EXHIBIT 10.1
FORM OF
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of May __, 2004, by and
between NaviSite, Inc., a Delaware corporation (the "Company"), and Surebridge,
Inc., a Delaware corporation ("Surebridge", and together with its permitted
assigns hereunder, the "Investors").
This Agreement is made pursuant to a certain Asset Purchase Agreement dated
as of May 5, 2004 by and among the Company, a subsidiary of the Company and
Surebridge (the "Purchase Agreement"). The execution of this Agreement is a
condition to the closing of the transactions contemplated by the Purchase
Agreement.
NOW, THEREFORE, the parties hereto, in consideration of the foregoing, the
mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, agree as follows:
1. REGISTRATION STATEMENTS.
(a) Initial Registration.
(i) The Company shall, on or before the date which is 45 days after
the Closing Date, prepare and file with the Commission a Registration Statement
on Form S-3 or such other appropriate form (the "Initial Registration
Statement") for sale or distribution of the Initial Registrable Securities by
the Investors on a delayed or continuous basis under Rule 415 of the Securities
Act, and shall use its reasonable best efforts to cause such Initial
Registration Statement to be declared effective no later than the 180th day
after the Closing Date. The Company shall at its own expense, subject to Section
1(a)(iv), furnish to the Investors a Prospectus meeting the requirements of
Section 10(a) of the Securities Act during such period as the Company is
obligated to maintain the effectiveness of a Registration Statement pursuant to
Section 1(a)(ii).
(ii) The Company shall use its reasonable best efforts to cause any
such Initial Registration Statement described in Section 1(a)(i) to remain
effective (or, if required by applicable law, to cause another Registration
Statement with respect to the Initial Registrable Securities to become and
remain effective) until the earlier to occur of: (i) such time as such
securities cease to be Initial Registrable Securities; and (ii) the date which
is two (2) years after the Closing Date.
(iii) The Company shall, at all times during the Initial Registration
Period, subject to Section 1(a)(iv), as promptly as reasonably practicable: (A)
file such amendments to the Initial Registration Statement and the related
Prospectus, file such documents as may be required to be incorporated by
reference in any of such documents, and take all other reasonable actions in
furtherance of the ability of the holders of Initial Registrable Securities to
effect the public resale or distribution of their Initial Registrable Securities
(including without limitation taking reasonable actions necessary to ensure the
availability of a Prospectus meeting the requirements of Section 10(a) of the
Securities Act) continuously through the Initial Registration Period.
(iv) Notwithstanding anything to the contrary in this Agreement, the
Company may suspend the effectiveness of any Registration Statement, the use of
the Prospectus included in any Registration Statement and/or the sales of the
Registrable Securities, if, in its reasonable good faith judgment, (A) the
Company is engaged in a non-public activity or there is a pending material
development the disclosure of which would be materially detrimental to the
Company, (B) maintaining the effectiveness of such Registration Statement at
such time would materially adversely affect a proposed financing, reorganization
or recapitalization of the Company, or pending negotiations relating to a
merger, consolidation, acquisition or similar transaction involving the Company;
or (C) financial statements meeting the requirements of Regulation S-X are not
available at such time; provided, however, that the right of the Company
pursuant to this subsection (iv) to suspend the effectiveness of such
Registration Statement shall not extend for more than 60 total days in any
rolling period of 12 consecutive months during which Registrable Securities are
saleable and not otherwise restricted by the Purchase Agreement, the Notes or
this Agreement; and provided, further, that, if Registrable Securities are
otherwise saleable thereunder and not restricted by the Purchase Agreement, the
Notes or this Agreement, the Company shall give to each holder of Registrable
Securities prior written notice of such suspension at such Holder's most recent
address on file with the Company. Upon receipt of such notice, such holder shall
immediately discontinue any sales of Registrable Securities pursuant to such
Registration Statement.
(b) Note Conversion Registration.
(i) The Company shall, on or before the date which is 20 days after
the Company's receipt of a written request of the Investors holding at least a
majority of the principal amount of the Notes then outstanding on or after the
Conversion Date, prepare and file with the Commission a Registration Statement
on Form S-3 or such other appropriate form (the "Conversion Registration
Statement") for sale or distribution of the Conversion Registrable Securities by
the Investors on a delayed or continuous basis under Rule 415 of the Securities
Act, and shall use its reasonable best efforts to cause such Conversion
Registration Statement to be declared effective at the earliest practicable date
after the Conversion Date. The Company shall at its own expense, subject to
Section 1(b)(iv), furnish to the Investors a Prospectus meeting the requirements
of Section 10(a) of the Securities Act during such period as the Company is
obligated to maintain the effectiveness of a Registration Statement pursuant to
Section 1(b)(ii). Provided that the Company has (i) provided written notice to
each of the Investors of the request by an Investor or certain Investors to have
the Conversion Registration Statement filed and (ii) given such other investors
six (6) business days to notify the Company that they desire to have their
Conversion Registrable Securities registered thereby, and subject to section
1(b)(ii) below, the Company shall not be obligated to prepare, file or get
effective more than one Conversion Registration Statement.
