indemnifying party of such
advice and the basis therefor. No indemnifying party shall be liable for any
settlement of any Claim effected without its written consent, which consent
shall not be unreasonably withheld. No indemnifying party shall, without the
consent of the indemnified party, consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect of such Claim.
(d) If the indemnification provided for in this Section is held to
be unavailable by a court of competent jurisdiction to an indemnified party in
respect of any Claims, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party in connection with such Claims, in such
proportion as is appropriate to reflect the relative fault of the Company, on
the one hand, and the Selling Stockholder, on the other hand, in connection with
the statements or omissions which resulted in such Claims, as well as any other
relative equitable considerations. The relative fault of the Company, on the one
hand, and of such Selling Stockholder, on the other hand, 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 Company, on the one hand, or by such
Selling Stockholder, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation.
1.7 Market Stand-Off Agreements. Each Holder hereby agrees that, without
the prior written consent of the managing underwriters (the "Underwriters") of a
firm commitment underwritten public offering of securities by Netopia in which
such Holder participates after the date of this Agreement (the "Public
Offering"), and except for any securities sold by the Holder in such Public
Offering, Holder will not, during the period commencing on the date on which
Netopia notifies such Holder of its intention to effect such a Public Offering
(but only if the Holder actually participates as a selling stockholder in the
Public Offering) and ending 90 days after the date of the final prospectus
relating to the Public Offering (the "Prospectus"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall apply only to the first Public
Offering completed after the date hereof and only if the Holder actually
participates as a selling stockholder in the Public Offering, and shall not
apply to (a) the sale of any Shares to the Underwriters pursuant to any
underwriting agreement entered into in connection with the Public Offering, or
(b) transactions relating to shares of Common Stock or other securities acquired
in open market transactions after the completion of the Public Offering. In
addition, Holder agrees that, without the prior written
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consent of the Underwriters, Holder will not, during the period commencing on
the date the registration statement relating to the Public Offering is filed and
ending 90 days after the date of the Prospectus, make any demand for or exercise
any right with respect to, the registration of any shares of Common Stock or any
security convertible into or exercisable or exchangeable for Common Stock.
Notwithstanding the foregoing, if Holder is an individual, he or she may
transfer any shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock either during his or her lifetime
or on death by will or intestacy to his or her immediate family or to a trust
the beneficiaries of which are exclusively the undersigned and/or a member or
members of his or her immediate family; provided further, if Holder is a
partnership, it may transfer any shares of Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock to a partner of
such partnership or a retired partner of such partnership who retires after the
date hereof, or to the estate of any such partner or retired partner, and any
partner who is an individual may transfer such shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock
either during his or her lifetime or on death by will or intestacy to his or her
immediate family or to a trust the beneficiaries of which are exclusively the
undersigned and/or a member or members of his or her immediate family; provided,
however, that prior to any transfer pursuant to this paragraph, each transferee
shall execute an agreement, satisfactory to the Underwriters, pursuant to which
each transferee shall agree to receive and hold such shares of Common Stock, or
securities convertible into or exchangeable or exercisable for Common Stock,
subject to the provisions hereof, and there shall be no further transfer except
in accordance with the provisions hereof. For the purposes of this paragraph,
"immediate family" shall mean spouse, lineal descendant, father, mother, brother
or sister of the transferor.
1.8 Limitations on Registrations of Shares of Registrable Stock. The
Company shall not be required to effect any registration of Shares of
Registrable Stock if it shall deliver to each selling Stockholder an opinion of
counsel to the effect that all Shares of Registrable Stock held by such selling
Stockholder may be sold immediately in the public market without registration
under the Securities Act and any applicable state securities laws.
Section 2. Assignment and Amendment.
2.1 Assignment. The rights to cause the Company to register Registrable
Securities pursuant to this Agreement may be assigned (but only with all related
obligations) by a holder to a transferee or assignee of all of such Holder's
Registrable Securities, provided the Company is, within a reasonable time after
such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee of assignee is
restricted under the Securities Act. Otherwise, the rights of a Holder under
this Agreement may be assigned only with Netopia's express prior written
consent, which may be withheld in Netopia's sole discretion; provided, however,
that the rights of a Holder under this Agreement may be assigned without
Netopia's express prior written consent: (a) to a Permitted Assignee (as defined
below); or (b) (if applicable) by will or by the laws of intestacy, descent or
distribution, provided that any assignee described in this sentence agrees in
writing to be bound by all the obligations of the Holders under this Agreement.