(ii) The Company shall use its reasonable best efforts to cause any
such Registration Statement described in Section 1(b)(i) to remain effective
(or, if required by
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applicable law, to cause another Registration Statement with respect to the
Conversion Registrable Securities to become and remain effective) until the
earlier to occur of: (i) such time as such securities cease to be Conversion
Registrable Securities; and (ii) the date which is three (3) years after the
Effective Date of the Conversion Registration Statement.
(iii) The Company shall, at all times during the Conversion
Registration Period, subject to Section 1(b)(iv), as promptly as reasonably
practicable: (A) file such amendments to the Conversion Registration Statement
and the related Prospectus, file such documents as may be required to be
incorporated by reference in any of such documents, and take all other
reasonable actions in furtherance of the ability of the holders of Conversion
Registrable Securities to effect the public resale or distribution of their
Conversion Registrable Securities (including without limitation taking
reasonable actions necessary to ensure the availability of a Prospectus meeting
the requirements of Section 10(a) of the Securities Act) continuously through
the Conversion Registration Period.
(iv) Notwithstanding anything to the contrary in this Agreement, the
Company may suspend the effectiveness of any Registration Statement, the use of
the Prospectus included in any Registration Statement and/or the sales of the
Registrable Securities, if, in its reasonable good faith judgment, (A) the
Company is engaged in a non-public activity or there is a pending material
development the disclosure of which would be materially detrimental to the
Company, (B) maintaining the effectiveness of such Registration Statement at
such time would materially adversely affect a proposed financing, reorganization
or recapitalization of the Company, or pending negotiations relating to a
merger, consolidation, acquisition or similar transaction involving the Company;
or (C) financial statements meeting the requirements of Regulation S-X are not
available at such time; provided, however, that the right of the Company
pursuant to this subsection (iv) to suspend the effectiveness of such
Registration Statement shall not extend for more than 60 total days in any
rolling 12 month period; and provided, further, that the Company shall give to
each holder of Conversion Registrable Securities prior written notice of such
suspension at such holder's most recent address on file with the Company. Upon
receipt of such notice, such holder shall immediately discontinue any sales of
Registrable Securities pursuant to such Registration Statement.
(c) Amendments. Upon the occurrence of any event that would cause any
Registration Statement (i) to contain a material misstatement or omission or
(ii) not to be effective and usable for resale of Registrable Securities during
the period that such Registration Statement is required to be effective and
usable, the Company shall promptly file an amendment to such Registration
Statement, in the case of clause (i), correcting any such misstatement or
omission, and in the case of either clause (i) or (ii), using its reasonable
best efforts to cause such amendment to be declared effective and such
Registration Statement to become usable as soon as reasonably practicable
thereafter.
(d) Representation and Warranty. The Company represents and warrants to
the Investors that (i) any Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein), at the time it is first
filed with the Commission, at the time it is declared effective by the
Commission and at all times during which it is required to be effective
hereunder (and each such amendment and supplement at the time it is filed with
the Commission and at all times during which it is available for use in
connection with the offer and
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sale of the Registrable Securities) shall not contain any 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 and (ii) any Prospectus,
at the time any Registration Statement is declared effective by the Commission
and at all times, subject to Section 1(a)(iv) and Section 1(b)(iv) hereof, that
such Prospectus is required by this Agreement to be available for use by any
Investor and, in accordance with this Agreement, any Investor is entitled to
sell or distribute Registrable Securities pursuant to such Prospectus, shall not
contain any 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, in
light of the circumstances in which they were made, not misleading.
(e) Incidental Registrations.
(i) Whenever the Company proposes to file a Registration Statement
(other than Registration Statement No. 333-112087 and any successor registration
statement thereto or a Registration Statement filed pursuant to Section 1 (a) or
1 (b) or on Form S-4 or Form S-8 or their then equivalents) at any time when any
Registrable Securities are not subject to the "Lockup" set forth in Section
5.11(b) of the Purchase Agreement, and from time to time, it will, prior to such
filing, give written notice to the Investors of its intention to do so;
provided, that no such notice need be given if no Registrable Securities are to
be included therein as a result of a determination of the managing underwriter
pursuant to Section 1(e)(ii). Upon the written request of an Investor or
Investors given within 10 business days after the Company provides such notice
(which request shall state the intended method of disposition of such
Registrable Securities), the Company shall use its reasonable best efforts to
cause all Registrable Securities which the Company has been requested to
register by such Investor or Investors to be registered under the Securities Act
to the extent necessary to permit their sale or other disposition in accordance
with the intended methods of distribution specified in the request of such
Investor or Investors; provided that the Company shall have the right to
postpone or withdraw any registration effected pursuant to this Section 1 (e)
without obligation to any Investor.
(ii) If the registration for which the Company gives notice pursuant
to this Section 1 (e) is a registered public offering involving an underwriting,
the Company shall so advise the Investors as a part of the written notice given
pursuant to Section 1(e)(i). In such event, the right of any Investor to include
its Registrable Securities in such registration statement pursuant this Section
1(e) shall be conditioned upon such Investor's participation in such
underwriting on the terms set forth herein. All Investors proposing to
distribute their securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for the underwriting by the Company. Notwithstanding any other
provision of this Section 1(e), if the managing underwriter determines that the
inclusion of all shares requested to be registered would adversely affect the
offering, the Company may limit the number of Registrable Securities to be
included in the registration and underwriting. The Company shall so advise all
holders of Registrable Securities requesting registration, and the number of
shares that are entitled to be included in the registration and underwriting
shall be allocated among all Investors requesting registration in proportion, as
nearly as practicable, to the respective number of shares of Common Stock which
they held at the time the Company gives the notice specified in Section 1(e)(i).
If any Investor would thus be entitled to include more securities than such
holder requested to be registered, the excess shall be allocated among other
requesting Investors pro rata in the manner described in the preceding sentence.
If any
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holder of Registrable Securities disapproves of the terms of any such
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, and any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
(iii) Notwithstanding the foregoing, the Company shall not be
required, pursuant to this Section 1(e), to include any Registrable Securities
in a Registration Statement if such Registrable Securities can then be sold by
the holder thereof pursuant to Rule 144(k) under the Securities Act.
(f) Limitations on Subsequent Registration Rights. The Company shall not,
without the prior written consent of Investors holding at least a majority of
the Registrable Securities then held by all Investors, enter into any agreement
(other than this Agreement) with any holder or prospective holder of any
securities of the Company which grant such holder or prospective holder rights
to include securities of the Company in any Registration Statement if such
rights also prohibit the Investors from including Registrable Securities on a
pro rata basis with such holders or prospective holders based on the number of
shares of Common Stock owned by Investors and such holders or prospective
holders.
2. REGISTRATION PROCEDURES.
In connection with any Registration Statement and subject to the provisions
of Section 1, and pursuant thereto the Company shall as expeditiously as
reasonably practicable:
(a) prepare and file with the Commission a Registration Statement relating
to the registration on Form S-3 or such other appropriate form under the
Securities Act, which form shall be available for the sale or distribution of
the Registrable Securities being sold in accordance with the intended method or
methods of distribution thereof and shall include all financial statements
required by the Commission to be filed therewith (including, if required by the
Securities Act or any regulation thereunder, financial statements of any
Subsidiary (as defined in Rule 405 under the Securities Act) of the Company
which shall have guaranteed any indebtedness of the Company), cooperate and
assist in any filings required to be made with the NASD and use its reasonable
best efforts to cause such Registration Statement to become effective and
approved by such governmental agencies or authorities as may be necessary to
enable the selling holders to consummate the disposition of such Registrable
Securities;
(b) prepare and file with the Commission such amendments and
post-effective amendments to such Registration Statement as may be necessary to
keep such Registration Statement effective for the applicable Registration
Period; in the case of any Registration Statement filed pursuant to Rule 415
under the Securities Act, cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Securities Act, to add any permitted assignee or transferee
of any Investor as a "selling stockholder" therein and to comply fully with the
applicable provisions of Rules 424 and 430A under the Securities Act in a timely
manner, and to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such Registration Statement during
the applicable period in accordance with the intended method or
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methods of distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(c) advise the holders of the Registrable Securities promptly (and in any
event within one Business Day, by e-mail, fax or other type of communication)
and, if requested by such Persons, confirm such advice in writing:
(i) when any Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to such Registration
Statement or any post-effective amendment thereto, when the same has become
effective;
(ii) of the existence of any fact and the happening of any event that
makes any statement of a material fact made in such Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document incorporated by
reference therein untrue, or that requires the making of any additions to or
changes in such Registration Statement or the Prospectus in order to make the
statements therein not misleading; and
(iii) of the issuance by the Commission of any stop order or other
order suspending the effectiveness of such Registration Statement, or any order
issued by any state securities commission or other regulatory authority
suspending the qualification or exemption from qualification of such Registrable
Securities under state securities or "blue sky" laws. If at any time the Company
shall receive any such stop order suspending the effectiveness of such
Registration Statement, or any such order from a state securities commission or
other regulatory authority, the Company shall use its reasonable best efforts to
obtain the withdrawal or lifting of such order at the earliest possible time.