Any attempt to assign any rights of a
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Holder under this Agreement without Netopia's express prior written consent in a
situation in which such consent is required by this Section shall be null and
void and without effect. Subject to the foregoing restrictions, all rights,
covenants and agreements in this Agreement by or on behalf of the parties hereto
will bind and inure to the benefit of the respective permitted successors and
assigns of the parties hereto. Each of the following parties are "Permitted
Assignees" of a Holder for purposes of this Section 2: (a) a trust whose
beneficiaries consist solely of such Holder or such Holder's immediate family;
(b) the personal representative (such as an executor of such Holder's will),
custodian or conservator of such Holder, in the case of the death, bankruptcy or
adjudication of incompetency of such Holder; (c) partners of such Holder (if
such Holder is a partnership); or (d) another Holder or the Permitted Assigns of
another Holder.
2.2 Amendment of Rights. Any provision of this Agreement may be amended
and the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of Netopia and Holders holding a majority of the aggregate number of
outstanding shares of Registrable Stock held by all Holders at the time of such
amendment or waiver. Any amendment or waiver effected in accordance with this
Section 2.2 shall be binding upon each Holder, each Holder, each permitted
successor or assignee of such Holder or Holder and Netopia; provided, however,
that any such amendment or waiver shall not increase the obligation of any
Holder without the specific written consent of such Holder.
Section 3. Miscellaneous
3.1 Notices. All notices and other communications required or permitted
under this Agreement will be in writing and will be either hand delivered in
person, sent by telecopier, sent by certified or registered first class mail,
postage pre-paid, or sent by nationally recognized express courier service. Such
notices and other communications will be effective upon receipt if hand
delivered, one business day after transmission by telecopier with confirmation
of receipt, three (3) days after mailing if sent by mail, and one (1) day after
dispatch if sent by express courier, to the following addresses, or such other
addresses as any party may notify the other parties in accordance with this
Section. Any notice, request or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered or if deposited in the U.S. mail by registered or certified
mail, return receipt requested, postage prepaid, as follows:
If to Netopia: Netopia, Inc.
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Fax Number: (000) 000-0000
With a copy to: Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
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Attention: C. Xxxxx Xxxxx
Fax: (000) 000-0000
If to the Representative: Ms. Xxxxx Xxxxxxxx
000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000
With a copy to: Venture Law Group
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx, Esq.
Fax: (000) 000-0000
If to a Holder, at such Holder's address as set forth on Exhibit A hereto.
3.2 Entire Agreement. This Agreement constitutes and contains the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes any and all prior negotiations, correspondence,
agreements, understandings, duties or obligations between the parties respecting
the subject matter hereof.
3.3 Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by the laws of the State of Delaware except for those provisions
governing conflict of laws, notwithstanding that one or more of the parties to
this Agreement is now, or may hereafter become, a resident or citizen of a
different State. Each party irrevocably consents to the exclusive jurisdiction
and venue of the state and federal courts for Alameda County, California in
connection with any action to enforce the provisions of this Agreement, to
recover damages or other relief for breach or default of this Agreement, or
otherwise arising under or by reason of this Agreement, and agrees that service
of process in any such action may be effected by the means provided in this
Agreement for delivery of notices.
3.4 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, then such provision(s) shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted as if
such provision(s) were so excluded and shall be enforceable in accordance with
its terms.
3.5 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.
3.6 Successors And Assigns. Subject to the provisions of Section 2.1, the
provisions of this Agreement shall inure to the benefit of, and shall be binding
upon, the successors and permitted assigns of the parties hereto.
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3.7 Captions. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.
3.8 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
3.9 Costs And Attorneys' Fees. In the event that any action, suit or other
proceeding is instituted concerning or arising out of this Agreement or any
transaction contemplated hereunder, the prevailing party shall recover all of
such party's costs and attorneys' fees incurred in each such action, suit or
other proceeding, including any and all appeals or petitions therefrom.
3.10 Absence of Third Party Beneficiary Rights. No provisions of this
Agreement are intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, partner or employee of any party hereto or any other person
or entity, unless specifically provided otherwise herein, and, except as so
provided, all provisions hereof will be personal solely between the parties to
this Agreement.
3.11 Effectiveness of Agreement. Regardless of when signed, this Agreement
will not become effective or binding unless and until the Effective Time of the
Merger.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date and year first written above.
NETOPIA, INC.
By:
Name: Xxxxx X. Xxxxxx
Title: Vice President, General Counsel and Secretary
STOCKHOLDERS
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Name: Name:
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Name: Name:
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Name: Name:
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Name: Name:
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Name: Name:
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Name: Name:
[Signature Page To Registration Rights Agreement]
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Exhibit A
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SCHEDULE OF STOCKHOLDERS
Name and Address No. of Shares of
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Registrable Stock
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