(d) deliver to each holder of the Registrable Securities, without charge,
as many copies of any Prospectus and any amendment or supplement thereto as such
Person may reasonably request; the Company consents to the use of such
Prospectus and any amendment or supplement thereto by each of the holders of the
Registrable Securities in connection with the offering and the sale or
distribution of the Registrable Securities covered by such Prospectus or any
amendment or supplement thereto;
(e) prior to any public offering of Registrable Securities, reasonably
cooperate with the holders of the Registrable Securities and their respective
counsel in connection with the registration and qualification of the Registrable
Securities under the securities or "blue sky" laws of such jurisdictions as the
holders of the Registrable Securities may reasonably request in writing and do
any and all other acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by such
Registration Statement; provided, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions;
(f) use its reasonable best efforts to cause the Registrable Securities
covered by such Registration Statement to be registered with or approved by such
other governmental agencies or authorities in the United States as may be
reasonably requested in writing by the seller or distributor thereof to
consummate the disposition of such Registrable Securities;
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(g) if any fact or event contemplated by clause (c)(ii) above shall exist
or have occurred, prepare a supplement or post-effective amendment to such
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Registrable Securities, such Prospectus will not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading;
(h) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission;
(i) use its reasonable best efforts to cause all applicable Registrable
Securities to be listed on each securities exchange or market, if any, on which
equity securities issued by the Company are then listed; and
(j) use its reasonable best efforts to take all other steps reasonably
necessary to effect the registration of the applicable Registrable Securities
contemplated hereby.
It shall be a condition precedent to the obligations of the Company
hereunder with respect to the registration of the Registrable Securities of a
particular Investor that such Investor shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably requested by the Company in connection with its obligations under
this Agreement and shall execute such other documents in connection with such
registration as the Company may reasonably request.
Each Investor by such Investor's acceptance of the Registrable Securities
agrees to cooperate with the Company as reasonably requested by the Company in
connection with the preparation and filing of any Registration Statement
hereunder, unless such Investor has notified the Company of such Investor's
election to exclude all of such Investor's Registrable Securities from such
Registration Statement.
Each holder of the Registrable Securities agrees by acquisition of such
Registrable Securities that, upon receipt of any notice from the Company of the
existence of any fact of the kind described in Section 2(c)(ii), or notice of a
stop order or suspension described in Section 2(c)(iii), such holder shall
forthwith discontinue disposition of Registrable Securities and cease to use the
Prospectus in use under such Registration Statement. The Company shall, as
promptly as practicable, provide each holder with copies of the supplemented or
amended Prospectus contemplated by Section 2(g), or advise the holders in
writing that the use of the Prospectus may be resumed, and promptly provide each
holder with copies of any additional or supplemental filings which are
incorporated by reference in the Prospectus. If so directed by the Company, each
such holder shall deliver to the Company (at the Company's expense) all copies,
other than permanent file copies then in such holder's possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice.
If, pursuant to the terms of this Agreement, the Company gives notice to
each holder of Registrable Securities its intention to remove from registration
the Registrable Securities covered by the Registration Statement that have not
been sold, each holder shall notify
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the Company promptly upon the receipt of such notice of the number of
Registrable Securities that are registered but remain unsold.
3. REGISTRATION EXPENSES. All reasonable expenses incident to the
Company's performance of or compliance with this Agreement shall be borne by the
Company, regardless of whether a Registration Statement becomes effective,
including without limitation:
(a) all registration and filing fees and expenses (including filings made
with the NASD);
(b) fees and expenses of compliance with federal securities and state
"blue sky" or securities laws (other than fees and expenses of compliance with
any state "blue sky" or securities laws to qualify such shares for resale in any
state other than The Commonwealth of Massachusetts and any other jurisdiction
pursuant to Section 2(e) of this Agreement);
(c) expenses of printing (including printing certificates for the
Registrable Securities and Prospectuses), messenger and delivery services and
telephone;
(d) all application and filing fees in connection with listing the
Registrable Securities on a national securities exchange or automated quotation
system pursuant to the requirements hereof; and
(e) all fees and disbursements of counsel of the Company and independent
certified public accountants of the Company (including the expenses of any
special audit and "cold comfort" letters required by or incident to such
performance).
Notwithstanding the foregoing, the Company shall not be liable for any
underwriting commissions, discounts or brokerage fees, and taxes of any kind
(including, without limitation, transfer taxes) applicable to any disposition,
sale or transfer of the Registrable Securities and provided further that the
Company shall not be responsible for any legal, accounting or other
out-of-pocket expenses incurred by the Investors or the holders of the
Registrable Securities in connection with any Registration Statement; and
provided further, the Company shall have no obligation to pay any expenses of
any holder of Registrable Securities in connection with any registration,
qualification or compliance that is withdrawn, delayed or abandoned if such
withdrawal, delay or abandonment is a result of: (i) a request by a holder to
withdraw, delay or abandon such registration, qualification or compliance; (ii)
the failure to comply with the requirements hereof by a holder; or (iii) the
fraud or material misstatement or omission of a material fact by a holder to be
included or required to be included in such registration, qualification or
compliance.
The Company shall, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, rating
agency fees and the fees and expenses of any Person, including special experts,
retained by the Company.
In addition, notwithstanding anything to the contrary contained herein, the
Company shall pay all of the Investors' reasonable costs and expenses (including
reasonable legal fees) incurred in connection with the enforcement of the rights
of the Investors hereunder.
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4. INTENTIONALLY OMITTED.
5. STAND-OFF AGREEMENT. Each Investor, if requested by the Company and
the managing underwriter of an underwritten public offering by the Company of
Common Stock, shall not sell or otherwise transfer or dispose of any Registrable
Securities or other securities of the Company held by such Investor for a period
of 90 days following the effective date of a Registration Statement; provided
that (i) all executive officers and directors of the Company and (ii) all Major
Stockholders enter into similar agreements. The Company may impose stop-transfer
instructions with respect to the Registrable Securities or other securities
subject to the foregoing restriction until the end of such 90-day period.
6. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each holder of the
Registrable Securities and each Person, if any, who controls such holder within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages, liabilities and
expenses (including, without limiting the foregoing but subject to Section 6(c),
the reasonable legal and other expenses incurred in connection with any action,
suit or proceeding or any claim asserted) to which they may become subject under
the Securities Act, the Exchange Act or other federal or state law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement or any Prospectus (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except insofar
as such losses, claims, damages, liabilities or expenses are caused by an untrue
statement or omission contained in information relating to such holder,
furnished to the Company in writing by such holder expressly for use therein;
provided, however, that the indemnity agreement contained in this subsection
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company, which consent shall not be unreasonably withheld, nor shall the Company
be liable in any such case for any such loss, claim, damage, liability or action
to the extent that a copy of the Prospectus or any amendment thereto relating to
the registration was timely provided to the holder by the Company but not
thereafter sent or given by or on behalf of such holder to the Company of the
holder's Registrable Securities, if required by law to have been delivered, at
or prior to the written confirmation of the sale of the Registrable Securities
to the Company, and if the Prospectus as so amended or supplemented would have
cured the defect giving rise to such loss, claim, damage or liability.
(b) As a condition to the inclusion of its Registrable Securities in any
Registration Statement pursuant to this Agreement, each holder thereof shall
furnish to the Company in writing, promptly after receipt of a request therefor,
such information as the Company may reasonably request for use in connection
with any Registration Statement, Prospectus or preliminary prospectus (including
such completed and executed questionnaires as the Company may reasonably
request) and agrees to indemnify and hold harmless, severally and not jointly,
the Company and its directors, its officers who sign such Registration
Statement, and
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any Person controlling the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
indemnity from the Company to each holder and Persons controlling such holder,
but only to the extent of losses, claims, damages, liabilities or expenses
caused by (i) an untrue statement or an omission contained in information
relating to such holder furnished in writing by such holder expressly for use in
such Registration Statement or the Prospectus or any preliminary prospectus
included therein, and of which none of the Company, its directors or officers
has any actual knowledge independent of such holder; provided, however, that
such holder of Registrable Securities shall not be liable in any such case to
the extent that the holder has furnished in writing to the Company prior to the
filing of any such Registration Statement, Prospectus or preliminary prospectus
information expressly for use in such Registration Statement, Prospectus or
preliminary prospectus which corrected or made not misleading information
previously furnished to the Company, and the Company failed to include such
information therein; and (ii) any failure of such holder to suspend or cease
sales of Registrable Securities pursuant to the Registration Statement during a
qualifying suspension period provided in this Agreement. In case any action
shall be brought against the Company, any of its directors, any such officer, or
any such controlling Person based on any Registration Statement, the Prospectus
or any preliminary prospectus and in respect of which indemnity may be sought
against one or more of the holders, such holders shall have the rights and
duties given to the Company by Section 6(c) (except that if the Company as
provided in Section 6(c) shall have assumed the defense thereof such holders
shall not be required to do so, but may employ separate counsel therein and
participate in the defense thereof but the fees and expenses of such counsel
shall be at such holder's expense unless the conditions in clauses (i), (ii) and
(iii) of Section 6(c) shall apply) and the Company and its directors, any such
officers, and any such controlling Person shall have the rights and duties given
to the holders by Section 6(c). In no event shall the aggregate liability of any
selling holder hereunder, together with any contribution, be greater than the
net proceeds (i.e., proceeds net of underwriting discounts, fees, commissions
and any other expenses payable by such selling holder) received by such holder
upon the sale of the Registrable Securities giving rise to such indemnification
obligation.
(c) In case any action or proceeding (including any governmental or
regulatory investigation or proceeding) shall be brought against any current or
former holder of the Registrable Securities or any Person controlling such
holder, with respect to which indemnity may be sought against the Company
pursuant to Section 6(a), such holder or such Person controlling such holder
shall promptly notify the Company in writing and the Company shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such holder and payment of all fees and expenses relating thereto; provided,
that the failure of such holder to give notice as provided herein shall not
relieve the Company of its obligations hereunder except to the extent that the
Company is adversely affected by such failure. Such holder and such Persons
controlling such holder shall have the right to employ separate counsel in any
such action or proceeding and participate in the defense thereof, but the fees
and expenses of such counsel shall be at such holder's expense unless (i) the
employment of such counsel has been specifically authorized in writing by the
Company, (ii) the Company has not assumed the defense and employed counsel
reasonably satisfactory to such holder within 15 days after notice of any such
action or proceeding, or (iii) the named parties to any such action or
proceeding (including any impleaded parties) include both such holder or any
Person controlling such holder and the Company and such holder or any Person
controlling such holder shall have been advised by such counsel that there may
be one or more legal defenses available to such holder or Person
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controlling such holder that are different from or additional to those available
to the Company and, in the reasonable opinion of counsel to such holder or
Person controlling such holder, could not be asserted by the Company's counsel
without creating a conflict of interest (in which case the Company shall not
have the right to assume the defense of such action or proceeding on behalf of
such holder or controlling Person, it being understood, however, that the
Company shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys (in addition to all
local counsel which is necessary, in the good faith opinion of both counsel for
the indemnifying party and counsel for the indemnified party in order to
adequately represent the indemnified parties) for all such holders and
controlling Persons, which firm shall be designated in writing by the holders of
a majority of the Registrable Securities currently or formerly held by such
holders and that all such fees and expenses shall be promptly reimbursed as they
are incurred upon written request and presentation of invoices). The Company
shall not be liable for any settlement of any such action effected without the
written consent of the Company (which consent shall not be unreasonably withheld
or delayed), but if settled with the written consent of the Company or if there
is a final judgment for the plaintiff, the Company agrees to indemnify and hold
harmless such holder and all Persons controlling such holder from and against
any loss or liability by reason of such settlement or judgment. The Company
shall not, without the prior written consent of the holder, effect any
settlement of any pending or threatened proceeding in respect of which any
holder or any Person controlling such holder is a party (or a potential party)
and indemnity has been sought hereunder by such holder or any Person controlling
such holder unless such settlement includes an unconditional release of such
holder or such controlling Person from all liability on claims that are the
subject matter of such proceeding.
(d) If the indemnification provided for in this Section 6 is unavailable
to an indemnified party under paragraphs (a), (b) or (c) hereof in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and expenses in such proportion as
is appropriate to reflect the relative fault of the Company on the one hand and
such holders on the other hand in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of the
Company on the one hand and such holders 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 to state a material fact relates to
information supplied by the Company on the one hand or by such holders on the
other hand and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or expenses shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim.
(e) The Company and the holders of the Registrable Securities agree that
it would not be just and equitable if contribution pursuant to this Section 6
were determined by a pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
subsection (d) above. The amount paid or payable by an
11
indemnified party as a result of the losses, claims, damages, liabilities and
expenses referred to in subsection (d) above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating any claim or
defending any such action, suit or proceeding. Notwithstanding any other
provision of this Agreement, no holder of the Registrable Securities shall be
required to contribute an amount greater than the net proceeds received by such
holder with respect to the sale of Registrable Securities giving rise to any
indemnification or contribution obligation under this Section 6. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
7. RULE 144. The Company agrees with each holder of Registrable
Securities to:
(a) use its best efforts to comply with the requirements of Rule 144(c)
under the Securities Act with respect to current public information about the
Company;
(b) use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Exchange Act
(at any time it is subject to such reporting requirements); and
(c) so long as a holder owns any Registrable Securities, furnish to such
holder forthwith upon request (i) a written statement by the Company as to its
compliance with the requirements of said Rule 144(c) and the reporting
requirements of the Exchange Act (at any time it is subject to such reporting
requirements), (ii) a copy of the most recent annual or quarterly report of the
Company as filed with the Commission, and (iii) such other reports and documents
of the Company as such holder may reasonably request to avail itself of any
similar rule or regulation of the Commission allowing it to sell any such
securities without registration.
8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
(a) Definitions. Unless the context otherwise requires, the terms
hereinafter set forth when used herein shall have the following meanings and the
following definitions shall be equally applicable to both the singular and
plural forms of any of the terms herein defined.
"AFFILIATE" means, as to any Person, a Person which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, the first Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
stock, through an investment advisory or other fiduciary arrangement, by
contract or otherwise, and the term "controlled" shall have a correlative
meaning.
"AGREEMENT" means this Registration Rights Agreement and all Schedules
hereto.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which banks in Boston are required by law to close or are customarily closed.
12
"CLOSING DATE" means the "Closing Date" under the Purchase Agreement.
"COMMISSION" means the Securities and Exchange Commission as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this Agreement such Commission is not existing and performing the
duties now assigned to it under the Exchange Act, then the Person performing
such duties at such time.
"COMMON STOCK" means the common stock, $0.01 par value per share, of the
Company.
"COMPANY" has the meaning assigned in the first paragraph of this
Agreement.
"CONVERSION DATE" means the date, if any, on which the Investors give
written notice of their intent to convert either the Primary Note or the Escrow
Note into shares of Common Stock pursuant to Section 9 of the Notes.
"CONVERSION REGISTRABLE SECURITIES" means (a) all shares of Common Stock
received by the Investors upon the conversion of the Notes pursuant to the terms
thereof, including amounts that may be added to the Notes after its original
issuance pursuant to the provisions of the Purchase Agreement; (b) all shares of
Common Stock into which the Notes may be convertible, at the holder's option,
after a Conversion Date; and (c) any shares of capital stock issued or issuable,
from time to time, upon any reclassification, share combination, share
subdivision, stock split, share dividend, merger, consolidation or similar
transaction or event or otherwise as a distribution on, in exchange for, of or
with respect to the shares of Common Stock described in (a) or (b), in each case
held at the relevant time by an Investor. As to any particular securities, such
securities will cease to be Conversion Registrable Securities when (i) they have
been transferred in a public offering registered under the Securities Act, (ii)
they have been transferred in a sale made through a broker, dealer or
market-maker pursuant to Rule 144 under the Securities Act, (iii) the Investors
(including for this purpose the stockholders of Surebridge) are or would be able
to sell all of such securities under Rule 144 under the Securities Act during
any 90-day period without restriction (including without limitation, as to
volume by the holder thereof), (iv) the Investors (including for this purpose
the stockholders of Surebridge) are or would be able to sell all of such
securities under Rule 144(k) under the Securities Act, or (v) they have been
transferred other than as permitted by the Purchase Agreement, the Notes and
this Agreement.
"CONVERSION REGISTRATION PERIOD" means the period from and after the
Conversion Date until the time determined by Section 1(b)(ii) hereof.
"CONVERSION REGISTRATION STATEMENT" has the meaning assigned in Section
1(b)(i) of the Agreement.
"EFFECTIVE DATE" means the date a Registration Statement is declared
effective by the Commission.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
13
"INITIAL REGISTRABLE SECURITIES" means (a) the "Parent Shares" under the
Purchase Agreement and (b) any shares of capital stock issued or issuable, from
time to time, upon any reclassification, share combination, share subdivision,
stock split, share dividend, merger, consolidation or similar transaction or
event or otherwise as a distribution on, in exchange for, of or with respect to,
the shares of Common Stock described in (a), in each case held at the relevant
time by an Investor. As to any particular securities, such securities will cease
to be Initial Registrable Securities when (i) they have been transferred in a
public offering registered under the Securities Act, (ii) they have been
transferred in a sale made through a broker, dealer or market-maker pursuant to
Rule 144 under the Securities Act, (iii) the Investors (including for this
purpose the stockholders of Surebridge) are or would be able to sell all of such
securities under Rule 144 under the Securities Act during any 90-day period
without restriction (including without limitation, as to volume by the holder
thereof), (iv) the Investors (including for this purpose the stockholders of
Surebridge) are or would be able to sell all of such securities under Rule
144(k) under the Securities Act, or (v) they have been transferred other than as
permitted by the Purchase Agreement, the Notes and this Agreement.
"INITIAL REGISTRATION PERIOD" means the period from and after the Effective
Date until the time determined by Section 1(a)(ii) hereof.
"INITIAL REGISTRATION STATEMENT" has the meaning assigned in Section
1(a)(i) of the Agreement.
"INVESTORS" means, collectively, Surebridge, and any successors or
permitted assignees of any of its rights hereunder that hold Registrable
Securities, including any stockholder of Surebridge that receives Registrable
Securities in a distribution from Surebridge.
"MAJOR STOCKHOLDERS" means (i) any Person that, together with its
Affiliates, owns greater than twenty percent (20%) of the Company's outstanding
Common Stock; (ii) for so long as they beneficially own at least ten percent
(10%) of the outstanding stock of the Company, Atlantic Investors, LLC, or any
successor entity, and (iii) any Affiliate of Atlantic Investors, LLC that has
received stock of the Company directly or indirectly from Atlantic Investors,
LLC.
"NASD" means National Association of Securities Dealers, Inc.
"NOTES" means the "Primary Note" and the "Escrow Note" under the Purchase
Agreement.
"PERSON" means any natural person, corporation, partnership, limited
liability company, trust or unincorporated organization, incorporated
government, government agency or political subdivision thereof.
"PROSPECTUS" means the prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
14
"REGISTRABLE SECURITIES" means the Initial Registrable Securities and the
Conversion Registrable Securities, if any.
"REGISTRATION PERIOD" means the Initial Registration Period or the
Conversion Registration Period, as applicable.
"REGISTRATION STATEMENT" means any registration statement of the Company
relating to the registration under the Securities Act for resale or distribution
of Registrable Securities, including any registration statement filed pursuant
to the provisions of this Agreement, including the Prospectus included therein,
all amendments and supplements thereto (including post-effective amendments) and
all exhibits and material incorporated by reference therein.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
(b) Accounting Principles. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with the
generally accepted accounting principles in effect from time to time, to the
extent applicable, except where such principles are inconsistent with the
express requirements of this Agreement including without limitation the
definitions set out in Section 7.
(c) Directly or Indirectly. Where any provision in this Agreement refers
to action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether the action in question is
taken directly or indirectly by such Person.
9. MISCELLANEOUS.
(a) Remedies. Each holder of the Registrable Securities, in addition to
being entitled to exercise all rights provided herein, and granted by law,
including recovery of damages, shall be entitled to seek specific performance of
its rights under this Agreement. The Company agrees that monetary damages may
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Agreement.
(b) No Inconsistent Agreements. The Company shall not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to such holders of the Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
securities under any other agreements.
(c) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given without the written consent of the Company and the holders of a majority
of Registrable Securities then outstanding.
(d) Notices. Any notices required or permitted to be given under the terms
of this Agreement shall be in writing and shall be sent by mail, personal
delivery, by telephone line
15
facsimile transmission or courier and shall be effective three (3) days after
being placed in the mail, if mailed, or upon receipt, if delivered personally,
by telephone line facsimile transmission or by courier, in each case addressed
to a party at such party's address (or telephone line facsimile transmission
number) shown in the introductory paragraph or on the signature page of this
Agreement or such other address (or telephone and facsimile transmission
numbers) as a party shall have provided by notice to the other parties in
accordance with this provision. Such notices shall be delivered to the following
addresses:
If to the Company:
NaviSite, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxx Xxxxx, Esq.
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxx Rosedale Xxxxxxxxx LLP
00 Xx. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Rosedale, Esq.
Telecopy No.: (000) 000-0000
If to the Investors:
Surebridge, Inc.
c/o Spectrum Equity Investors, L.P.
Xxx Xxxxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Facsimile: 000-000-0000
With a copy to:
Xxxxxxx Procter LLP
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Cable, P.C.
Telecopy No.: (000) 000-0000
(e) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of the Company and the
Investors, including without limitation and without the need for an express
assignment, Affiliates, stockholders, partners and members of the Investors. The
rights and obligations of an Investor under this Agreement shall be
automatically assigned by such Investor to any transferee of all or any portion
of such Investor's Registrable Securities; provided, however, that within a
reasonable time after the transfer, (i) the Company is provided notice of the
transfer including the name and address of the transferee and the number of
Registrable Securities transferred; and (ii) that such permitted transferee
agrees in writing to be bound by the terms of this Agreement and
16
the Company is provided a copy of the transferee's agreement. Upon any transfer
permitted by this Section 9(e), the Company shall be obligated to such
transferee to perform all of its covenants under this Agreement as if such
transferee were an Investor.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Governing Law. THE CORPORATE LAW OF THE STATE OF DELAWARE SHALL GOVERN
ALL ISSUES AND QUESTIONS CONCERNING THE RELATIVE RIGHTS AND OBLIGATIONS OF THE
COMPANY AND ITS STOCKHOLDERS. ALL OTHER ISSUES AND QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT AND THE
EXHIBITS AND SCHEDULES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAW PRINCIPLES THEREOF.
(h) Severability. Should any part of this Agreement for any reason be
declared invalid, such decision shall not affect the validity of any remaining
portion, which remaining portion shall remain in force and effect as if this
Agreement had been executed with the invalid portion thereof eliminated and it
is hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without including therein any
such part, parts, or portion which may, for any reason, be hereafter declared
invalid.
(i) Captions. The descriptive headings of the various Sections or parts of
this Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
(j) Waiver of Jury Trial. EACH OF THE COMPANY AND THE INVESTORS WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
(k) Final Agreement. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement,
or caused this Agreement to be duly executed on its behalf, as of the date first
written.
NAVISITE, INC.
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
SUREBRIDGE, INC.
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
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